<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934
For Quarterly Period Ended September 30, 1995
-----------------------------------------------------
Commission file number 0-12120
---------------------------------------------------------
Bankers First Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-1529166
- ---------------------------------- ---------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
One 10th Street, Augusta, Georgia 30901
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
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 .
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.
CLASS Outstanding at November 13, 1995
- ---------------------------------- --------------------------------
Common Stock, $.01 Par Value 4,755,017 Shares
Bankers First Corporation 1
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BANKERS FIRST CORPORATION AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1995
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
PART I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Financial Condition at
September 30, 1995 and December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Income -
Three and Nine Months ended September 30, 1995 and 1994 . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows -
Nine Months ended September 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . 7-20
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . 20
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
2 Bankers First Corporation
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PART I. FINANCIAL INFORMATION
Item I. Financial Statements
BANKERS FIRST CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition (Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
--------------- ------------
<S> <C> <C>
Assets
Cash and amounts due from depository institutions $ 25,054 26,017
Interest-bearing deposits in other financial institutions 3,766 3,178
Investment securities available for sale, at market 52,312 44,816
Investment securities held to maturity (market value $45,654 in
1995 and $50,988 in 1994) 45,368 52,377
Federal Home Loan Bank stock 9,674 13,845
Loans receivable, net 877,316 878,892
Accrued interest receivable 6,462 6,334
Investment properties, net 14,901 14,846
Real estate owned, net 2,609 3,504
Premises and equipment, net 16,093 15,631
Cost in excess of net assets acquired 4,435 2,794
Other assets 3,054 1,613
----------- ---------
Total assets $ 1,061,044 1,063,847
=========== =========
Liabilities
Deposits $ 769,302 683,881
Retail repurchase agreements 15,612 18,588
Advance payments by borrowers for taxes and insurance 4,185 2,414
Other borrowings 168,855 257,295
Deferred income taxes 451 888
Other liabilities 7,638 16,320
----------- ---------
Total liabilities 966,043 979,386
----------- ---------
Stockholders' equity:
Serial preferred stock, $.01 par value;
authorized 7,500,000 shares; none outstanding - -
Common stock, $.01 par value; authorized 12,500,000 shares;
issued and outstanding 4,751,615 shares in 1995 and
4,500,442 shares in 1994 $ 48 45
Additional paid-in capital 56,891 55,222
Retained earnings (substantially restricted) 39,292 31,661
Loans to Employee Stock Ownership Plan and others (1,942) (2,286)
Net unrealized holding gains/(losses) on investment securities
available for sale 712 (181)
----------- ---------
Total stockholders' equity 95,001 84,461
----------- ---------
Total liabilities and stockholders' equity $ 1,061,044 1,063,847
=========== =========
Book value per share $ 19.99 18.77
=========== =========
</TABLE>
See accompanying notes to consolidated financial statements.
Bankers First Corporation 3
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<TABLE>
<CAPTION>
BANKERS FIRST CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
(In thousands, except per share amounts) Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
1995 1994 1995 1994
--------- ------ ------- --------
<S> <C> <C> <C> <C>
Interest income:
Interest on loans $ 18,844 16,424 56,649 45,147
Interest on investment securities 1,890 1,908 5,622 6,146
Dividends on Federal Home Loan Bank stock 190 196 667 483
Other 100 75 319 219
-------- ------ ------ ------
Total interest income 21,024 18,603 63,257 51,995
Interest expense:
Interest on deposits 9,127 6,556 24,838 18,898
Interest on retail repurchase agreements 108 116 328 307
Interest on other borrowings 2,772 2,907 10,507 7,830
-------- ------ ------ ------
Total interest expense 12,007 9,579 35,673 27,035
-------- ------ ------ ------
Net interest income 9,017 9,024 27,584 24,960
Provision for loan losses 300 200 925 700
-------- ------ ------ ------
Net interest income after provision for loan losses 8,717 8,824 26,659 24,260
Other income:
Loan servicing fees 59 59 172 174
Loan fees and service charges 247 243 755 750
Service charges on deposit accounts 1,394 1,228 4,085 3,533
Gain on sale of loans 288 84 556 28
Gain on sale of investment securities - - 12 1,862
Real estate operations 361 (32) 809 (295)
Other 16 4 82 87
-------- ------ ------ ------
Total other income 2,365 1,586 6,471 6,139
Operating expense:
Salaries and employee benefits 2,798 2,645 8,552 7,593
Net occupancy expense 1,138 1,149 3,441 3,223
Advertising and promotion 140 209 560 620
FDIC insurance premiums 388 439 1,332 1,346
Amortization of costs in excess of net assets acquired 290 180 818 476
Other 1,341 1,436 3,977 3,884
-------- ------ ------ ------
Total operating expense 6,095 6,058 18,680 17,142
-------- ------ ------ ------
Net noninterest expense 3,730 4,472 12,209 11,003
-------- ------ ------ ------
Income before income tax and extraordinary item 4,987 4,352 14,450 13,257
Income tax expense 1,626 1,530 4,697 4,549
-------- ------ ------ ------
Income before extraordinary item 3,361 2,822 9,753 8,708
Extraordinary item, net - - - (908)
-------- ------ ------ ------
Net income $ 3,361 2,822 9,753 7,800
======== ====== ====== ======
Primary earnings per share:
Income before extraordinary item $ 0.66 0.57 1.93 1.76
Extraordinary item, net - - - (0.18)
-------- ------ ------ ------
Net income $ 0.66 0.57 1.93 1.58
======== ====== ====== ======
Weighted average common and common equivalent shares 5,089 4,951 5,062 4,939
======== ====== ====== ======
Fully diluted earnings per share:
Income before extraordinary item $ 0.66 0.57 1.93 1.76
Extraordinary item, net - - - (0.18)
-------- ------ ------ ------
Net income $ 0.66 0.57 1.93 1.58
======== ====== ====== ======
Weighted average common and common equivalent shares 5,095 4,951 5,083 4,946
======== ====== ====== ======
</TABLE>
See accompanying notes to consolidated financial statements.
4 Bankers First Corporation
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<TABLE>
<CAPTION>
BANKERS FIRST CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended
(Dollars in thousands) September 30
-------------------
1995 1994
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 9,753 7,800
Adjustments to reconcile net income to net cash provided (used) by operations:
Provision for loan and real estate losses 1,075 1,300
Depreciation and amortization 1,456 1,717
Amortization of cost in excess of net assets acquired 818 476
Amortization and accretion, net 16 389
(Gain) loss on sale of loans (556) (28)
(Gain) on sale of investment securities (12) (1,862)
(Gain) on sale of real estate, premises, and equipment (1,423) (1,242)
FHLB stock purchases, net of redemptions and stock dividends 4,171 (1,946)
Net change in other assets and accrued interest receivable (1,075) 346
Net change in other liabilities, accrued interest on deposits,
and deferred income taxes (6,245) 5,663
-------- --------
Net cash provided (used) by operating activities 7,978 12,613
Cash flows from investing activities:
Purchase of investment securities available for sale (16,669) (2,000)
Proceeds from sale and redemption of investment securities available for sale 4,260 5,322
Proceeds from maturity and principal collections of investment securities
available for sale 6,293 14,828
Proceeds from maturity and principal collections of investment securities
held to maturity 6,998 12,651
Loan originations net of principal collections (58,018) (164,050)
Purchases of loans (43,200) (41,426)
Proceeds from sale of loans 101,478 41,876
Net additions to premises and equipment (729) (216)
Improvements and additions to real estate owned and investment property (1,901) (1,161)
Proceeds from sale of real estate and investment property 4,938 8,518
-------- --------
Net cash provided (used) by investment activities 3,450 (125,658)
Cash flows from financing activities:
Net change in deposit accounts 26,209 (1,730)
Net change in retail repurchase agreements (2,976) 1,405
Repayments of long-term borrowings (540) (18,531)
Net change in short-term borrowings (87,900) 77,000
Net change in advance payments by borrowers for taxes and insurance 1,771 2,613
Dividends paid (2,122) (1,347)
Proceeds from exercise of stock options and dividend reinvestment 1,521 411
Cash received on purchase of branches 52,234 51,024
-------- --------
Net cash provided (used) by financing activities (11,803) 110,845
-------- --------
Increase (decrease) in cash and cash equivalents (375) (2,200)
Cash and cash equivalents at beginning of year 29,195 26,814
-------- --------
Cash and cash equivalents at end of period $ 28,820 24,614
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 32,004 24,356
Income Taxes 4,611 3,090
Noncash transactions-other:
Transfer of loans to and write downs of repossessed assets 1,404 3,326
Financing provided on sales of real estate 395 2,796
</TABLE>
See accompanying notes to consolidated financial statements.
Bankers First Corporation 5
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
The accompanying Consolidated Statement of Financial Condition
as of September 30, 1995, and the related Consolidated Statements of Income for
the three and nine month periods ended September 30, 1995 and 1994, and the
Consolidated Statements of Cash Flows for the nine month periods ended
September 30, 1995 and 1994 are unaudited. In the opinion of Management, all
eliminations and adjustments necessary for a fair presentation have been made;
however, the statements were prepared in accordance with the instructions for
preparation of Securities and Exchange Commission Form 10-Q and do not include
all information and disclosures necessary for fair presentation in accordance
with generally accepted accounting principles. These financial statements
should, therefore, be read in conjunction with management's discussion and
analysis of the complete Annual Report for the year ended December 31, 1994
which was filed with the Company's most recent Form 10-K.
Investment properties represent real estate held for
development and sale or operating properties held for long-term investment.
Real estate held for development and sale is stated at the lower of cost or net
realizable value. Acquisition and development costs, including interest, are
capitalized when real estate is in the process of development. Other
investment properties are stated at cost less accumulated depreciation.
Operating results for the three and nine month periods ended
September 30, 1995 are not necessarily indicative of the results that may be
expected for the year. Adjustments to the balance sheet and income statement
are typically of a normal, recurring nature. Any adjustments not meeting this
criteria are disclosed in Management's Discussion and Analysis of Financial
Condition and Results of Operations or Notes to the Consolidated Financial
Statements.
Certain amounts in the prior year Financial Statements have
been reclassified to conform with current year presentation.
2. Recent Accounting Pronouncements
In May 1993, the Financial Accounting Standards Board issued
Statement of Accounting Standards ("SFAS") No. 114, "Accounting by Creditors
for Impairment of a Loan." SFAS 114 requires impaired loans to be measured
based on the present value of expected future cash flows, discounted at the
loan's effective interest rate, or at the loan's observable market price, or at
the fair value of the collateral if the loan is collateral dependent, beginning
in 1995. Loans that are determined to be impaired require a valuation
allowance equivalent to the amount of impairment. The valuation allowance is
to be established by a charge to the provision for loan losses. In October
1994, the Financial Accounting Standards Board issued Statement No. 118,
"Accounting by Creditors for Impairment of a Loan-Income Recognition and
Disclosures," which amends the requirements of SFAS 114 regarding interest
income recognition and related
6 Bankers First Corporation
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disclosure requirements. The Company adopted SFAS 114 and SFAS 118 on January
1, 1995, and the impact to the consolidated financial statements was not
material.
3. Other Developments
On October 31, 1995 the Company announced the signing of a definitive
merger agreement with SouthTrust Corporation. Bankers First will be acquired
by SouthTrust Corporation my means of the merger of the Company with SouthTrust
of Georgia, Inc. Under the terms of the definitive agreement, all outstanding
shares and options of Bankers First common stock will be acquired by SouthTrust
Corporation in exchange for SouthTrust common stock and options at an exchange
ratio of 1.126, subject to possible adjustment. The transaction would be
valued at approximately $148 million, or $28.29 per Bankers First Corporation
share based on the closing price of SouthTrust Corporation common stock on
October 31, 1995. The value of the transaction is approximately 157% of
Bankers First tangible equity or 150% of equity as of September 30, 1995
assuming all outstanding options are exercised.
In conjunction with the proposed merger, Bankers First Corporation
anticipates recording certain charges relating to fees and expenses of outside
advisors; severance and termination payments; and certain other costs to
conform to SouthTrust's policies and practices. While the specific amounts are
still being estimated, Management anticipates such amounts to aggregate $8 to
$10 million before income tax benefit, and anticipates recording the charges in
the fourth quarter of 1995.
Additionally, in connection with the merger, Bankers First Savings
Bank, FSB will be converted from a thrift to a national or state bank charter.
Such conversion will require the recapture of approximately $13 million of
previous bad debt deductions for which no deferred taxes have been provided,
resulting in a charge to income tax expense of approximately $4.5 million.
Such charge will be recorded at the time conversion becomes imminent.
The definitive agreement is subject to certain conditions including
approval of Bankers First shareholders and regulatory approvals. Bankers First
Corporation filed Form 8-K on November 2, 1995 which further describes this
transaction and is hereby incorporated by reference.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE QUARTERS ENDED SEPTEMBER 30, 1995 AND 1994
Net interest income was unchanged compared to the 1994 quarter.
Average earning assets increased $57.0 million while average interest bearing
liabilities increase $49.2 million. For the 1994 and 1995 quarters
respectively, the yield on average earning assets increased from
Bankers First Corporation 7
<PAGE> 8
7.90% to 8.42%; however, the increase in yield was offset by an increase in the
average rate paid on interest-bearing liabilities from 4.16% to 4.94%. As a
result of the above changes in earning assets and interest bearing liabilities,
the interest spread decreased 26 basis points while the net interest margin
decreased to 3.65% in the 1995 quarter from 3.86% in 1994.
The provision for loan losses was $300 thousand compared to $200
thousand in the 1994 quarter. Net loan charge offs were $271 thousand versus
$281 thousand in 1994. At September 30, 1995 the allowance for loan losses was
$8.0 million or 0.91% of net loans and 0.75% of total assets. Loan loss
reserves to non-performing loans was 164.2%. The coverage ratio, loan loss
reserves to non-performing loans and real estate owned, was 106.7%.
Other income for the quarter was $2.4 million compared to $1.6 million
in the year earlier period. Service charges on deposit accounts were $166
thousand higher due to a $21.6 million increase in average checking account
balances. Gain on sale of loans was up $204 thousand over the 1994 quarter.
Real estate operations income increased $393 thousand over the prior year
quarter due to higher residential real estate sales and a $100 thousand
decrease in the provision for real estate losses. The provision for real
estate losses was $50 thousand and $150 thousand in 1995 and 1994,
respectively.
Operating expenses were $6.1 million compared to $6.1 million for the
1994 quarter. The overhead ratio, operating expense less goodwill amortization
divided by average assets, improved to 2.17% in 1995 from 2.33% in 1994. The
efficiency ratio, recurring operating expense net of goodwill amortization
divided by net interest income and other recurring income, was 50.60% in 1995
compared to 52.53% in 1994.
Income tax expense for the 1995 quarter was $1.6 million or 32.6% of
income before tax compared to $1.5 million or 35.2% for the same 1994 period.
The corporate income tax rate for 1995 and 1994 differs from the Company's
actual effective tax rate principally due to the reduction of the tax valuation
allowance for deferred state income tax benefits.
RESULTS OF OPERATIONS FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND
1994
Net interest income increased $2.6 million compared to the 1994 period
principally due to a $121.5 million increase in average earning assets and a
$111.9 million increase in average interest bearing liabilities. For the 1994
and 1995 periods respectively, the yield on average earning assets increased
from 7.75% to 8.30%; however, the increase in yield was offset by an increase
in the average rate paid on interest-bearing liabilities from 4.14% to 4.84%.
As a result of the above changes in earning assets and interest bearing
liabilities, the interest spread decrease 15 basis points while the net
interest margin decreased to 3.61% in 1995 from 3.71% in 1994.
8 Bankers First Corporation
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The provision for loan losses was $925 thousand compared to $700
thousand in 1994. Net loan charge offs were $683 thousand for 1995 and $692
thousand for 1994. At September 30, 1995 the allowance for loan losses was
$8.0 million or 0.91% of net loans and 0.75% of total assets. Loan loss
reserves to non-performing loans was 164.2%. The coverage ratio, loan loss
reserves to non-performing loans and real estate owned, was 106.7%.
Other income was $6.5 million compared to $6.1 million in the year
earlier period. Service charges on deposit accounts were $552 thousand higher
due to a $22.8 million increase in average checking account balances. Real
estate operations income increased $1.1 million from 1994 levels due to $201
thousand of nonrecurring gains in the 1995 period, $169 thousand of
nonrecurring losses in the 1994 period, and a $450 thousand decrease in the
provision for real estate losses. The provision for real estate losses was
$150 thousand and $600 thousand in 1995 and 1994, respectively. Gain on sale
of loans was up $528 thousand compared to 1994 levels. Other income in 1994
included a $1.9 million nonrecurring gain on the sale of 317 thousand shares of
Synovus Financial Corp. common stock. This gain was partially offset by a $0.5
million nonrecurring charge for the write down of the present value of excess
loan servicing rights in 1994. The remaining balance at September 30, 1995 of
excess loan servicing rights is $0.7 million.
SCHEDULE I
BANKERS FIRST CORPORATION AND SUBSIDIARIES
Profitability & Overhead Ratios
<TABLE>
<CAPTION>
1995 1994
--------------------- -------------------
09/30 06/30 03/31 12/31 09/30 06/30
------ ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Profitability
Yield on Earning Assets 8.42% 8.29 8.20 8.02 7.90 7.67
Cost of Funds 4.94 4.89 4.70 4.40 4.16 4.07
Interest Spread 3.48 3.40 3.50 3.62 3.74 3.60
Net Interest Margin 3.65 3.55 3.64 3.74 3.86 3.70
Net Non-Interest 1.39 1.54 1.55 1.34 1.77 1.63
Return on Assets 1.26 1.13 1.20 1.15 1.12 1.09
Return on Equity 14.37 13.84 15.05 14.52 13.92 13.23
Overhead
G&A/Average Assets 2.17% 2.18 2.22 2.20 2.33 2.30
Amortization of Goodwill/Average Assets 0.11 0.11 0.09 0.08 0.07 0.06
Compensation/Average Assets 1.05 1.04 1.06 1.06 1.05 1.05
Occupancy/Average Assets 0.43 0.42 0.42 0.46 0.46 0.45
Number of Employees (FTE's) 385 386 380 372 372 350
Dollars of Assets per Employee
(in millions) $ 2.78 2.88 2.85 2.83 2.77 2.74
Gap
One Year Gap 2.21% 3.92 1.49 3.25 6.84 6.66
</TABLE>
Bankers First Corporation 9
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Operating expenses were $18.7 million compared to $17.1 million for
the 1994 period. The overhead ratio, operating expense less goodwill
amortization to average assets, improved to 2.19% in 1995 from 2.31% in 1994.
The efficiency ratio, recurring operating expense net of goodwill amortization
divided by net interest income and other recurring income, was 52.52% in 1995
compared to 53.30% in 1994.
Income tax expense for the 1995 period was $4.7 million or 32.5% of
income before tax compared to $4.5 million or 34.3% for the same 1994 period.
The corporate income tax rate for 1995 and 1994 differs from the Company's
actual effective tax rate principally due to the reduction of the tax valuation
allowance for deferred state income tax benefits.
In 1994, $28.0 million of FHLB advances were prepaid and an
extraordinary charge of $908 thousand net of income tax benefit was recognized.
ASSET/LIABILITY MANAGEMENT
SUMMARY
The Company utilizes Sendero Asset/Liability modeling software to
measure and monitor its exposure to interest rate risk. Using this software,
the duration and repricing periods of earning assets and interest bearing
liabilities are projected and measured under various interest rate scenarios on
a quarterly basis. Based on this analysis, strategies are developed to achieve
returns that are within the guidelines of the Company's interest rate risk
policy. This model provides two primary measures of interest rate risk: rate
shock analysis and the Asset/Liability Gap ratio.
INTEREST RATE SENSITIVITY
Rate shock analysis provides a dynamic measurement of interest rate
sensitivity. The rate shock model assumes an immediate and sustained change in
the level of interest rates. Rate changes are computed in 100 basis point
increments ranging from a minus 400 basis point decline to a positive 400 basis
point increase in interest rate levels. It is unlikely that an immediate and
sustained change in interest rate of this magnitude would occur. Historically,
interest rates generally increase or decrease over a period of time in what is
categorized as a rate cycle. The hypothetical modeling of an instantaneous
rate shock provides insight as to the potential impact on the Company's equity
capital and its profitability under these circumstances.
For example, the results of the rate shock analysis at September 30,
1995 indicate that an immediate and sustained change caused by a 100 basis
point increase in interest rates would produce a decrease in the projected
annual net interest margin of 19 basis points. A 100 basis point decrease in
interest rates would result in a 16 basis point increase in the projected net
interest margin for the same period. As measured by the interest rate shock
analysis, the Company has developed strategies to achieve targeted returns
under various interest rate
10 Bankers First Corporation
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scenarios. However, since all interest rates do not adjust concurrently, this
analysis is only an indicator of the sensitivity to changes in interest rates.
ASSET/LIABILITY GAP RATIO
Another measure of interest rate risk is the Asset/Liability Gap
ratio. Over the past two years the one year Gap ratio has ranged between 6.84%
and 1.49%. At September 30, 1995 the one year Gap ratio was 2.21% with 63.9%
of total rate sensitive assets and 64.6% of total rate sensitive liabilities
scheduled to reprice within twelve months compared to 58.6% and 53.5%,
respectively, a year earlier. Schedule I summarizes the one year Gap ratio for
the most recent six quarters. Schedule II shows the current Gap position by
type of rate sensitive assets and liabilities and by major repricing period.
SCHEDULE II
BANKERS FIRST CORPORATION AND SUBSIDIARIES
Gap Analysis at September 30, 1995
<TABLE>
<CAPTION>
(Dollars in thousands) ---------------------------------------------------------------
Six Six Months One to Three to Over
Months to One Three Five Five
or Less Year Years Years Years Total
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Rate Sensitive Assets
Loans $ 386,681 187,461 172,823 57,816 80,988 885,769
Investment securities 26,507 22,498 27,307 10,991 10,377 97,680
FHLB Stock 9,674 - - - - 9,674
Deposit funds 3,766 - - - - 3,766
--------- ------- ------- ------ ------ -------
Total 426,628 209,959 200,130 68,807 91,365 996,889
Rate Sensitive Liabilities
Deposits 298,327 185,345 136,287 50,881 94,400 765,240
Borrowings 119,416 10,000 50,000 5,000 51 184,467
--------- ------- ------- ------ ------ -------
Total 417,743 195,345 186,287 55,881 94,451 949,707
Gap Position
Asset (liability) Gap Position $ 8,885 14,614 13,843 12,926 (3,086) 47,182
========= ======= ======= ====== ====== =======
Cumulative Asset (liability) Gap $ 8,885 23,499 37,342 50,268 47,182 47,182
========= ======= ======= ====== ====== =======
Gap Position as a percentage
of total assets 0.84% 2.21 3.52 4.74 4.45 4.45
========= ======= ======= ====== ====== =======
Gap Position At December 31, 1994:
Asset (liability) Gap Position $ 38,204 (3,621) 1,294 2,410 3,653 41,940
========= ======= ======= ====== ====== =======
Cumulative Asset (liability) Gap $ 38,204 34,583 35,877 38,287 41,940 41,940
========= ======= ======= ====== ====== =======
Gap Position as a percentage
of total assets 3.59% 3.25 3.37 3.60 3.94 3.94
========= ======= ======= ====== ====== =======
</TABLE>
The difference between the amount of interest sensitive assets and
interest sensitive liabilities to be repriced during a specified time period is
referred to as the "asset(liability) gap position". The classification and
availability of interest sensitive assets and liabilities available for
repricing is determined as follows: (1) loans tied to the base lending rate or
other indices depend on the time the adjustments may occur; (2) loans with
stated call dates are amortized without any prepayment assumption with the
balance at the call date reflected in that period; (3)
Bankers First Corporation 11
<PAGE> 12
other loans are amortized using market based prepayment assumptions; (4)
investments are categorized by stated maturity; (5) regular savings and regular
NOW accounts are considered to be interest sensitive and are amortized using
projected deposit repricing rates; (6) money market deposit accounts, Super NOW
accounts, and repurchase agreements are subject to rate change daily; and (7)
other deposits and borrowings are shown by stated maturity. Management
believes that the above prepayment and withdrawal assumptions are reasonable
based upon the Company's historical experience.
The Company manages its Asset/Liability position by selling all 30
year fixed rate loan production, originating and generally retaining adjustable
rate mortgages and shorter-term loans, and by using funding sources, such as
core deposits, longer term certificates of deposit and long-term borrowings,
that provide durations similar to the assets held in portfolio.
At September 30, 1995, the Company did not have any futures, swaps or
option contracts. The Company has commitments to originate, purchase and sell
loans. These commitments are in the normal course of business and in the
opinion of management do not involve more than the normal risk of loss.
<TABLE>
<CAPTION>
SCHEDULE III
BANKERS FIRST CORPORATION AND SUBSIDIARIES
Loan Activities
(Dollars in thousands) 1995 1994
-------------------------------- -------------------------------
9/30 6/30 3/31 12/31 9/30 6/30
--------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Gross Loans Outstanding
Beginning of Period $ 932,203 919,490 887,991 854,133 792,895 734,233
Originated
Residential Construction 10,368 9,580 11,200 11,744 11,854 13,461
Other Residential 35,978 34,656 28,274 31,401 39,163 48,039
Commercial Real Estate 1,220 3,612 7,494 6,267 9,153 10,117
Other 36,166 33,085 32,506 33,709 38,090 43,528
--------- ------- ------- ------- ------- -------
Total Originated 83,732 80,933 79,474 83,121 98,260 115,145
Purchased
Residential Construction 7,199 6,022 9,532 7,931 8,354 4,340
Other Residential 3,892 5,091 11,553 17,795 25,457 14,390
--------- ------- ------- ------- ------- -------
Total Purchased 11,091 11,113 21,085 25,726 33,811 18,730
Sold
Residential Construction - - - - - -
Other Residential 67,534 22,701 10,687 15,174 10,080 12,052
Commercial Real Estate - - - 8,601 - -
--------- ------- ------- ------- ------- -------
Total Sold 67,534 22,701 10,687 23,775 10,080 12,052
Net Payments and Swaps (73,030) (56,632) (58,373) (51,214) (60,753) (63,161)
--------- ------- ------- ------- ------- -------
Gross Loans Outstanding
End of Period $ 886,462 932,203 919,490 887,991 854,133 792,895
========= ======= ======= ======= ======= =======
</TABLE>
12 Bankers First Corporation
<PAGE> 13
LOAN PORTFOLIO
At September 30, 1995 net loans receivable stood at $877.3 million
compared to $923.0 million at June 30, 1995. Loans held for sale decreased
$41.4 million during the quarter due to the sale of $40.1 million of the
Company's originated portfolio of fixed rate convertible loans on July 18,
1995. Residential real estate loans increased $2.8 million for the quarter on
origination of $36.0 million, purchases of $3.9 million, and sales of $27.4
million. Both commercial real estate and commercial construction loans
decreased by $5.5 million and $2.6 million, respectively. The residential
construction portfolio reflected a similar decline of $7.7 million despite
originations of $10.4 million and purchases of $7.2 million. The consumer loan
portfolio increased $7.8 million over the prior quarter and $21.4 million over
1994 year-end levels as consumer loan demand remained strong. Schedule III
provides a summary of loan origination, sales, and payments for the last six
quarters. Schedule V provides detail of the loan portfolio mix at September
30, 1995 and December 31, 1994.
SCHEDULE IV
BANKERS FIRST CORPORATION AND SUBSIDIARIES
Allowance for Loan Losses
(Dollars in thousands)
<TABLE>
<CAPTION>
1995 1994
---------------------------- --------------------------
9/30 6/30 3/31 12/31 9/30 6/30
------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Allowance for Losses Beginning of Period $ 7,923 7,848 7,710 8,782 8,863 8,527
Provision for Loan Losses 300 325 300 1,100 200 250
Recoveries
Real Estate Loans:
Residential 26 2 2 2 23 9
Commercial 2 8 - 3 16 321
Commercial & Industrial 35 11 13 12 - -
Consumer 88 80 89 91 89 108
------- ----- ----- ----- ----- -----
Total Recoveries 151 101 104 108 128 438
Losses Charged to
Real Estate Loans:
Residential 72 38 27 370 68 30
Commercial - 2 26 1,711 156 123
Commercial & Industrial 53 68 23 25 18 62
Consumer 297 243 190 174 167 137
------- ----- ----- ----- ----- -----
Total Charge-Offs 422 351 266 2,280 409 352
------- ----- ----- ----- ----- -----
Net Charge-Offs 271 250 162 2,172 281 (86)
------- ----- ----- ----- ----- -----
Allowance for Losses End of Period $ 7,952 7,923 7,848 7,710 8,782 8,863
======= ===== ===== ===== ===== =====
Allowance for losses as a percentage of
non-performing assets 106.70% 101.03 101.95 121.11 118.97 101.92
ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
Real Estate Loans:
Residential $ 1,429 1,475 1,415 1,442 2,815 2,861
Commercial 2,593 2,803 2,796 2,610 3,150 3,290
Commercial & Industrial 1,605 1,622 1,641 1,650 756 774
Consumer 2,325 2,023 1,996 2,008 2,061 1,938
------- ----- ----- ----- ----- -----
Allowance for Losses End of Period $ 7,952 7,923 7,848 7,710 8,782 8,863
======= ===== ===== ===== ===== =====
</TABLE>
Bankers First Corporation 13
<PAGE> 14
SCHEDULE V
BANKERS FIRST CORPORATION
Loan Portfolio
(Dollars in thousands)
<TABLE>
<CAPTION>
9/30/95 12/31/94
-------------------- ---------------------
Amount Percent Amount Percent
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
Loans
Loans held for sale $ 6,106 0.70% $ 1,353 0.15%
Construction - Residential (Net) 50,279 5.73 46,830 5.33
Construction - Commercial (Net) 10,420 1.19 11,201 1.27
Residential real estate 448,371 51.11 465,560 52.97
Commercial real estate 157,602 17.96 170,504 19.40
Commercial and corporate 18,449 2.10 18,754 2.13
Consumer 195,235 22.25 173,789 19.77
--------- ------ --------- ------
Gross loans 886,462 101.04 887,991 101.04
Less:
Unearned interest income and deferred loan fees 1,194 0.14 1,389 0.16
Allowance for losses 7,952 0.90 7,710 0.88
--------- ------ --------- ------
Net Loans $ 877,316 100.00% $ 878,892 100.00%
========= ====== ========= ======
</TABLE>
ASSET QUALITY
Non-performing assets at September 30, 1995 were $7.5 million, a
decrease of $0.1 million or 1.7% from 1994 levels. As a percent of total
assets, non-performing assets were 0.70% in both 1995 and 1994.
Non-performing assets consist of nonaccrual loans and real estate
acquired by foreclosure or by deed in lieu of foreclosure. Nonaccrual loans
represent loans that are 90 days delinquent (120 days for credit card loans) on
which interest is not accrued. Real estate acquired by foreclosure or through
in substance foreclosure is stated at the lower of cost or fair value less
estimated disposal costs at foreclosure. A valuation allowance is established
for subsequent reductions to the carrying value of repossessed real estate.
Restructured loans at September 30, 1995 were $2.2 million down $6.2
million or 73.6% from a year earlier. Restructured loans as a percent of total
assets were 0.21%. Restructured loans consist of loans that are made with
terms that are concessions from the Company's normal lending policies.
Loans on nonaccrual status totaled $4.5 million at September 30, 1995.
Had these loans performed in accordance with their original terms, the Company
would have recorded gross interest income of $109 thousand and $328 thousand
for the three months and for the nine months ended September 30, 1995,
respectively. Interest income, included in net income, on these loans totaled
$72 thousand and $232 thousand for the three months and for the nine months
ended September 30, 1995, respectively.
Schedule VI provides additional information on changes in
non-performing assets, restructured loans and performing loans 90 days past due
for the last six quarters.
14 Bankers First Corporation
<PAGE> 15
SCHEDULE VI
BANKERS FIRST CORPORATION AND SUBSIDIARIES
Non-Performing Assets, Restructured Loans and 90 Day Past Due Loans
(Dollars in thousands)
<TABLE>
<CAPTION>
1995 1994
---------------------------- ----------------------------
9/30 6/30 3/31 12/31 9/30 6/30
-------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Non-Performing Assets
Nonaccrual Loans $ 4,844 4,967 3,688 2,862 2,581 3,143
Assets Acquired by Foreclosure 2,609 2,875 4,010 3,504 4,751 5,553
-------- ------ ------ ------ ------ ------
Total Non-Performing Assets 7,453 7,842 7,698 6,366 7,332 8,696
Restructured Loans 2,213 2,347 2,397 2,424 8,384 10,083
Performing Loans - 90 Days Past Due 1,728 1,984 1,749 2,188 1,607 1,166
-------- ------ ------ ------ ------ ------
Total NPA, Restructured & 90 Day Past Due $ 11,394 12,173 11,844 10,978 17,323 19,945
======== ====== ====== ====== ====== ======
As A Percentage of Total Assets
Non-Performing Assets 0.70% 0.70 0.70 0.60 0.70 0.89
Restructured Loans 0.21 0.21 0.21 0.23 0.81 1.02
Performing Loans - 90 Days Past Due 0.16 0.18 0.16 0.21 0.15 0.12
-------- ------ ------ ------ ------ ------
Total 1.07% 1.09 1.07 1.04 1.66 2.03
======== ====== ====== ====== ====== ======
</TABLE>
Loans that are 90 days delinquent as to principal or interest are
reviewed for nonaccrual status. Nonaccrual status refers to loans no longer
accruing interest. If collection of interest is less than probable or the
collection of principal is doubtful, accrual of interest income is discontinued
and previously accrued interest is reversed. Interest income on nonaccrual
loans is recognized on a cash basis. Loans that are not well secured and in
the process of collection are placed on nonaccrual.
Well secured refers to debt collateralized in the form of liens on or
pledges of real or personal property, including securities, that is secured to
the net realizable value of the recorded investment. Debt is also considered
to be well secured if guaranteed by a financially responsible party with the
capacity to repay the debt.
In process of collection refers to actions to collect the debt in due
course either through legal action, including judgment enforcement procedures
or, in appropriate circumstances, through collection efforts not involving
legal action which are reasonably expected to result in repayment of the debt
or in its restoration to a current status. A loan is considered to be in
process of collection when, based upon a probable specific event such as the
closing of a negotiated sales contract, it is expected that the loan will be
repaid or brought current. There must be evidence that collection in full of
amounts due and unpaid will occur shortly. The timing and amount of repayment
should be certain and should occur within 90 days from the date of review by
the Credit Policy Committee.
As illustrated in Schedule VII, of total non-performing assets, 70.2%
are located in major metropolitan areas of Georgia, South Carolina and
Tennessee. The diversified economic base of these areas and their proximity to
the Company's banking operations are expected to be strong factors in reducing
the level of non-performing assets. However, further declines in commercial
real estate and real estate construction markets or in other economic sectors
could potentially result in increased levels of charge-offs, non-performing
assets and provision for loan losses.
Bankers First Corporation 15
<PAGE> 16
SCHEDULE VII
BANKERS FIRST CORPORATION AND SUBSIDIARIES
Non-Performing Assets by Geographic Location and Loan Types
September 30, 1995
(Dollars in thousands)
<TABLE>
<CAPTION>
Residential Commercial Other
----------------------- --------------- ----------------
MSA/STATE A&D Const Perm Const Perm Corp Cons Total
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Atlanta, GA $ - - 26 - 320 - 346
Augusta, GA/SC - 412 631 722 1,220 1,256 4,241
Chattanooga, TN/GA - 46 111 - - 4 96 257
Savannah, GA - 192 102 - 75 16 - 385
Other - GA, SC, TN - - 124 81 1,049 - 8 1,262
------ --- ----- --- ----- ----- ----- -----
Total GA, SC, TN - 650 994 81 2,166 1,240 1,360 6,491
Other - - 658 - - 151 153 962
------ --- ----- --- ----- ----- ----- -----
Total $ - 650 1,652 81 2,166 1,391 1,513 7,453
====== === ===== === ===== ===== ===== =====
</TABLE>
SCHEDULE VIII
BANKERS FIRST CORPORATION AND SUBSIDIARIES
Performing Commercial Real Estate and Construction Loans by Geographic
Location September 30, 1995 (Dollars in thousands)
MSA/STATE
<TABLE>
<S> <C> <C>
Atlanta, GA $ 37,076 22.43%
Augusta, GA/SC 72,613 43.94
Chattanooga, TN/GA 1,722 1.04
Savannah, GA/SC 13,628 8.25
Other - GA, SC, TN 31,591 19.12
--------- ------
Total GA, SC, TN 156,630 94.78
FL, NC, VA 8,630 5.22
--------- ------
Total $ 165,260 100.00%
========= ======
</TABLE>
As defined by SFAS 114, a loan is considered impaired when, based on
current information and events, it is probable that a creditor will be unable
to collect all amounts due, including principal and interest, according to the
contractual terms of the loan agreement. SFAS 114 applies to all loans that are
identified for evaluation except loans which are collectively evaluated for
possible impairment (credit card, residential mortgage, and consumer
installment loans). As part of the loan review process, all classified loans
of $250 thousand or more are reviewed to determine possible impairment. In
addition, any other loans which the loan officer or credit analyst feels may be
impaired are included in the process, as well as all loans that are 90 or more
days delinquent as to principal or interest. Interest income on impaired loans
is recorded on the accrual basis, except for those loans on nonaccrual which
are recognized on the cash basis.
16 Bankers First Corporation
<PAGE> 17
As detailed in Schedule IX, impaired loans at September 30, 1995
totaled $4.7 million of which $3.3 million were classified as nonaccrual. Of
the $4.7 million impaired loans, $1.4 million were valued using the present
value of expected future cash flows and $3.3 million were valued based on the
fair value of the loan's collateral, or the loan balance, whichever was less.
SCHEDULE IX
BANKERS FIRST CORPORATION
Impaired Loans
September 30, 1995
(Dollars in thousands)
<TABLE>
<CAPTION>
With SFAS 114 Allowance
-----------------------------
Loan Loan Allowance
Amount Amount Amount Net
------- ------ --------- -----
<S> <C> <C> <C> <C>
Construction loans $ 353 - - 353
Residential loans 952 273 (50) 1,175
Commercial real estate loans 1,021 1,136 (268) 1,889
Corporate loans 1,022 335 (36) 1,321
------- ----- ---- -----
Total impaired loans $ 3,348 1,744 (354) 4,738
======= ===== ==== =====
</TABLE>
The average balance of impaired loans for the quarter ended September
30, 1995, was $5.3 million with income of $98 thousand recognized during the
quarter. The average balance of impaired loans for the nine months ended
September 30, 1995, was $4.6 million with income of $320 thousand recognized
for the nine month period.
Goodwill and other intangible assets are reviewed at least annually,
or more often if deemed appropriate, for possible impairment. Any impairment
is recognized by a write-down of the impaired assets. Such amounts have not
been material during any of the periods covered by this report.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of funds are deposits, principal and
interest payments on loans and mortgage-backed securities, proceeds from the
sale of loans and securities, FHLB advances, other borrowings, and earnings on
investments.
The principal uses of funds are the origination and purchase of loans,
acquisition of investment and mortgage-backed securities, interest payments on
deposits and borrowings, payment for maturing certificates, repayments of
borrowings and other operating expenses. Schedule V summarizes loan
origination, sale, payment and swap activity for the past six quarters.
On July 18, 1995 the Company sold $40.1 million of its originated
portfolio of fixed rate convertible loans (5, 7, and 10 year maturity fixed
rate loans that convert to 1 year adjustable rate loans at the respective
repricing point) at a price of 99.25 as part of an asset/liability management
strategy. The pricing loss on this transaction was offset by the recognition
of deferred fee income on these loans and an adjustment to the valuation
allowance for the present value of excess servicing rights during the 1995
second quarter. Proceeds from the loan sale were used to reduce short-term
FHLB advances.
Bankers First Corporation 17
<PAGE> 18
SCHEDULE X
BANKERS FIRST CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Average balances with yield/cost for period: Quarter ending 12 Month Average
(Dollars in thousands) September 30, 1995 1994
--------------------- ---------------------
Avg. Bal. Rate Avg. Bal. Rate
------------- ------- ------------ --------
<S> <C> <C> <C> <C>
Earning Assets
Investment portfolio $ 32,582 7.59 36,173 6.42
FHLB Stock 10,521 7.22 11,342 6.23
Mortgage Backed Securities 72,717 7.52 92,815 6.48
Residential Construction 53,638 9.68 36,357 8.52
Commercial Construction 11,005 9.27 13,897 7.99
For Sale Residential 4,573 10.23 3,090 5.11
Residential Fixed Rate 199,447 7.75 202,956 7.73
Residential ARM/GPM/Balloon 254,076 7.33 200,890 6.93
Commercial Fixed Rate 11,196 11.00 12,927 10.85
Commercial Adj/Baln/Float 148,190 9.25 153,463 8.28
Corporate Loans 18,369 9.07 16,340 8.68
Consumer Credit Cards 12,853 13.63 11,858 13.05
Consumer Single Payment 3,703 9.54 2,816 8.06
Consumer Add-On 3,207 7.48 3,742 6.60
Consumer H.O.M.E. Loans 28,778 10.26 28,297 8.66
Consumer Other Loans 142,249 8.89 100,395 8.70
Deferred Loan Fees and Unearned Interest (1,232) N/A (1,692) N/A
Reserves for Losses (7,951) N/A (8,551) N/A
------------ ----- ------- -----
Total Earning Assets $ 997,921 8.42 917,115 7.82
============ ===== ======= =====
Non-Interest Assets:
Cash and Amounts Due from Depository Institutions $ 24,736 22,521
Cost in Excess of Net Assets Acquired 4,613 2,243
Other Assets 43,312 44,055
------------ -------
72,661 68,819
------------ -------
Total Assets $ 1,070,582 985,934
============ =======
Interest Bearing Liabilities:
Overnight Money Markets $ 12,865 2.68 22,810 2.72
Certificates - 2 to 3 Month 1,225 2.91 4,180 2.94
Certificates - 6 Month 25,267 4.80 34,937 3.46
Certificates - 12 Month 132,169 6.12 62,593 3.74
Certificates - 13 to 29 Month 155,881 5.40 124,050 4.60
Certificates - 30 Month 38,587 5.02 49,184 5.06
Certificates - 31 to 59 Month 28,135 5.29 25,847 5.40
Certificates - 60 Month & Over 95,217 6.33 72,608 6.37
Jumbo Certificates 49,114 5.90 61,198 4.71
Savings Accts-Regular & Club 80,040 2.93 83,833 2.65
Super NOW Accounts 5,375 2.66 7,591 2.67
Checking Accounts 129,830 2.63 101,869 2.18
Commercial Investors Checking 15,319 2.77 17,637 2.51
Other Repurchase Agreements 41 9.68 61 3.28
Borrowed Money 188,954 5.83 221,843 5.14
Accrued Interest-Savings& Checking 5,755 N/A 3,723 N/A
------------ ----- ------- -----
Total Interest Bearing Liabilities $ 963,774 4.94 893,964 4.21
============ ===== ======= =====
Non-Interest Liabilities and Equity:
Other Liabilities $ 13,227 11,744
Total Net Worth 93,581 80,226
------------ -------
Total Non-Interest Liabilities & Equity $ 1,070,582 985,934
============ =======
</TABLE>
18 Bankers First Corporation
<PAGE> 19
At September 30, 1995, the Company maintained $28.8 million in cash
and cash equivalents and $97.7 million in investments. Approximately 50.2% of
the investment portfolio matures or reprices within twelve months. The average
balance sheets with related yield and cost data presented in Schedule X provide
additional liquidity information.
Stockholders' equity was $95.0 million at September 30, 1995, a $10.5
million increase from December 31, 1994. Net income of $9.7 million accounted
for the majority of the increase. Cash received on the exercise of stock
options and repayment of the ESOP loan receivable increased equity by $1.5
million and $0.5 million, respectively. The ESOP loan and stock option loans
are reported as a reduction to stockholders' equity. Net unrealized gain on
investment securities available for sale increased equity by $0.9 million and
dividends paid to shareholders reduced equity by $2.1 million. Average equity
to average assets was 8.29% for the nine months ended September 30, 1995
compared to 8.22% for the nine months ended September 30, 1994.
REGULATORY MATTERS
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") contained significant changes to the legal and regulatory
environment for insured depository institutions, including prompt corrective
action regulations, reductions in insurance coverage for certain kinds of
deposits, increased supervision by the Federal regulatory agencies, increased
reporting requirements for insured institutions, and new regulations concerning
internal controls, accounting, and operations.
The prompt corrective action regulations define specific capital
categories based on an institution's capital ratios. The capital categories,
in declining order, are "well capitalized", "adequately capitalized",
"undercapitalized", "significantly undercapitalized", and "critically
undercapitalized". Institutions categorized "undercapitalized" or worse are
subject to certain restrictions. To be considered "adequately capitalized", an
institution must generally have a leverage or core ratio greater than 4%, and a
total risk-based capital ratio greater than 8%.
Bankers First Savings Bank, FSB meets the regulatory definition of
well capitalized: a core capital ratio greater than 5% and a total risk-based
capital ratio greater than 10%. Schedule XI summarizes the Bank's regulatory
capital at September 30, 1995.
The Bank may distribute as a dividend the higher of 100% of its net
income to date during the calendar year plus the amount that would reduce by
one-half its surplus capital ratio at the beginning of the calendar year or 75%
of its net income over the most recent four quarter period. At September 30,
1995 the amount available for distribution as a dividend by the Bank is $17.2
million. In addition, without the approval of OTS, capital distributions may
not be made if the effect thereof would be to cause the Bank's net worth to be
reduced below the regulatory capital requirements. No dividends were paid from
the Company's bank subsidiary in 1995 and 1994.
Bankers First Corporation 19
<PAGE> 20
SCHEDULE XI
BANKERS FIRST SAVINGS BANK, FSB
Analysis of Capital and Capital Requirements
<TABLE>
<CAPTION>
September 30, 1995 Risk-
(Dollars in thousands) Tangible Core Risk- based
Tangible capital Core capital based capital
capital ratio capital ratio captial ratio
------- --------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Equity capital $74,770 $74,770 $74,770
Qualifying subordinated debentures 3,520
Cost in excess of net assets acquired (4,435) (4,435) (4,435)
General valuation allowances 7,598
Excluded unrealized net
investment gains (661) (661) (661)
------- ------- -------
Regulatory capital 69,674 6.71% 69,674 6.71% 80,792 11.52 %
Capital requirement 15,586 1.50% 41,563 4.00% 56,128 8.00 %
------- ---- ------- ---- ------- -----
Capital exceeding requirement $54,088 5.21% $28,111 2.71% $24,664 3.52 %
======= ==== ======= ==== ======= =====
</TABLE>
Legislation is currently being proposed in the United States Congress,
which among other things, would require members of the Savings Association
Insurance Fund (SAIF) to pay a special assessment to recapitalize the fund and
thereafter merge the SAIF into the Bank Insurance Fund (BIF). While
negotiation of specific provisions of the proposed legislation is ongoing
between the House and Senate Banking Committees, it is anticipated that the
SAIF recapitalization will occur in early 1996. Under the proposed
legislation, SAIF members will pay the special assessment to recapitalize their
fund based on their insured deposits held on March 31, 1995. The amount of the
assessment is to be determined by the Federal Deposit Insurance Corporation and
is expected to be approximately 85 basis points per $100 of SAIF insured
deposits. Based on the proposed legislation, Bankers First Corporation
anticipates a charge against earnings of approximately $6 million for the
special assessment. Such charge will be recorded when the amount can
reasonably be estimated and passage of the proposed legislation is probable.
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Articles of Incorporation of Bankers First
Corporation filed as Exhibit 3.1 to Form S-1
Registration Statement No. 2-87727 is
incorporated by reference herein
27 Financial Data Schedules (for SEC purposes only)
(b) Reports on Form 8-K - In a report filed on Form 8-K dated
November 2, 1995, the Company reported the signing of a merger
agreement with SouthTrust Corporation. See Exhibit Index
included on page 5 of Form 8-K.
20 Bankers First Corporation
<PAGE> 21
SIGNATURES
Pursuant to the requirement of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
BANKERS FIRST CORPORATION
By: /s/ H. M. Osteen, Jr.
------------------------------------------
H. M. Osteen, Jr.
Chairman and Chief Executive Officer
By: /s/ Glenn W. Peters
------------------------------------------
Glenn W. Peters
Corporate Vice President and
Chief Financial Officer
Date: November 13, 1995
----------------------------
Bankers First Corporation 21
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BANKERS FIRST CORPORATION FOR THE THREE AND NINE MONTH
PERIODS ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 25,054
<INT-BEARING-DEPOSITS> 3,691
<FED-FUNDS-SOLD> 75
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 52,312
<INVESTMENTS-CARRYING> 45,368
<INVESTMENTS-MARKET> 45,654
<LOANS> 885,268
<ALLOWANCE> 7,952
<TOTAL-ASSETS> 1,061,044
<DEPOSITS> 769,302
<SHORT-TERM> 111,000
<LIABILITIES-OTHER> 27,886
<LONG-TERM> 57,855
<COMMON> 48
0
0
<OTHER-SE> 94,953
<TOTAL-LIABILITIES-AND-EQUITY> 1,061,044
<INTEREST-LOAN> 56,649
<INTEREST-INVEST> 6,289
<INTEREST-OTHER> 319
<INTEREST-TOTAL> 63,257
<INTEREST-DEPOSIT> 24,838
<INTEREST-EXPENSE> 35,673
<INTEREST-INCOME-NET> 27,584
<LOAN-LOSSES> 925
<SECURITIES-GAINS> 12
<EXPENSE-OTHER> 18,680
<INCOME-PRETAX> 14,450
<INCOME-PRE-EXTRAORDINARY> 9,753
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,753
<EPS-PRIMARY> 1.93
<EPS-DILUTED> 1.93
<YIELD-ACTUAL> 3.65
<LOANS-NON> 4,844
<LOANS-PAST> 1,728
<LOANS-TROUBLED> 2,213
<LOANS-PROBLEM> 1,390
<ALLOWANCE-OPEN> 7,710
<CHARGE-OFFS> 1,039
<RECOVERIES> 356
<ALLOWANCE-CLOSE> 7,952
<ALLOWANCE-DOMESTIC> 7,952
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
