<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
--------
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from -- to --
Commission file number 0-12638
F&M BANCORP
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Maryland 52-1316473
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
110 Thomas Johnson Drive
Frederick, Maryland 21702
(Address of principal executive offices) (zip code)
301-694-4000
(Registrant's telephone number, including area 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
--------- ----------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock $5 par value, 4,426,159 shares outstanding as of July 31,
1996.
Exhibit index located on page 19.
<PAGE> 2
2
F&M BANCORP
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Part I FINANCIAL INFORMATION PAGE
----
<S> <C> <C>
Consolidated Balance Sheets (Unaudited),
June 30, 1996 and 1995 and December 31, 1995 3
Consolidated Statements of Income (Unaudited),
Three and Six Months Ended June 30, 1996 and 1995 4
Consolidated Statements of Cash Flows (Unaudited),
Six Months Ended June 30, 1996 and 1995 5
Consolidated Statements of Changes in Shareholders'
Equity (Unaudited), Six Months Ended June 30, 1996
and Twelve Months Ended December 31, 1995 6
Notes to Consolidated Financial Statements (Unaudited) 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
Part II OTHER INFORMATION
-----------------
Item 6. Exhibits and Reports on Form 8-K 23
Signatures 24
</TABLE>
<PAGE> 3
3
CONSOLIDATED BALANCE SHEETS (Unaudited)
F&M Bancorp and Subsidiary
<TABLE>
<CAPTION>
(Dollars in thousands, June 30 June 30 December 31
except per share amounts) 1996 1995 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 26,552 $ 24,602 $ 26,811
Federal funds sold 2,700 7,000 18,500
-------- -------- --------
Total cash and cash equivalents 29,252 31,602 45,311
-------- -------- --------
Loans held for sale 212 782 841
-------- -------- --------
Investment securities
Held-to-maturity, fair value
$64,986, $84,183, and $61,299,
respectively 65,220 82,713 60,146
Available-for-sale, at fair value 124,973 81,825 116,988
-------- -------- --------
Total investment securities 190,193 164,538 177,134
-------- -------- --------
Loans, net of unearned income 489,854 494,129 484,694
Less: Allowance for credit losses (6,152) (5,995) (6,164)
-------- -------- --------
Net loans 483,702 488,134 478,530
-------- -------- --------
Bank premises and equipment, net 18,393 15,685 16,391
Other real estate owned 2,570 2,784 2,351
Interest receivable 5,512 4,887 5,357
Intangible assets 4,241 5,553 4,451
Other assets 12,425 9,350 9,488
-------- -------- --------
Total assets $746,500 $723,315 $739,854
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing $ 98,188 $ 90,326 $ 96,266
Interest-bearing 530,487 526,193 524,791
-------- -------- --------
Total deposits 628,675 616,519 621,057
Federal funds purchased and
securities sold under agreements
to repurchase 37,763 32,961 40,158
Other short-term borrowings 2,000 2,000 1,392
Accrued interest and other
liabilities 6,580 5,893 7,228
-------- -------- --------
Total liabilities 675,018 657,373 669,835
-------- -------- --------
Shareholders' equity
Common stock, par value $5 per
share; authorized 10,000,000
shares; issued and outstanding
4,425,446 shares, 4,410,458
shares, and 4,413,600 shares,
respectively 22,127 22,052 22,068
Surplus 24,848 24,576 24,625
Retained earnings 25,466 20,461 23,169
Net unrealized loss on
securities available for sale (959) (1,147) 157
-------- -------- --------
Total shareholders' equity 71,482 65,942 70,019
-------- -------- --------
Total liabilities and shareholders'
equity $746,500 $723,315 $739,854
======== ======== ========
</TABLE>
<PAGE> 4
4
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
F&M BANCORP and Subsidiary
<TABLE>
<CAPTION>
Six month period Three month period
(Dollars in thousands, ended June 30 ended June 30
except per share amounts) 1996 1995 1996 1995
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $21,098 $22,029 $10,553 $11,222
Interest and dividends on investment
securities
Taxable 3,285 2,812 1,691 1,404
Tax-exempt 1,838 1,787 910 885
Interest on federal funds sold 395 21 178 18
------- ------- ------- -------
Total interest income 26,616 26,649 13,332 13,529
------- ------- ------- -------
Interest Expense
Interest on deposits 10,662 10,191 5,316 5,328
Interest on federal funds purchased
and securities sold under
agreements to repurchase 848 1,186 423 578
Interest on other short-term
borrowings 35 146 16 113
------- ------- ------- -------
Total interest expense 11,545 11,523 5,755 6,019
------- ------- ------- -------
Net interest income 15,071 15,126 7,577 7,510
Provision for credit losses 600 600 300 300
------- ------- ------- -------
Net interest income after provision
for credit losses 14,471 14,526 7,277 7,210
------- ------- ------- -------
Noninterest Income
Trust income 856 736 429 395
Service charges on deposit accounts 1,634 1,406 835 715
Gains (losses) on sales of property 35 11 35 --
Gains (losses) on sales of securities (25) -- (27) --
Other operating income 1,534 1,473 769 743
------- ------- ------- -------
Total noninterest income 4,034 3,626 2,041 1,853
------- ------- ------- -------
Noninterest Expenses
Salaries and employee benefits 6,690 6,523 3,340 3,327
Occupancy and equipment expense 1,764 1,469 887 754
Other operating expense 4,491 5,227 2,347 2,641
------- ------- ------- -------
Total noninterest expenses 12,945 13,219 6,574 6,722
------- ------- ------- -------
Income before provision for
income taxes 5,560 4,933 2,744 2,341
Provision for income taxes 1,392 1,226 665 574
------- ------- ------- -------
Net Income $ 4,168 $ 3,707 $ 2,079 $ 1,767
======= ======= ======= =======
Earnings per Common Share
Based on weighted average shares
outstanding of 4,421,195 for
1996, 4,405,971 for 1995 $ .94 $ .84 $ .47 $ .40
======= ======= ======= =======
Dividends per Share $ .40 $ .36 $ .20 $ .18
======= ======= ======= =======
</TABLE>
<PAGE> 5
5
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
F&M BANCORP and Subsidiary
<TABLE>
<CAPTION>
Six Months Ended
June 30 June 30
(Dollars in thousands) 1996 1995
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 4,168 $ 3,707
Adjustments to reconcile net income to net
cash provided by operating activities
Provision for credit losses 600 600
Provision for other real estate owned -- 318
Depreciation and amortization 671 564
Amortization of intangibles 253 244
Net premium amortization on investment securities 243 69
Increase in interest receivable (155) (130)
Increase (decrease) in interest payable (117) 175
Amortization of net loan origination costs (fees) 126 (96)
Gain on sales of property (35) (11)
Loss on sales of securities 25 --
Decrease (increase) in loans held for sale 629 (633)
Increase in other assets (2,332) (2,743)
Decrease in other liabilities (531) (188)
-------- --------
Net cash provided by operating activities 3,545 1,876
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investment securities to be held to maturity (5,130) (2,129)
Purchases of investment securities available for sale (37,010) (6,439)
Proceeds from calls of securities to be held to maturity -- 255
Proceeds from sales/calls of securities available for sale 8,479 --
Proceeds from maturing securities available for sale 18,570 10,997
Proceeds from maturing securities to be held to maturity -- 5,075
Net increase in loans (5,898) (14,032)
Purchases of premises and equipment (2,712) (2,555)
Proceeds from sales of property 128 536
Intangible assets -- (1,296)
Other investing activities (273) (48)
-------- --------
Net cash used in investing activities (23,846) (9,636)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in noninterest-bearing deposits,
interest-bearing checking, savings and money market
accounts 8,213 (16,383)
Net increase (decrease) in certificates of deposit (595) 30,723
Net increase (decrease) in federal funds purchased
and securities sold under agreements to repurchase (2,395) 1,002
Net increase in other short-term borrowings 608 67
Cash dividends paid (1,768) (1,603)
Dividend reinvestment plan (13) (31)
Proceeds from issuance of common stock 192 161
-------- --------
Net cash provided by financing activities 4,242 13,936
-------- --------
Net increase (decrease) in cash and cash equivalents (16,059) 6,176
Cash and cash equivalents at beginning of period 45,311 25,426
-------- --------
Cash and cash equivalents at end of period $ 29,252 $ 31,602
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for interest $ 11,662 $ 11,348
Cash payments for income tax 2,223 1,399
NON-CASH INVESTING AND FINANCING ACTIVITIES
Fair value adjustment for securities available
for sale, net of deferred income taxes payable
(benefits) 1,116 1,826
</TABLE>
<PAGE> 6
6
CONSOLIDATED STATEMENTS OF
CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
F&M BANCORP and Subsidiary
<TABLE>
<CAPTION>
Net Unrealized
Gain (Loss)
on Securities
(Dollars in thousands Common Retained Available
except per share amounts) Stock Surplus Earnings for Sale Total
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $21,023 $20,126 $23,706 $(2,973) $61,882
Net income -- -- 8,199 -- 8,199
Dividend reinvestment plan -- -- (46) -- (46)
Stock dividend (196,865 shares) 984 4,257 (5,241) -- --
Cash dividends paid
($.76 per share) -- -- (3,368) -- (3,368)
Stock options exercised
(16,217 shares) 82 262 -- -- 344
Stock consideration for options
exercised (4,108 shares) (21) (20) (81) -- (122)
Fair value adjustment for
securities available
for sale, net -- -- -- 3,130 3,130
------- ------- ------- ------- -------
Balance at December 31, 1995 22,068 24,625 23,169 157 70,019
Net income -- -- 4,168 -- 4,168
Dividend reinvestment plan -- -- (13) -- (13)
Cash dividends paid
($.40 per share) -- -- (1,768) -- (1,768)
Stock options exercised
(16,656 shares) 83 249 -- -- 332
Stock consideration for options
exercised (4,810 shares) (24) (26) (90) -- (140)
Fair value adjustment for
securities available
for sale, net -- -- -- (1,116) (1,116)
------- ------- ------- ------- -------
Balance at June 30, 1996 $22,127 $24,848 $25,466 $ (959) $71,482
======= ======= ======= ======= =======
</TABLE>
<PAGE> 7
7
Notes to Consolidated Financial Statements
(Unaudited)
Note 1. Summary of Significant Accounting Policies
The accompanying financial statements of F&M Bancorp ("Bancorp") are unaudited;
however, in the opinion of management, all adjustments (comprising only normal
recurring accruals) necessary for a fair presentation of the financial
statements have been included. A summary of Bancorp's significant accounting
policies is set forth in Note 1 to the consolidated financial statements in
it's Annual Report on Form 10-K for the year ended December 31, 1995 (Audited).
Certain reclassifications to prior year balances have been made in the
accompanying consolidated financial statements to make disclosures consistent
with those of the current year.
Note 2. Pending Acquisition
On April 2, 1996, Bancorp announced it had reached a definitive agreement to
acquire all of the outstanding capital stock of Home Federal Corporation,
Hagerstown, Maryland, in a tax-free transaction. Under the terms of the
agreement, Home Federal Corporation will merge with and into Bancorp. On the
effective date of the merger, each share of Home Federal Corporation's Common
Stock will be converted into a number of shares of Bancorp's Common Stock whose
aggregate value (based on the average closing price of Bancorp's Common Stock
on NASDAQ for the 20 business days preceding the date of calculation) is 1.65
times the book value of a share of Home Federal Corporation Common Stock. The
transaction is subject to the approval of federal regulatory authorities, Home
Federal stockholders, and Bancorp stockholders and is expected to be
consummated during the fourth quarter of 1996.
Home Federal Corporation had total assets at December 31, 1995 of approximately
$214,615,000. Home Federal Savings Bank, the primary subsidiary of Home
Federal Corporation, currently operates eight banking offices and eleven ATMs
in Washington and Allegany Counties, Maryland.
<PAGE> 8
8
Note 3. Investment Securities
Investment securities are summarized as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
June 30, 1996
- ----------------------------------------------------------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Available-for-sale:
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies $ 66,926 $ 45 $ 742 $ 66,229
Obligations of states
and political sub-
divisions 12,140 212 2 12,350
Mortgage-backed
securities 42,701 27 948 41,780
- ----------------------------------------------------------------------------------------------------------
Total-debt securities 121,767 284 1,692 120,359
Equity securities 4,614 -- -- 4,614
- ----------------------------------------------------------------------------------------------------------
Total available-for-sale: 126,381 284 1,692 124,973
- ----------------------------------------------------------------------------------------------------------
Held-to-maturity:
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies 4,946 27 91 4,882
Obligations of states
and political
subdivisions 60,274 586 756 60,104
- ----------------------------------------------------------------------------------------------------------
Total held-to-maturity 65,220 613 847 64,986
- ----------------------------------------------------------------------------------------------------------
Total investment
securities $191,601 $897 $2,539 $189,959
==========================================================================================================
</TABLE>
<PAGE> 9
9
Notes to Consolidated Financial Statements (continued)
(Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
June 30, 1995
- ------------------------------------------------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Available-for-sale:
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies $ 50,789 $ 166 $ 389 $ 50,566
Obligations of states
and political sub-
divisions 3,235 42 19 3,258
Other 100 -- -- 100
Mortgage-backed
securities 25,036 53 364 24,725
- ------------------------------------------------------------------------------------------------
Total-debt securities 79,160 261 772 78,649
Equity securities 3,176 -- -- 3,176
- ------------------------------------------------------------------------------------------------
Total available-for-sale: 82,336 261 772 81,825
- ------------------------------------------------------------------------------------------------
Held-to-maturity:
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies 7,127 344 -- 7,471
Obligations of states
and political
subdivisions 64,542 957 409 65,090
Mortgage-backed
securities 11,044 578 -- 11,622
- ------------------------------------------------------------------------------------------------
Total held-to-maturity 82,713 1,879 409 84,183
- ------------------------------------------------------------------------------------------------
Total investment
securities $165,049 $2,140 $1,181 $166,008
================================================================================================
</TABLE>
<PAGE> 10
10
Notes to Consolidated Financial Statements (continued)
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
December 31, 1995
- -----------------------------------------------------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Available-for-sale:
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies $ 59,896 $ 245 $118 $ 60,023
Obligations of states
and political sub-
divisions 16,979 385 1 17,363
Mortgage-backed
securities 34,041 63 214 33,890
- -----------------------------------------------------------------------------------------------------
Total-debt securities 110,916 693 333 111,276
Equity securities 5,712 -- -- 5,712
- -----------------------------------------------------------------------------------------------------
Total available-for-sale: 116,628 693 333 116,988
- -----------------------------------------------------------------------------------------------------
Held-to-maturity:
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies 4,940 57 -- 4,997
Obligations of states
and political
subdivisions 55,206 1,185 89 56,302
- -----------------------------------------------------------------------------------------------------
Total held-to-maturity 60,146 1,242 89 61,299
- -----------------------------------------------------------------------------------------------------
Total investment
securities $176,774 $1,935 $422 $178,287
=====================================================================================================
</TABLE>
<PAGE> 11
11
Notes to Consolidated Financial Statements (continued)
(Unaudited)
Bancorp classifies its investments in debt and equity securities into two
categories: held-to-maturity and available-for-sale. Securities classified as
held-to-maturity are those debt securities that Bancorp has both the positive
intent and ability to hold to maturity. These securities are carried at cost,
adjusted for amortization of premiums and accretion of discounts, which are
recognized as adjustments to interest income using the interest method.
Securities classified as available-for-sale are equity securities with readily
determinable fair values and those debt securities that Bancorp intends to hold
for an indefinite period of time but not necessarily to maturity. These
securities may be sold as part of its asset/liability management strategy, or
in response to significant movements in interest rates, liquidity needs,
regulatory capital considerations, and other similar factors. These securities
are carried at fair value, with any unrealized gains and losses reported as a
separate component of shareholders' equity, net of the related deferred tax
effect.
Regardless of the classification, dividend and interest income, including
amortization of premiums and accretion of discounts arising at acquisition, is
included in interest income in the consolidated statements of income. Realized
gains and losses, if any, determined based on the adjusted cost of the specific
securities sold, are reported as a separate line item in noninterest income in
the consolidated statements of income.
<PAGE> 12
12
Notes to Consolidated Financial Statements (continued)
(Unaudited)
The amortized cost and estimated fair values of investments at June 30, 1996
are listed below by contractual maturity. Expected maturities may differ from
contractual maturities because borrowers have the right to call or prepay
obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
Amortized Fair
(in thousands) Cost Value
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Available-for-sale:
Within 1 year $ 29,864 $ 29,940
After 1 but within 5 years 40,207 39,902
After 5 years but within 10 years 8,995 8,737
Mortgage-backed securities 42,701 41,780
Equity securities 4,614 4,614
- --------------------------------------------------------------------------------------------------
Total available-for-sale 126,381 124,973
- --------------------------------------------------------------------------------------------------
Held-to-maturity:
After 1 but within 5 years 27,701 27,909
After 5 years but within 10 years 37,410 36,969
After 10 years 109 108
- --------------------------------------------------------------------------------------------------
Total held-to-maturity 65,220 64,986
- --------------------------------------------------------------------------------------------------
Total investment securities $191,601 $189,959
==================================================================================================
</TABLE>
The amortized cost of investment securities pledged to secure public deposits,
securities sold under repurchase agreements, and for other purposes as required
and permitted by law, totaled $86,747,000 at June 30, 1996.
Proceeds from sales/calls of debt securities available for sale totaled
$8,479,000 for the period ended June 30, 1996. Gross gains of $2,000 and gross
losses of $27,000 were realized on those sales.
Proceeds from calls of debt securities held to maturity for the period ended
June 30, 1995 were $255,000. No gains or losses were realized on those calls.
<PAGE> 13
13
Notes to Consolidated Financial Statements (continued)
(Unaudited)
Note 4. Loans
Loans, net of unearned income, consist of the following:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
June 30, December 31,
- ------------------------------------------------------------------------------------------------------
(In thousands) 1996 1995 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Real Estate Loans
Construction and land development $ 18,406 $ 21,206 $ 19,326
Secured by farmland 6,333 6,176 6,212
Secured by 1 to 4 family
residential properties 101,276 116,459 111,109
Other 90,001 85,395 87,706
Loans to farmers 1,325 1,688 1,493
Commercial and industrial loans 53,447 50,491 55,622
Loans to individuals for household,
family, and other personal
expenditures 213,535 197,030 197,348
Credit card loans -- 10,983 1,057
All other loans and lease financing
receivables 5,531 4,701 4,821
- ------------------------------------------------------------------------------------------------------
Totals $489,854 $494,129 $484,694
======================================================================================================
</TABLE>
Loans to states, political subdivisions, and industrial revenue bonds are
included in all other loans in the schedule above and in loans in the statement
of condition.
The allowance for credit losses is maintained at a level which, in management's
opinion, is considered adequate to provide for possible loan losses on loans
currently held in the loan portfolio.
Note 5. Bank Premises and Equipment
Investments in bank premises and equipment are as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
June 30, December 31,
- ---------------------------------------------------------------------------------------------------
(In thousands) 1996 1995 1995
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bank premises and land $ 17,088 $ 17,111 $ 15,961
Furniture and equipment 11,934 10,417 10,968
Leasehold improvements 1,510 967 993
- ---------------------------------------------------------------------------------------------------
Less accumulated depreciation 30,532 28,495 27,922
and amortization (12,139) (12,810) (11,531)
- ---------------------------------------------------------------------------------------------------
Net premises and equipment $ 18,393 $ 15,685 $ 16,391
===================================================================================================
</TABLE>
<PAGE> 14
14
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
OVERVIEW
Bancorp's net income for the second quarter of 1996 was $2,079,000 or 47 cents
per share, an increase of $312,000 or 17.7 percent compared with the second
quarter of last year. Year-to-date net income was $4,168,000 or 94 cents per
share, an increase of $461,000 or 12.4 percent compared with the same period
last year. The improvement in earnings was primarily driven by increases in
noninterest income coupled with reductions in noninterest expenses.
Return on average assets was 1.14 percent and 1.13 percent, respectively, for
the six month and three month periods ended June 30, 1996 compared with 1.06
percent and 1.00 percent, respectively, for the six month and three month
periods ended June 30, 1995. Return on average equity was 11.83 percent and
11.77 percent, respectively, for the six month and three month periods ended
June 30, 1996 compared with 11.76 percent and 10.98 percent, respectively, for
the same periods last year.
RESULTS OF OPERATIONS
Net Interest Income.
Net interest income, which is the sum of interest and certain fees generated by
earning assets minus interest paid on deposits and other funding sources, is
the principal source of Bancorp's earnings. Net interest income is impacted by
changes in the volume and mix of earning assets and funding sources, market
interest rates, monetary policy of the Federal Reserve Board and other factors.
Average balances and rates for major categories of interest-earning assets and
interest-bearing liabilities for the three and six month periods ended June 30,
1996 and June 30, 1995, respectively, appear in Table 1. Net interest income
on a taxable-equivalent basis declined $42,000 or 0.9 percent for the first six
months compared with the same period last year. Rate related declines in
interest expense were offset by a decline in interest income resulting from a
change in the mix of earning assets from loans to investments and federal funds
sold. Average earning assets increased 3.1 percent from June 30, 1995. The
percentage of average loans to average earning assets declined to 70.8 percent
from 74.4 percent. The average yield on earning assets for the first six
months declined 28 basis points compared with the same period in 1995. Total
average interest-bearing liability balances increased 2.8 percent from 1995
however the average rate paid thereon declined 12 basis points due to a decline
in borrowed funds. Deposit growth was assisted by the acquisition of two
branch offices of First Union National Bank of Maryland in the second quarter
of 1995 which added $16.1 million in deposits.
<PAGE> 15
15
Table 1 Average Balances, Interest and Average Rates
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
- --------------------------------------------------------------------------------------------------------------------
1996 1995 1996 1995
- --------------------------------------------------------------------------------------------------------------------
Average Average Average Average
- --------------------------------------------------------------------------------------------------------------------
(Dollars in thousands) Balance Rate Balance Rate Balance Rate Balance Rate
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets
Federal funds sold $ 13,317 5.38% $ 1,265 5.71% $14,550 5.46% $ 731 5.79%
- --------------------------------------------------------------------------------------------------------------------
Investment securities(1)(2)
Taxable 114,044 5.93 98,477 5.69 111,364 5.90 99,725 5.64
Tax-exempt 72,160 7.64 67,712 7.93 72,481 7.68 68,609 7.89
- --------------------------------------------------------------------------------------------------------------------
Total investment securities 186,204 6.59 166,189 6.61 183,845 6.60 168,334 6.56
- --------------------------------------------------------------------------------------------------------------------
Loans, net of unearned interest 483,295 8.82 494,295 9.14 481,260 8.85 490,066 9.10
- --------------------------------------------------------------------------------------------------------------------
Total interest-earning assets 682,816 8.15 661,749 8.50 679,655 8.18 659,131 8.46
- --------------------------------------------------------------------------------------------------------------------
Interest-bearing liabilities
Interest-bearing deposits
Checking 70,150 2.00 66,833 2.32 70,414 2.00 67,571 2.34
Savings 112,356 2.58 111,526 3.03 111,329 2.62 112,816 2.95
Money Market 84,912 3.17 84,255 3.63 84,424 3.09 87,503 3.57
Certificates of deposit 262,431 5.48 242,263 5.52 261,938 5.54 235,440 5.32
- --------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 529,849 4.04 504,877 4.23 528,105 4.05 503,330 4.08
- --------------------------------------------------------------------------------------------------------------------
Short-term borrowings
Federal funds purchased and securities
sold under agreements to repurchase 35,384 4.81 39,383 5.90 34,800 4.90 40,910 5.85
Other 1,334 4.82 6,860 6.61 1,365 3.43 4,621 6.37
- --------------------------------------------------------------------------------------------------------------------
Total short-term borrowings 36,718 4.81 46,243 6.00 36,165 4.91 45,531 5.90
- --------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 566,567 4.09 551,120 4.38 564,270 4.11 548,861 4.23
- --------------------------------------------------------------------------------------------------------------------
Interest-free funds 116,249 110,629 115,385 110,270
- --------------------------------------------------------------------------------------------------------------------
Total funding 682,816 3.39 661,749 3.64 679,655 3.42 659,131 3.52
- --------------------------------------------------------------------------------------------------------------------
Net interest earnings* $ 8,087 $ 8,012 $16,099 $16,141
- --------------------------------------------------------------------------------------------------------------------
Net interest spread 4.06% 4.12% 4.07% 4.23%
- --------------------------------------------------------------------------------------------------------------------
Net yield on earning assets 4.76% 4.86% 4.76% 4.94%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
*Includes the following taxable-equivalent adjustments: Second quarter - $510
thousand in 1996 and $502 thousand in 1995; six months - $1,028 thousand in
1996 and $1,015 thousand in 1995. Each represents a pro forma amount of net
interest income (above the amount reported in the income statement) that
adjusts the yield on tax-exempt assets to a basis equivalent to that of taxable
assets.
(1)Excludes fair value adjustments.
(2)Includes interest-bearing deposits with banks.
Net interest income on a taxable-equivalent basis increased $75,000 or 1.0
percent for the second quarter compared with the same quarter last year.
Average yield on earning assets for the quarter declined 35 basis points
compared with the same quarter last year, while the average rate paid on
interest-bearing liabilities decreased 29 basis points. Average earning assets
for the quarter increased 3.2 percent from 1995 but average loans declined.
Average interest-bearing deposits for the quarter increased 4.9 percent while
average short-term borrowings declined 79.4 percent compared with the same
quarter in 1995. The growth in earning assets was also partially funded by a
5.1 percent increase in interest-free funds.
<PAGE> 16
16
The net interest margin, the ratio of taxable-equivalent net interest income to
earning assets, declined 18 basis points for the first six months of 1996
compared with the same period last year and declined 10 basis points for the
second quarter of 1996 compared with the second quarter of last year. The net
interest margin declined as the rate of growth in earning assets exceeded the
rate of growth in net interest income.
Management continually monitors Bancorp's balance sheet to insulate net
interest income from significant swings caused by interest rate volatility
using the concept of natural hedges, a process of adjusting balance sheet
positions having individual interest rate risks to control the net interest
rate risk as a whole. Derivative financial instruments such as futures,
forwards, swaps, option contracts, or other financial instruments with similar
characteristics are not currently utilized. As market rates change,
corresponding changes in asset mix, funding sources and pricing are considered
to avoid a negative impact on net interest income.
TABLE 2. INTEREST RATE SENSITIVITY ANALYSIS AT JUNE 30, 1996 (1)
<TABLE>
<CAPTION>
Total
Total Greater quarter
1-30 31-90 91-180 181-365 within than end
(In thousands) days days days days 1 year 1 year balance
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-earning
Assets:
Federal funds
sold $ 2,700 $ -- $ -- $ -- $ 2,700 $ -- $ 2,700
Investment
securities (2) 1,226 7,244 8,699 13,301 30,470 157,148 187,618
Loans, net 77,103 19,808 25,999 53,593 176,503 301,119 477,622
------- ------- ------- ------- -------- -------- --------
Total $81,029 $ 27,052 $ 34,698 $ 66,894 $ 209,673 $458,267 $667,940
======= ======= ======= ======= ======== ======== ========
Interest-bearing
Liabilities:
Deposits $49,439 $ 63,675 $ 61,738 $ 113,796 $ 288,648 $241,839 $530,487
Short-term
borrowings 39,763 -- -- -- 39,763 -- 39,763
------- ------- ------- -------- -------- -------- --------
Total $89,202 $ 63,675 $ 61,738 $ 113,796 $ 328,411 $241,839 $570,250
======= ======= ======= ======== ======== ======== ========
Interest
Sensitivity Gap:
Period $(8,173) $(36,623) $(27,040) $ (46,902) $(118,738) $216,428 $97,690
Cumulative (8,173) (44,796) (71,836) (118,738) (118,738) 97,690 97,690
</TABLE>
(1) Excludes nonaccrual loans and other nonrate-sensitive assets.
(2) Reflects fair value adjustments for securities available for sale.
<PAGE> 17
17
Bancorp attempts to measure the interest rate sensitivity of its assets and
liabilities on the basis of when they will reprice as opposed to when they can
reprice. Since it is difficult to predict the movement of interest rates,
management's objective is to maintain a relatively balanced sensitivity
position, while not foregoing any opportunity to benefit from current rate
conditions. As indicated in Table 2, Bancorp had a net liability sensitive
position of $118,738,000 within the one year horizon at June 30, 1996. This
position would indicate that Bancorp has the potential for decreased earnings
if market rates were to rise in the next twelve months. Conversely, if market
rates were to decline in the next twelve months, an increase in earnings would
be anticipated.
Due to inherent limitations in this traditional gap analysis technique for
measuring interest rate sensitivity, management also employs more
sophisticated interest sensitivity measurement tools to analyze the volatility
of net interest income as a result of changes in interest rates. Simulation
models are used to subject the current repricing gap position to rising and
falling incremental changes in interest rates of 100, 200, and 300 basis
points, and to forecast how net interest income varies under alternative
interest rate and business activity scenarios. The effects of changes in
interest rates on the market value of assets, liabilities, and off-balance
sheet contracts is also measured. At June 30, 1996, the changes in net
interest income and/or market value calculated under these alternative methods
were within limits established by the Board of Directors.
Noninterest Income.
Noninterest income increased $408,000 or 11.3 percent for the first six months
of 1996 when compared with the same period last year. Nearly all categories of
noninterest income increased as management continued its focus on business
lines which present opportunities for future revenue enhancement. Contributing
significantly to the increase was income from deposit services, which increased
$228,000 or 16.2 percent, and Trust income, which increased $120,000 or 16.2
percent.
For the three month period ended June 30, 1996, noninterest income increased
$188,000 or 10.1 percent compared with the same period last year. The increase
was primarily attributable to increases in income from deposit services, which
increased $120,000 or 16.8 percent, and Trust income which increased $34,000 or
8.6 percent. Nonrecurring gains of $35,000 from property sales and losses from
the sale of securities totaling $27,000 were recognized in 1996 but no gains or
losses from property or securities sales were recognized in 1995.
<PAGE> 18
18
Noninterest Expenses.
Noninterest expenses decreased $274,000 or 2.1 percent for the first half of
the year and $294,000 or 2.2 percent for the second quarter compared with the
same periods last year. Noninterest expenses declined despite the increased
overhead associated with the continued expansion of the retail delivery system.
Current year results reflect the full impact from the two First Union offices
acquired in June, 1995 and the addition of a de novo office in March, 1996.
Increases in salaries and employee benefits and occupancy and equipment
expenses were more than offset by decreases in other operating expenses. The
largest single factor in the decline in other operating expenses was lower FDIC
insurance premiums which decreased $624,000 year-to-date and $309,000 for the
quarter compared with the same periods last year. Congress is still
considering legislation that may increase FDIC insurance assessments in the
near term on deposits insured by the Bank Insurance Fund and impose a one-time
assessment on deposits insured by the Savings Association Insurance Fund.
Income Taxes.
The provision for income taxes increased $166,000 and $91,000, respectively,
for the six month and three month periods ended June 30, 1996 compared with the
same periods last year. Tax expense varies from one period to the next with
changes in the level of income before taxes, changes in the amount of
tax-exempt income, and the relationship of these changes to each other.
Bancorp's effective tax rates for the first six months of 1996 and 1995 were
25.0 percent and 24.9 percent, respectively. For the second quarter of 1996
and 1995, the effective tax rates were 24.2 percent and 24.5 percent. Bancorp's
income tax expense differs from the amount computed at statutory rates
primarily due to tax-exempt interest from certain loans and investment
securities.
NONPERFORMING ASSETS
Table 3 summarizes Bancorp's nonperforming assets and contractually past due
loans. Total nonperforming assets at June 30, 1996 have declined $665,000
compared with year earlier levels and have increased only slightly since
year-end. Loans past due 90 or more days as to interest or principal reflected
a $311,000 increase compared with prior year levels but have declined since
year-end. Although there is no direct correlation between nonperforming loans
and ultimate loan losses, an analysis of the nonperforming loans may provide
some indication of the quality of the loan portfolio. Management believes that
the amounts of its nonperforming loans and past due loans are modest in
relation to the size of the loan portfolio.
<PAGE> 19
19
At June 30, 1996 Bancorp had loans amounting to approximately $815,000 that
were specifically classified as impaired and included as non-accrual loans in
Table 3. No specific allowance for credit losses related to impaired loans was
required. The average balance of impaired loans for the three and six month
periods ended June 30, 1996 were $826,000 and $857,000, respectively. During
the first half of the year, cash receipts totaling $75,000, of which $38,000
was received in the second quarter, were applied to reduce the principal
balance of these impaired loans and no interest income was recognized.
TABLE 3. NONPERFORMING ASSETS AND CONTRACTUALLY PAST DUE LOANS
<TABLE>
<CAPTION>
June 30 June 30 December 31
(Dollars in thousands) 1996 1995 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nonperforming Assets:
Nonaccrual loans(1) $1,147 $1,598 $1,163
Other real estate owned
net of valuation allowance(2)(4) 2,570 2,784 2,351
- -----------------------------------------------------------------------------------------------------
Total nonperforming assets $3,717 $4,382 $3,514
- -----------------------------------------------------------------------------------------------------
Loans past due 90 or more days
as to interest or principal(3) $ 729 $ 418 $744
- -----------------------------------------------------------------------------------------------------
Nonperforming loans to
period-end loans 0.23% 0.32% 0.24%
Nonperforming assets to
period-end loans and
other real estate owned 0.75% 0.88% 0.72%
Period-end allowance for credit
losses times nonperforming loans 5.36x 3.75x 5.30x
Period-end allowance for credit
losses times nonperforming assets 1.66x 1.37x 1.75x
</TABLE>
(1)Loans are placed on nonaccrual status when, in the opinion of
management, reasonable doubt exists as to the full, timely collection of
interest or principal or a specific loan meets the criteria for nonaccrual
status established by regulatory authorities. When a loan is placed on
nonaccrual status, all interest previously accrued but not collected is
reversed against current period interest income. No interest is taken into
income on nonaccrual loans unless received in cash or until such time the
borrower demonstrates sustained performance over a period of time in accordance
with contractual terms.
(2)Other real estate owned includes: banking premises no longer used
for business purposes and real estate acquired by foreclosure (in partial or
complete satisfaction of debt) or otherwise surrendered by the borrower to
Bancorp's possession. Other real estate owned is recorded at the lower of cost
or fair value on the date of acquisition or transfer from loans. Write-downs
to fair value at the date of acquisition are charged to the allowance for
credit losses. Subsequent to transfer, these assets are adjusted through a
valuation allowance to the lower of the net carrying value or the fair value
(net of estimated selling expenses) based on periodic appraisals.
(3)Nonaccrual loans are not included.
(4)Consists principally of the real estate held in a limited
partnership and includes minority interests totaling $756,000, $706,000, and
$727,000 at June 30, 1996, June 30, 1995, and December 31, 1995, respectively.
<PAGE> 20
20
POTENTIAL PROBLEM LOANS
At June 30, 1996, Bancorp had performing loans amounting to $9,867,000 that
were identified as potential problem loans because the borrowers were currently
experiencing financial difficulties such that management had concerns that such
loans might, in the future, become classified as nonaccrual or delinquent. At
December 31, 1995, these loans totaled $21,003,000. The decrease in the amount
of these loans during 1996 is a reflection of an improvement in credit quality.
As of June 30, 1996, management does not believe that these loans present any
significant risk of loss.
ALLOWANCE FOR CREDIT LOSSES
The allowance for credit losses was $6,152,000 or 1.3 percent of loans
outstanding as of June 30, 1996 compared with $6,164,000 or 1.3 percent of
loans outstanding as of December 31, 1995 and $5,995,000 or 1.2 percent of
loans outstanding as of June 30, 1995. The provision for credit losses for
both the second quarter and first half of 1996 was unchanged from prior year
amounts. As reflected in Table 4, net charge-offs for the six month period
ended June 30, 1996 increased $214,000 but decreased $91,000 in the second
quarter of 1996 compared with the same periods last year.
TABLE 4. ANALYSIS OF ALLOWANCE FOR CREDIT LOSSES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Period ended
- -------------------------------------------------------------------------------------------------------
June 30 June 30 December 31
(Dollars in thousands) 1996 1995 1995
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Average loans outstanding
less average unearned income $480,304 $489,743 $491,513
=======================================================================================================
Allowance for credit losses
at beginning of year $ 6,164 $ 5,793 $ 5,793
- -------------------------------------------------------------------------------------------------------
Charge-offs
Real estate 7 21 427
Commercial and industrial 10 14 70
Consumer 1,604 1,075 2,758
- -------------------------------------------------------------------------------------------------------
Total loans charged-off 1,621 1,110 3,255
- -------------------------------------------------------------------------------------------------------
Recoveries
Real estate 9 21 21
Commercial and industrial 2 8 22
Consumer 998 683 1,583
- -------------------------------------------------------------------------------------------------------
Total recoveries 1,009 712 1,626
- -------------------------------------------------------------------------------------------------------
Net charge-offs 612 398 1,629
- -------------------------------------------------------------------------------------------------------
Additions charged to
operating expense 600 600 2,000
- -------------------------------------------------------------------------------------------------------
Allowance for credit losses
at end of period $ 6,152 $ 5,995 $ 6,164
=======================================================================================================
Ratio of net charge-offs to
average loans outstanding 0.13% 0.08% 0.33%
=======================================================================================================
</TABLE>
<PAGE> 21
21
Based upon management's analysis and review of the loan portfolio, past loss
experience, and current economic conditions, the amount in the allowance for
credit losses at June 30, 1996 is considered adequate. Management's estimate
of credit losses inherent in the credit extension process and the related
allowance may change in the near term due to uncertainties inherent in the
estimation process.
TABLE 5. ALLOCATION OF ALLOWANCES FOR CREDIT LOSSES
<TABLE>
<CAPTION>
June 30, 1996 June 30, 1995 December 31, 1995
---------------------------------------------------------------------
% Gross % Gross % Gross
(Dollars in thousands) Amount Loans(1) Amount Loans(1) Amount Loans(1)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Real estate
Construction and
land development $ 612 3.7% $ 760 4.3% $ 694 4.0%
Residential mortgage 207 20.7 113 23.6 69 22.9
Other mortgage 898 18.4 743 17.3 969 18.1
Commercial and industrial 711 10.9 1,373 10.2 954 11.5
Consumer 1,890 43.6 1,819 42.1 1,946 40.9
Unallocated 1,834 2.7 1,187 2.5 1,532 2.6
- -----------------------------------------------------------------------------------------------------------------
Total allowance for
credit losses $6,152 100.0% $5,995 100.0% $6,164 100.0%
=================================================================================================================
</TABLE>
(1)Excludes loans held for sale.
Table 5 presents an allocation of the allowance for credit losses to various
loan categories. This allocation does not limit the amount of the allowance
available to absorb losses from any type of loan and should not be viewed as an
indicator of the specific amount or specific loan categories in which future
charge-offs may ultimately occur.
CAPITAL RESOURCES
Shareholders' equity totaled $71,482,000 at June 30, 1996, an increase of 2.1
percent compared with the 1995 year end level of $70,019,000 and an increase of
8.4 percent from the year earlier level of $65,942,000. The fair value of the
available for sale portfolio increased $1,116,000 (net of deferred taxes) since
year end. Capital levels are considered sufficient to absorb anticipated
future price volatility in the available-for-sale portfolio. Bancorp's
risk-based capital and leverage capital ratios continue to exceed regulatory
guidelines as of June 30, 1996, as follows:
TABLE 6. CAPITAL RATIOS
<TABLE>
<CAPTION>
Risk-based Capital
----------------------
Tier 1 Total Leverage
Capital Capital Ratio
------- ------- --------
<S> <C> <C> <C>
Actual 12.76% 13.90% 9.39%
Minimum 4.00% 8.00% 3.00%
------- ------- --------
Excess 8.76% 5.90% 6.39%
======= ======= ========
</TABLE>
<PAGE> 22
22
Fair value adjustments to shareholders' equity for changes in the fair value of
securities classified as available-for-sale are excluded from the calculation
of these capital ratios in accordance with regulatory guidelines. Risk-based
capital ratios and leverage ratios will continue to exceed regulatory
guidelines after the Home Federal acquisition is finalized.
<PAGE> 23
23
<TABLE>
<CAPTION>
Item 6 Exhibits and Reports on Form 8-K Page
----
<S> <C> <C>
(a) Exhibits
11 Statement Re: Computation of per share earnings. 25
27 Financial Data Schedule
</TABLE>
(b) A report on Form 8-K Item 5. Other Events was filed on April 8, 1996
to announce the execution of a Plan and Agreement to Merge dated as of
April 2, 1996 by the Registrant and Home Federal Corporation, a
Maryland thrift holding company.
<PAGE> 24
24
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.
F&M BANCORP
-----------
(Registrant)
August 8, 1996 /s/Kenneth M. Sabanosh
- -------------- -----------------------------
Date KENNETH M. SABANOSH
VICE PRESIDENT AND TREASURER
<PAGE> 1
25
Exhibit 11
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Six Month Period Ended, Quarter Ending
June 30, June 30,
1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Earnings Per share:
Primary $ .93 $ .83 $ .47 $ .40
Fully
diluted $ .93 $ .83 $ .47 $ .40
</TABLE>
Primary and fully diluted earnings per share are calculated using the following
number of adjusted weighted average shares outstanding:
<TABLE>
<CAPTION>
Six Month Period Ended, Quarter Ending
June 30, June 30,
1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Primary 4,457,497 4,451,775 4,450,853 4,450,853
Fully
diluted 4,457,443 4,451,803 4,450,853 4,450,853
</TABLE>
The weighted average number of shares outstanding is adjusted to recognize the
dilutive effect, if any, of outstanding employee stock options on both a
primary and fully diluted basis.
The calculations of earnings per share above are based on the weighted average
number of shares outstanding including all common stock and common stock
equivalents in conformity with the instructions for Item 601 of Regulation S-K.
The calculation of earnings per share for financial reporting purposes is based
on the weighted average number of shares outstanding of 4,421,195 and 4,405,971
at June 30, 1996 and June 30, 1995, respectively, without giving effect to the
common stock equivalents resulting from the assumed exercise of stock options,
which do not dilute earnings per share by more than 3 percent, in conformity
with generally accepted accounting principles.
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 26,552
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,700
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 124,973
<INVESTMENTS-CARRYING> 65,220
<INVESTMENTS-MARKET> 64,986
<LOANS> 489,854
<ALLOWANCE> 6,152
<TOTAL-ASSETS> 746,500
<DEPOSITS> 628,675
<SHORT-TERM> 39,763
<LIABILITIES-OTHER> 6,580
<LONG-TERM> 0
0
0
<COMMON> 22,127
<OTHER-SE> 49,355
<TOTAL-LIABILITIES-AND-EQUITY> 746,500
<INTEREST-LOAN> 21,098
<INTEREST-INVEST> 5,123
<INTEREST-OTHER> 395
<INTEREST-TOTAL> 26,616
<INTEREST-DEPOSIT> 10,662
<INTEREST-EXPENSE> 11,545
<INTEREST-INCOME-NET> 15,071
<LOAN-LOSSES> 600
<SECURITIES-GAINS> (25)
<EXPENSE-OTHER> 12,945
<INCOME-PRETAX> 5,560
<INCOME-PRE-EXTRAORDINARY> 5,560
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,168
<EPS-PRIMARY> .93
<EPS-DILUTED> .93
<YIELD-ACTUAL> 4.76
<LOANS-NON> 1,147
<LOANS-PAST> 729
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 9,867
<ALLOWANCE-OPEN> 6,164
<CHARGE-OFFS> 1,621
<RECOVERIES> 1,009
<ALLOWANCE-CLOSE> 6,152
<ALLOWANCE-DOMESTIC> 4,318
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,834
</TABLE>
