UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 10-K
( X ) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from.................to...........
Commission file number 0-12635
SOUTHERN JERSEY BANCORP OF DELAWARE, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 22-2983654
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
53 South Laurel Street, Bridgeton, New Jersey 08302-1293
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (609) 451-2222
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $1.67
(Title of Class)
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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Sec. 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. (______)
As of March 14, 1996, Registrant has 5,000,000 shares of $1.67 par
value common stock authorized, with 1,085,797 shares outstanding, which is
the only class of common stock or voting stock of the Registrant. As of
that date, the aggregate market value of the shares of common stock held
by non-affiliates of theRegistrant (based on most recent sales prices
known to Management) was approximately $41,260,000.
DOCUMENTS INCORPORATED BY REFERENCE
PART III - The information called for by Part III is incorporated by
reference to the definitive Proxy Statement for the Annual Meeting of the
Shareholders of the Registrant to be held April 11, 1996, and which will be
filed with the Securities and Exchange Commission not later than 120 days
after December 31, 1995.
<PAGE>
PART I
Item 1. Business
Background
Southern Jersey Bancorp of Delaware, Inc. (Registrant), a bank
holding company, was organized under the laws of the State of Delaware on
June 9, 1989. On July 17, 1989, Registrant acquired all the outstanding
common shares of Southern Jersey Bancorp, a bank holding company organized
under the laws of the State of New Jersey (predecessor Registrant). As of
this same date, Southern Jersey Bancorp was merged into Registrant.
Registrant's wholly-owned subsidiary, Farmers and Merchants
National Bank of Bridgeton (the Bank), is a commercial bank which was first
organized under the laws of the State of New Jersey and the United States
Government in 1909, and all outstanding shares of the Bank were acquired by
the predecessor Registrant on May 22,1984.
The Bank's wholly-owned subsidiary, F&M Investment Company
(Investment Company), was organized under the laws of the State of Delaware
in 1984 for the purpose of holding and managing investment securities.
Description of Business
Registrant is engaged in the business of managing or controlling
its wholly-owned subsidiary bank and other such businesses related to banking
as may be authorized under federal and state banking laws.
The Bank provides traditional services that are standard to the
commercial banking industry and maintains a Trust Department that provides
traditional fiduciary and agency services standard to the banking industry.
The Bank operates in the Counties of Cumberland, Gloucester and
Salem in Southern New Jersey through branch offices with the main office
situated in Bridgeton,New Jersey. Within the market area in which the Bank
operates, there are numerouscommercial banks, savings and loan associations,
credit unions, etc. The number of competitors cannot be reasonably estimated.
The Bank is one of the largest independently owned financial institution in
the market area and is one of the most profitable financial institutions in
the State of New Jersey. During 1995, the Bank opened two new branch
offices in New Jersey. The principal methods of competition are those
that are standard to the banking industry, such as interest rates and
customer services.
Environmental and Safety Regulations
In the opinion of Registrant, compliance with current laws
and regulations pertaining to the environment, health and safety has
not materially affected its business or financial condition, and
Registrant believes that such matters will not have a material effect
on its business or financial condition in the foreseeable future.
After giving effect to pending programs for environmental compliance,
Registrant expects to be in material compliance with currently
applicable environmental, health and safety laws and regulations.
General
Employees - Registrant employs approximately 211 people who are
not covered by collective bargaining agreements with any unions.
In general, relationships with employees have been satisfactory.
<PAGE>
Customers - Registrant is not dependent upon any single customer
or upon any single group of customers, the loss of which would have
a material adverse effect on Registrant.
Other - Registrant does not have research and development
expenditures, backlog of orders and inventory, patents or trademarks, any
seasonality of business, business under government contracts subject to
renegotiation of profits or contract termination or reportable industry
segments as described in SFAS 14, and does not use raw materials.
The banking business of Registrant and the Bank is subject
tocomprehensive and detailed regulation by federal supervisory agencies;
in particular, the Office of the Comptroller of Currency, the Federal Deposit
Insurance Corporation, and the Federal Reserve Board, as well as the
Securities and Exchange Commission. These agencies have broad
administrative authority which includes, but is not limited to, dividends,
expansion of locations, acquisitions and mergers, interest rates,
reserves against deposits, terms, amounts and charges to borrowers,
investments, ownership of certain companies by bank holding companies.
The banking business of Registrant and the Bank is also subject to the
banking laws of the States of New Jersey and Delaware.
The federal banking regulatory authorities (The Board of
Governors of the Federal Reserve System, the Office of the Comptroller
of the Currency, and the Federal Deposit Insurance Corporation) may
take action against the Registrant and the Bank for failure to maintain
minimum levels of capital and minimum leverage ratios and failure to
comply with regulations promulgated under the FDIC Improvement
Act of 1991 (FDICIA) and the Financial Institutions Reform, Recovery
and Enforcement Act of 1989 (FIRREA). The Bank's Tier 1 and risk
weighted capital ratios at December 31, 1995 are 13.9% and 14.8%,
respectively. This is well in excess of the minimum required of 4%
and 8%.
FDICIA generally prohibits a depository institution from
making any capital distribution (including payment of dividends) or paying
any management fee to its holding company if the depository institution
would thereafter be undercapitalized. Undercapitalized depository
institutions are subject to growth limitations, prohibitions on the payment
of interest rates in excess of 75 basis points above the average market yields
for comparable deposits, and are required to submit a capital restoration
plan. The federal banking agencies may not accept a capital plan without
determining, among other things, that the plan is based on realistic
assumptions and is likely to succeed in restoring the depository institution's
capital. In addition,for a capital restoration plan to be acceptable, the
depository institution's parent holding company must guarantee that the
institution will comply with such capital restoration plan. The aggregate
liability of the parent holding company is limited
to the lesser of (i) an amount equal to 5% of the depository institution's
total assets at the time it became undercapitalized and (ii) the amount which
is necessary or would have been necessary to bring the institution into
compliance with all capital standards applicable with respect to such
institution as of the time it fails to comply with the plan. If a depository
institution that is required to submit a capital restoration plan fails to
submit an acceptable plan, it is treated as if it is significantly
undercapitalized.
Significantly, undercapitalized depository institutions may be
subject to a number of requirements and restrictions including orders to sell
sufficient voting stock to become adequately capitalized, requirements to
reduce total assets, or desist accepting deposits from correspondent banks,
and restrictions on senior executive compensation and on interaffiliate
transactions. Critical undercapitalization institutions are subject to a
number of additional restrictions including the appointment of a receiver
or conservator.
<PAGE>
Regulations promulgated under FDICIA also require that an institution
monitor its capital levels closely and notify its appropriate federal banking
regulators within 15 days of any material events that affect the capital
position of the institution.
FDICIA directs that each federal banking agency prescribe the
standards for depository institutions and depository institution holding
companies
relating to internal controls, information systems, internal audit systems,
loan documentation, credit underwriting, interest rate exposure, asset
growth, and a maximum ratio of classified assets to capital, minimum
earnings sufficient to absorb losses, a minimum ratio of market value
to book value for publicly traded shares, and other such standards as
the agency deems appropriate. FDICIA also contains a variety
of other provisions that could affect the operations of the Company
including new reporting requirements, regulatory standards for real
estate lending, "truth-in-savings" provisions, the requirement that a
depository institution give 90 days prior notice to customers and
regulatory authorities before closing any branch, certain restrictions
on investments and activities of state chartered insured banks and their
subsidiaries, limitations on credit exposure between banks, restrictions
on loans to a bank's insiders, guidelines governing regulatory
examinations, and a prohibition on the acceptance or renewal of brokerage
deposits by depository institutions that arenot well capitalized or
are adequately capitalized and have not received a waiver from the
FDIC. Based on the regulations existing in perspective,none of
the aforementioned requirements are expected to impose a material
cost on the Company or to result in significant changes to the Company's
operations.
Under FIRREA, a depository institution insured by the FDIC can be held
liable for any loss incurred by or reasonably expected to be incurred
by the FDIC after August 9, 1989, in connection with (i) the default of
commonly controlled FDIC insured depository institution or (ii) any
assistance provided by the FDIC to a commonly controlled FDIC insured
depository institution in danger of default. "Default" is defined
generally as the appointment of a conservator or receiver, and "in
danger of default" is defined generally as the existence of certain
conditions indicating that a default is likely to occur in the absence
of regulatory assistance. FIRREA and the Crime Control Act of 1990
expand the enforcement powers available to federal banking regulators
including providing greater flexibility to impose enforcement action,
expanding the category of persons dealing with a bank or subject to
enforcement action, increasing the potential civil and criminal
penalties. In addition, in the event of a holding company insolvency,
the Crime Control Act of 1990 affords a priority in respect of capital
commitments made by a holding company on behalf of subsidiary banks.
As more fully discussed in Item 7, Management's
Discussion and Analysis, and the Notes to the Consolidated Financial
Statements, the Registrant and the Bank are deemed "well capitalized"
as it significantly exceeds the minimum level required by regulation
for each relevant capital measure.
Registrant has only domestic operations which are
primarily concentrated in Cumberland and Salem Counties of New Jersey.
Item 1a. Executive Officers of Registrant
Set forth below are the names, ages, and titles of
persons with Registrant and present and past positions of the persons
serving as executive officers of Registrant and its subsidiaries.
Unless otherwise stated, each officer has served in his present
position since April, 1993.
<PAGE>
NAME AND AGE OFFICE AND EXPERIENCE
Clarence D. McCormick, Sr. 66 President and Chief Executive Officer
of Southern Jersey Bancorp of
Delaware, Inc., President of F&M
Investment Company,Chief Executive
Officer of Farmers and Merchants
National Bank of Bridgeton, NJ
Clarence D. McCormick, Jr. 35 Vice President of F&M Investment
Company and President of Farmers and
Merchants National Bank of Bridgeton,
NJ since April 20, 1995
Ralph A. Cocove, Sr. 57 Executive Vice President and Cashier
of Farmers and Merchants National Bank
of Bridgeton, NJ
Robert C. Wolf 52 Executive Vice President of
Administration of Farmers and Merchants
National Bank of Bridgeton, NJ since May
13, 1993. Prior to 1993, Mr. Wolf was an
officer of United Jersey Bank/South for
20 years.
Paul J. Ritter 35 Senior Vice President and Comptroller
of Farmers and Merchants National Bank
of Bridgeton, NJ since April 20, 1995
Harry W. Bullock 69 Secretary and Treasurer of Southern
Jersey Bancorp of Delaware, Inc.,
Senior Vice President and Assistant
Comptroller of Farmers and Merchants
National Bank of Bridgeton, NJ since
April 20, 1995
Russell Chappius, Sr. 54 Senior Vice President and Operations
Officer of Farmers and Merchants
National Bank of Bridgeton, NJ
Charles S. Kessler 57 Senior Vice President and Data
Processing Manager of Farmers and
Merchants National Bank of
Bridgeton, NJ
Simon Aman 59 Senior Vice President and Senior
Trust Officer of Farmers and Merchants
National Bank of Bridgeton, NJ, and
Investment Officer of F&M Investment
Company since May 16, 1994. Prior to
1994, Mr. Aman was a Trust Officer
with Central National Bank in
Canajohaire, New York for 3 1/2 years
and Union National Bank in
Albany, New York for 15 years.
<PAGE>
STATISTICAL DISCLOSURES UNDER GUIDE 3
Schedule I
Item I(A) Average Balance Sheets
December 31
1995 1994 1993
ASSETS
Cash and due from banks $15,561 $16,348 $15,876
Interest-bearing deposits 2,342 1,540 1,970
Federal funds sold 16,113 21,221 32,341
Investment securities
-Taxable 88,496 103,456 99,453
Investment securities
-Tax Exempt 38,264 42,266 36,232
Loans net of unearned
income 210,327 169,025 145,232
Less: Allowance for
loan losses 2,349 2,283 2,076
Net loans 207,978 166,742 143,156
Bank premises
and equipment - net 5,819 5,109 5,038
Other assets 8,525 7,839 7,999
------- ------- -------
TOTAL ASSETS $383,098 $364,521 $342,065
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Interest-bearing demand deposits $67,548 $58,201 $69,612
Savings accounts 146,401 152,539 140,599
CD's - Over $100,000 37,258 24,498 26,853
Non-interest bearing deposits 92,076 95,719 74,168
------- ------- -------
Total Deposits 343,283 330,957 311,232
Other liabilities 2,813 2,627 2,555
------- ------- -------
Total Liabilities 346,096 333,584 313,787
Shareholders' Equity
Preferred stock 0 0 0
Common stock 2,129 2,129 2,129
Additional paid-in capital 2,241 2,252 2,210
Retained earnings 35,175 29,729 26,920
Allowance for unrealized
(losses)/gains 750 125 0
------- ------- -------
40,295 34,235 31,259
Less:Treasury stock 3,293 3,298 2,981
Total Shareholders' Equity 37,002 30,937 28,278
TOTAL LIAB. & ------- ------- -------
SHAREHOLDERS' EQUITY $383,098 $364,521 $342,065
<PAGE>
GUIDE 3
Schedule II
Item I(B) Analysis of Interest Earnings
For The Years Ended December 31
(In Thousands) 1995 1994 1993
Interest % Interest % Interest %
INTEREST EARNING ASSETS:
Interest bearing deposits $164 7.00% $77 5.00% $72 3.65%
Federal funds sold 943 5.85% 876 4.13% 968 2.99%
Investment securities
Taxable 5,720 6.46% 6,435 6.22% 6,477 6.51%
Tax-exempt 1,989 5.20% 2,218 5.25% 1,965 5.42%
Loans 19,396 9.33% 15,010 9.00% 13,754 9.61%
------- ----- ------- ----- ------- -----
Average Yield $28,212 7.99% $24,616 7.34% $23,236 7.42%
INTEREST BEARING LIABILITIES:
Interest on deposits:
Demand & time
deposits $2,837 4.20% $2,358 4.05% $3,168 4.55%
Savings 8,311 5.68% 7,018 4.60% 5,707 4.06%
CD's - $100,000 or more 1,966 5.28% 1,355 5.53% 1,481 5.52%
------ ----- ------ ----- ------ -----
Average Effective Rate Paid $13,114 5.22% $10,731 4.56% $10,356 4.37%
NET YIELD ON
INTEREST-EARNING ASSETS $15,098 4.22% $13,885 4.09% $12,880 4.06%
NOTES:
(1) Non-accrual loans are not included in the "Loans net of unearned
income" amount used in the yield computation.
(2) No out-of-period items included in the calculation of the changes
in interest income and interest expense.
(3) Loan fees are immaterial.
(4) Tax exempt income is not calculated on a tax equivalent basis.
<PAGE>
GUIDE 3
Schedule III
Item I(C)(1) Schedules of Interest Income & Expense Variance
For The Years Ended December 31
(In Thousands) 1995 1994
INTEREST VARIANCE INTEREST VARIANCE
INTEREST INCOME:
Interest-bearing deposits $164 $87 $77 $5
Federal funds sold 943 67 876 (92)
Investment securities
Taxable 5,720 (715) 6,435 (42)
Tax-exempt 1,989 (229) 2,218 253
Loans 19,396 4,386 15,010 1,256
------- ------ ------- ------
TOTAL INTEREST INCOME $28,212 $3,596 $24,616 $1,380
Item I(C)(2)
INTEREST EXPENSE:
Interest on deposits:
Demand & time deposits $2,837 $479 $2,358 $(810)
Savings 8,311 1,293 7,018 1,311
CD's - $100,000 or more 1,966 611 1,355 (126)
------- ------ ------- ------
TOTAL INTEREST EXPENSE $13,114 $2,383 $10,731 $ 375
<PAGE>
Schedule IV
Item I(C)(2)(a) and (b) Schedules of Volume Variance and Rate Variance
For The Years Ended December 31
(In Thousands) 1995 1994
VARIANCE
VOLUME RATE VOLUME RATE
(a) (b) (a) (b)
INTEREST INCOME:
Interest-bearing deposits $40 $31 $(16) $27
Federal funds sold (211) 366 (333) 367
Investment securities
Taxable (931) 103 261 (291)
Tax-exempt (210) 0 327 (64)
Loans 3,718 548 2,286 880
------ ------ ------ ------
TOTAL INTEREST INCOME $2,406 $1,048 $2,525 $(841)
INTEREST EXPENSE:
Interest on deposits:
Demand & time deposits $379 $86 $(519) $(348)
Savings (282) 1,641 485 762
CD's - $100,000 or more 706 (62) (130) 4
---- ------ ------- ----
TOTAL INTEREST EXPENSE $803 $1,665 $ (164) $418
<PAGE>
GUIDE 3
Schedule V
Item I(C)(2)(c) Schedules of Changes in Rate/Volume
December 31, 1995
(In Thousands) TOTAL VOLUME RATE RATES/VOL
VARIANCE VARIANCE VARIANCE VARIANCE
-------- -------- -------- --------
INTEREST INCOME:
Interest-bearing deposits $87 $40 $31 $16
Federal funds sold 67 (211) 366 (88)
Investment securities
Taxable (715) (931) 103 113
Tax-exempt (229) (210) 0 (19)
Loans 4,386 3,718 548 120
------ ------ ------ ----
TOTAL INTEREST INCOME $3,596 $2,406 $1,048 $142
INTEREST EXPENSE:
Interest on deposits:
Demand & time deposits $479 $379 $86 $14
Savings 1,293 (282) 1,641 (66)
CD's - $100,000 or more 611 706 (62) (33)
------ ---- ------ -----
TOTAL INTEREST EXPENSE $2,383 $803 $1,665 $(85)
December 31, 1994
(In Thousands) TOTAL VOLUME RATE RATES/VOL
VARIANCE VARIANCE VARIANCE VARIANCE
-------- -------- -------- --------
INTEREST INCOME:
Interest-bearing deposits $5 $(16) $27 $(6)
Federal funds sold (92) (333) 367 (126)
Investment securities
Taxable (42) 261 (291) (12)
Tax-exempt 253 327 (64) (10)
Loans 1,256 2,282 (880) (146)
------ ---- ------ -----
TOTAL INTEREST INCOME $1,380 $2,521 $(841) $(300)
INTEREST EXPENSE:
Interest on deposits:
Demand & time deposits $(810) $(519) $(348) $57
Savings 1,311 485 762 64
CD's - $100,000 or more (126) (130) 4 0
------ ---- ------ -----
TOTAL INTEREST EXPENSE $ 375 $(164) $418 $121
<PAGE>
GUIDE 3
Schedule VI
Item II(A) and (B) Investment Portfolio
December 31,
(In Thousands) 1995 1994 1993
Book Average Book Book
Value Yield Value Value
U.S. Treasury Securities:
Maturing within 1 year $0 $18,117 $13,729
Maturing between 1-5 years 24,527 6.7158% 27,560 32,982
Maturing between 6-10 years 0 1,991 9,879
TOTAL $24,527 47,668 56,590
U.S. Government Agencies:
Maturing within 1 year 4,013 6.1120% 0 2,000
Maturing between 1-5 years 8,995 5.8487% 14,529 11,074
Maturing between 6-10 years 18,946 7.0253% 6,484 4,512
TOTAL 31,954 21,013 17,586
State and Political Subdivisions:
Maturing within 1 year 4,785 6.2427% 10,727 10,948
Maturing between 1-5 yrs 16,420 5.5512% 14,460 13,209
Maturing between 6-10 yrs 12,021 6.0727% 16,154 17,349
Maturing over 10 years 73 6.8011% 72 72
TOTAL 33,299 41,413 41,578
Federal Reserve Stock 128 5.8600% 128 128
Other Securities:
Maturing within 1 year 6,013 7.0736% 1,999 8,248
Maturing between 1-5 years 15,917 6.2955% 19,266 18,907
Maturing between 6-10 years 1,075 6.0727% 6,572 7,616
TOTAL 23,005 27,837 34,771
Equity Securities
Maturing within 1 year
Maturing between 1-5 years
Maturing between 6-10 years
TOTAL 0 0 0
Total Before Allowance For
Unrealized Gains 112,913 138,059 150,653
Less: Allowance for
Unrealized Gains 1,407 85 0
TOTAL SECURITIES $114,320 $138,144 $150,653
Item II(C) Securities With One Issuer Exceeding Ten Percent of
Stockholders' Equity - NONE
<PAGE>
GUIDE 3
Schedule VII Analysis of Loans
Item III(A) - Types of Loans:
December 31
(In Thousands) 1995 1994 1993 1992 1991
Real estate loans:
1-4 Family Residential $52,673 $48,443 $46,175 $48,231 $47,220
Farmers 2,337 1,832 1,370 1,054 905
Other 28,695 31,161 49,310 33,538 31,126
Loans to farmers 1,148 1,601 3,069 1,032 1,250
Commercial and industrial
loans 83,672 74,165 26,179 41,630 45,558
Loans to individuals:
Credit cards 1,661 1,562 1,281 814 579
Other 53,121 35,645 27,406 21,013 23,469
Lease financing receivables 10,059 219 507 564 454
Total Loans 233,366 194,628 155,297 147,876 150,561
Less: Unearned income 1,253 2,110 3,955 6,282 8,039
Allowance for loan losses 2,413 2,146 2,135 1,888 1,288
Net Loans $229,700 $190,372 $149,207 $139,706 $141,234
Item III(B) - Maturities and Sensitivities of Loans to Changes in Interest
Rates at December 31, 1995:
(In Thousands)
Domestic: Total Loans Interest Rates
Predetermined Floating
Commercial, Financial and
Agricultural
Due in 1 year or less $23,005 $13,592 $9,413
Due after 1 year through 5 years 42,333 39,191 3,142
Due after 5 years 19,482 17,508 1,974
$84,820 $70,291 $14,529
Item III(C) - Risk Elements
1. Non-accrual, Past Due and Restructured Loans
December 31
1995 1994 1993 1992 1991
(1)(a)
Total non-accrual
loans $3,133,000 $2,298,000 $1,842,000 $2,080,000 $2,805,000
(1)(b)
Accruing loans past due
90 or more days $2,043,000 $1,116,000 786,000 $0 $0
(1)(c)
Troubled debt
restructuring $1,226,000 $1,147,000 $643,000 424,000 $0
(2)(I)
Interest income
that would have been
recorded on
non-accrual loans $144,000 $104,000 $166,000 $139,000 $276,000
(2)(ii)
Interest recorded on
non-accrual loans
included in net income
for the period $0 $15,000 $12,000 $4,000 $24,000
(3) Registrant's policy for placing loans on non-accrual status - See
Summary of Significant Accounting Policies under heading "Loans"
on Registrant's Consolidated Financial Statements for the year ended
December 31, 1995, included in Item 8 of Form 10-K.
2. Potential Problem Loans - None
Any loans classified for regulatory purposes as loss, doubtful,
substandard, or special mention that have not been disclosed under
Item III of Industry Guide 3 do not represent or result from trends
oruncertainties which Management reasonably expects will materially
impact future operating results, liquidity, or capital resources or
represent material credits about which Management is aware of any
information which causes Management to have serious doubts as to the
ability of such borrowers to comply with the loan repayment terms.
3. Foreign Outstanding Loans - None
4. Loan Concentrations - See Item III (A)
<PAGE>
GUIDE 3
Schedule VIII(a)
Item III (C)(1)
THE FARMERS AND MERCHANTS NATIONAL BANK OF BRIDGETON, NJ
CHARTER 9498 ANALYSIS OF REPRICING OPPORTUNITIES DECEMBER 31, 1995
REPRICING OPPORTUNITIES
FOR: 1 Day 3 Mo. 3-6 Mo. 6 Mo-One Yr. 1-5YRS
Total Loans and Leases $7,947 $13,592 $11,796 $8,257 $127,571
Debt Securities 0 3,024 1,464 10,353 65,183
Trading Account Assets 0 0 0 0 0
Other Interest-Bearing
Assets 27,800 0 0 0 0
Total Interest- ------- ------ ------ ------ -------
Bearing Assets 35,747 16,616 13,260 18,610 192,754
Loan and Lease Loss
Reserve 0 0 0 0 0
Non-Accrual Loans 0 0 0 0 0
All Other Assets
Including Cash 18,981 0 0 0 0
------- ------- ------- ------- --------
Total Assets $54,728 $16,616 $13,260 $18,610 $192,754
Deposits in Foreign Offices 0 0 0 0 0
CDs over $100,000 0 $12,376 $8,729 $9,829 $10,008
Other Time Deposits 0 35,516 16,770 22,560 25,257
MMDA Savings &
Unregulated NOW 13,554 8,987 17,830 40,370
Other Savings, ATS & Reg.
NOW** 0 5,520 5,520 5,520 27,599
Treasury Notes 0 0 0 0 0
Mortgages & Capitalized Leases 0 0 0 0 0
Other Nondeposit Interest
-Bearing Liabilities 0 0 0 0 0
------ ------ ------ ------ -------
Total Interest-
Bearing Liabilities $0 $66,966 $40,006 $55,739 $103,234
Demand Deposits 0 $28,416 0 0 $44,804
All Other Liabilities
------ ------ ------ ------ -------
Total Liabilities $0 $95,382 $40,006 $55,739 $148,038
Total Equity
(Excluding Limited Life
Pref.Stock)
Total Liabilities & Capital $0 $95,382 $40,006 $55,739 $148,038
Net Positions-Total Assets $54,728 $-78,766 $-26,746 $-37,129 $44,716
Less: Liabilities and
Capital
Cumulative Position Ratios 0.75 0.62 0.54 0.87
Total Assets 54,728 71,344 84,604 103,214 295,968
Total Liabilities & Capital 0 95,382 135,388 191,127 339,165
------ ------ ------ ------ -------
Total Assets Less
Liabilities & Capital $54,728 $-24,038 $-50,784 $-87,913 $-43,197
REPRICING OPPORTUNITIES
All Total
FOR: 5 Yrs+ Other Assets %
Total Loans and Leases $61,070 0 $230,233 56.95
Debt Securities 34,168 128 114,320 28.28
Trading Account Assets 0 0 0 0
Other Interest-Bearing
Assets 0 0 27,800 6.88
Total Interest- ------- ------ ------ ------
Bearing Assets 95,238 128 372,353 92.11
Loan and Lease Loss
Reserve 0 -2,413 -2,413 -0.60
Non-Accrual Loans 0 3,133 3,133 .78
All Other Assets
Including Cash 0 12,186 31,167 7.71
------- ------- ------- ------
Total Assets $95,238 $13,034 $404,240 100.00
Deposits in Foreign Offices 0 0 0 0
CDs over $100,000 0 0 $40,942 10.13
Other Time Deposits 0 0 100,103 24.76
MMDA Savings &
Unregulated NOW 9,132 0 89,873 22.23
Other Savings, ATS & Reg.
NOW** 11,040 0 55,199 13.66
Treasury Notes 0 0 0 0
Mortgages & Capitalized Leases 0 0 0 0
Other Nondeposit Interest
-Bearing Liabilities 0 0 0 0
------ ------ ------ ------
Total Interest-
Bearing Liabilities $20,172 $0 $286,117 70.78
Demand Deposits $4,096 0 $77,316 19.13
All Other Liabilities 0 4,164 4,164 1.03
------ ------ ------ ------
Total Liabilities $24,268 $4,164 $367,597 90.94
Total Equity
(Excluding Limited Life
Pref.Stock) 0 $36,643 $36,643 9.06
------- -------- -------- ----
Total Liabilities & Capital $24,268 $40,807 $404,240 100.00
Net Positions-Total Assets $70,970 $-27,773
Less: Liabilities and
Capital
Cumulative Position Ratios 1.08
Total Assets 391,206 404,240
Total Liabilities & Capital 363,433 404,240
------ ------ ------ ------
Total Assets Less
Liabilities & Capital $27,773 0
G A A P TABLE FOOTNOTES**
1.) These items are generally considered to be non-interest sensitive
due to their infrequent repricing characteristics.
2.) In addition to the rate sensitivity characteristics of assets and
supporting funds, sensitivity balances include assumptions for the
potential balance volatility of certain deposit categories.
Regular savings balances are generally considered to be non-interest
sensitive due to their infrequent repricing characteristics.
However, in order to account for possible internal transfers to other
deposit categories or the possibility of deposit disintermediation, a
measure of variation has been determined for certain non-interest
sensitive deposits. Consequently, an amount representing this measure
of variation for savings accounts has been treated as interest rate
sensitive within three months, six months and one year and the remainder
has been considered non-interest sensitive.
<PAGE>
GUIDE 3
Schedule VIII(a)
Item III (C)(1)
THE FARMERS AND MERCHANTS NATIONAL BANK OF BRIDGETON, NJ
CHARTER 9498 ANALYSIS OF REPRICING OPPORTUNITIES DECEMBER 31, 1994
REPRICING OPPORTUNITIES
FOR: 1 Day 3 Mo. 3-6 Mo. 6 Mo-One Yr. 1-5YRS
Total Loans and Leases $7,155 $12,925 $5,191 $10,264 $98,292
Debt Securities 0 5,842 8,040 18,958 73,163
Trading Account Assets 0 0 0 0 0
Other Interest-Bearing
Assets 11,250 0 0 0 0
Total Interest- ------- ------ ------ ------ -------
Bearing Assets 18,405 18,767 13,231 289,222 171,455
Loan and Lease Loss
Reserve 0 0 0 0 0
Non-Accrual Loans
All Other Assets
Including Cash 20,982 0 0 0 0
------- ------- ------- ------- --------
Total Assets $39,387 $18,767 $13,231 $29,222 $171,455
Deposits in Foreign Offices $0 0 0 0 0
CDs over $100,000 0 6,633 5,707 4,655 5,148
Other Time Deposits 0 34,419 14,459 13,375 24,371
MMDA Savings &
Unregulated NOW 0 44,458 17,611 17,611 0
Other Savings, ATS & Reg.
NOW** 0 5,049 5,049 5,049 0
Treasury Notes 0 0 0 0 0
Mortgages & Capitalized
Leases 0 0 0 0 0
Other Nondeposit Interest
-Bearing Liabilities
------ ------ ------ ------ -------
Total Interest-
Bearing Liabilities $0 $90,559 $42,826 $40,690 $29,519
Demand Deposits 0 0 0 0 0
All Other Liabilities 0 0 0 0 0
------ ------ ------ ------ -------
Total Liabilities $0 $90,559 $42,826 $40,690 $29,519
Total Equity
(Excluding Limited Life
Pref.Stock) 0 0 0 0 0
------ ------ ------ ------ -------
Total Liabilities & Capital $0 $90,559 $42,826 $40,690 $29,519
Net Positions-Total Assets $38,634 $-71,792 $-29,595 $-11,468 $141,936
Less: Liabilities and
Capital 0 0 0 0 0
Cumulative Position Ratios 0.63 0.53 0.57 1.33
Total Assets 38,634 57,401 70,632 99,854 217,309
Total Liabilities & Capital 0 90,559 133,385 174,075 203,594
------ ------ ------ ------ -------
Total Assets Less
Liabilities & Capital $38,634 $-33,158 $-62,753 $-74,221 $67,715
REPRICING OPPORTUNITIES
All Total
FOR: 5 Yrs+ Other Assets %
Total Loans and Leases $58,503 0 $191,330 51.58
Debt Securities 31,853 288 138,144 37.05
Trading Account Assets 0 0 0 0
Other Interest-Bearing
Assets 0 0 12,250 3.02
Total Interest- ------ ------ ------ ------
Bearing Assets 90,356 288 341,724 91.64
Loan and Lease Loss
Reserve 0 -2,146 -2,146 -0.58
Non-Accrual Loans 0 2,298 2,298 0.62
All Other Assets
Including Cash 0 10,038 31,020 8.32
------- ------- ------- ------
Total Assets $90,356 $10,478 $372,896 100.00
Deposits in Foreign Offices 0 0 0 0
CDs over $100,000 0 0 22,153 5.94
Other Time Deposits 0 0 86,624 23.23
MMDA Savings &
Unregulated NOW 0 0 79,680 21.37
Other Savings, ATS & Reg.
NOW** 0 45,446 60,593 16.25
Treasury Notes 0 0 0 0
Mortgages & Capitalized Leases 0 0 0 0
Other Nondeposit Interest
-Bearing Liabilities 0 0 0 0
------ ------ ------ ------
Total Interest-
Bearing Liabilities $0 $45,446 $249,040 66.79
Demand Deposits $0 $88,133 $88,183 23.65
All Other Liabilities 0 3,118 3,138 0.84
------ ------ ------ ------
Total Liabilities $0 $136,747 $340,341 91.27
Total Equity
(Excluding Limited Life
Pref.Stock) 0 $32,555 $32,555 8.73
------- -------- -------- ----
Total Liabilities & Capital $0 $169,302 $372,896 100.00
Net Positions-Total Assets $90,356 -158,071
Less: Liabilities and
Capital
Cumulative Position Ratios 1.78
Total Assets 361,655 372,499
Total Liabilities & Capital 203,594 372,499
------ ------ ------ ------
Total Assets Less
Liabilities & Capital $158,071 0
G A A P TABLE FOOTNOTES**
1.) These items are generally considered to be non-interest sensitive
due to their infrequent repricing characteristics.
2.) In addition to the rate sensitivity characteristics of assets and
supporting funds, sensitivity balances include assumptions for the
potential balance volatility of certain deposit categories.
Regular savings balances are generally considered to be non-interest
sensitive due to their infrequent repricing characteristics.
However, in order to account for possible internal transfers to other
deposit categories or the possibility of deposit disintermediation, a
measure of variation has been determined for certain non-interest
sensitive deposits. Consequently, an amount representing this measure
of variation for savings accounts has been treated as interest rate
sensitive within three months, six months and one year and the remainder
has been considered non-interest sensitive.
<PAGE>
GUIDE 3
Schedule VIII(a)
Item III (C)(1)
THE FARMERS AND MERCHANTS NATIONAL BANK OF BRIDGETON, NJ
CHARTER 9498 ANALYSIS OF REPRICING OPPORTUNITIES DECEMBER 31, 1993
REPRICING OPPORTUNITIES
FOR: 1 Day 3 Mo. 3-6 Mo. 6 Mo-One Yr. 1-5YRS
Total Loans and Leases $8,676 $7,928 $5,046 $7,181 $72,159
Debt Securities 0 4,379 11,797 18,749 76,172
Trading Account Assets 0 0 0 0 0
Other Interest-Bearing
Assets 29,800 0 0 0 0
Total Interest- ------ ------ ------ ------ -------
Bearing Assets 38,476 12,307 16,843 25,930 148,331
Loan and Lease Loss
Reserve 0 0 0 0 0
Non-Accrual Loans 0 0 0 0 0
All Other Assets
Including Cash 17,353 0 0 0 0
------- ------- ------- ------- --------
Total Assets $55,829 $12,307 $16,843 $25,930 $148,331
Deposits in Foreign Offices $0 0 0 0 0
CDs over $100,000 0 5,588 3,525 5,258 12,057
Other Time Deposits 0 33,908 14,616 12,293 25,268
MMDA Savings &
Unregulated NOW 0 83,152 0 0 0
Other Savings, ATS & Reg.
NOW** 0 4,883 4,883 4,883 0
Treasury Notes 0 0 0 0 0
Mortgages & Capitalized
Leases 0 0 0 0 0
Other Nondeposit Interest
-Bearing Liabilities 0 0 0 0 0
------ ------ ------ ------ -------
Total Interest-
Bearing Liabilities $0 127,531 $23,024 $22,434 $37,325
Demand Deposits 0 0 0 0 0
All Other Liabilities 0 0 0 0 0
------ ------ ------ ------ -------
Total Liabilities $0 127,531 $23,024 $22,434 $37,325
Total Equity
(Excluding Limited Life
Pref.Stock) 0 0 0 0 0
------ ------ ------ ------ -------
Total Liabilities & Capital $0 127,531 $23,024 $22,434 $37,325
Net Positions-Total Assets $55,829 -115,224 $-6,181 $3,496 $111,006
Less: Liabilities and
Capital 0 0 0 0 0
Cumulative Position Ratios 0.53 0.56 0.64 1.23
Total Assets 55,829 68,136 54,979 110,909 259,240
Total Liabilities & Capital 0 127,531 150,555 172,989 210,314
------ ------ ------ ------ -------
Total Assets Less
Liabilities & Capital $55,829 $-59,395 $-65,576 $-62,080 $48,926
REPRICING OPPORTUNITIES
All Total
FOR: 5 Yrs+ Other Assets %
Total Loans and Leases $52,465 0 $153,455 42.79
Debt Securities 39,428 128 150,653 42.01
Trading Account Assets 0 0 0 0
Other Interest-Bearing
Assets 0 0 29,800 8.30
Total Interest- ------ ------ ------ ------
Bearing Assets 91,893 128 333,908 93.10
Loan and Lease Loss
Reserve 0 -2,135 -2,135 -0.51
Non-Accrual Loans 0 2,298 2,298 0.62
All Other Assets
Including Cash 0 7,684 25,037 6.99
------- ------- ------- ------
Total Assets $91,893 $7,519 $358,652 100.00
Deposits in Foreign Offices 0 0 0 0
CDs over $100,000 0 0 26,428 7.34
Other Time Deposits 0 0 86,085 24.00
MMDA Savings &
Unregulated NOW 0 0 83,152 23.19
Other Savings, ATS & Reg.
NOW** 0 43,953 58,602 16.34
Treasury Notes 0 0 0 0
Mortgages & Capitalized Leases 0 0 0 0
Other Nondeposit Interest
-Bearing Liabilities 0 0 0 0
----- ------ ------ ------
Total Interest-
Bearing Liabilities $0 $43,953 $254,267 70.90
Demand Deposits $0 $72,994 $72,994 20.35
All Other Liabilities 0 2,365 2,365 0.66
------ ------ ------ ------
Total Liabilities $0 $119,312 $329,626 91.91
Total Equity
(Excluding Limited Life
Pref.Stock) 0 $29,026 $29,026 8.09
------- -------- -------- ----
Total Liabilities & Capital $0 $148,338 358,652 100.00
Net Positions-Total Assets $91,893 -140,819
Less: Liabilities and
Capital
Cumulative Position Ratios 1.67
Total Assets 351,133 358,652
Total Liabilities & Capital 210,314 358,652
------ ------ ------ ------
Total Assets Less
Liabilities & Capital $140,819 0
G A A P TABLE FOOTNOTES**
1.) These items are generally considered to be non-interest sensitive
due to their infrequent repricing characteristics.
2.) In addition to the rate sensitivity characteristics of assets and
supporting funds, sensitivity balances include assumptions for the
potential balance volatility of certain deposit categories.
Regular savings balances are generally considered to be non-interest
sensitive due to their infrequent repricing characteristics.
However, in order to account for possible internal transfers to other
deposit categories or the possibility of deposit disintermediation, a
measure of variation has been determined for certain non-interest
sensitive deposits. Consequently, an amount representing this measure
of variation for savings accounts has been treated as interest rate
sensitive within three months, six months and one year and the remainder
has been considered non-interest sensitive.
<PAGE>
GUIDE 3
Schedule VIII(a)
Item III (C)(1)
THE FARMERS AND MERCHANTS NATIONAL BANK OF BRIDGETON, NJ
CHARTER 9498 ANALYSIS OF REPRICING OPPORTUNITIES DECEMBER 31, 1992
REPRICING OPPORTUNITIES
FOR: 1 Day 3 Mo. 3-6 Mo. 6 Mo-One Yr. 1-5YRS
Total Loans and Leases $13,427 $7,397 $6,629 $6,629 $73,880
Debt Securities 5,159 6,875 11,373 10,210 63,827
Trading Account Assets 0 0 0 0 0
Other Interest-Bearing
Assets 37,100 0 0 0 0
Total Interest- ------ ------ ------ ------ -------
Bearing Assets 55,686 14,269 15,420 16,839 137,707
Loan and Lease Loss
Reserve 0 0 0 0 0
Non-Accrual Loans
All Other Assets
Including Cash 19,235 0 0 0 0
------- ------- ------ ------- --------
Total Assets $74,921 $14,269 $15,420 $16,839 $137,707
Deposits in Foreign Offices $0 0 0 0 0
CDs over $100,000 0 17,563 4,581 2,050 15,640
Other Time Deposits 0 37,557 16,555 10,514 20,354
MMDA Savings &
Unregulated NOW 0 64,550 0 0 0
Other Savings, ATS & Reg.
NOW** 0 0 0 0 0
Treasury Notes 0 0 0 0 0
Mortgages & Capitalized
Leases 0 0 0 0 0
Other Nondeposit Interest
-Bearing Liabilities
------ ------ ------ ------ -------
Total Interest-
Bearing Liabilities $0 119,670 $21,136 $12,564 $35,994
Demand Deposits 0 0 0 0 0
All Other Liabilities 0 0 0 0 0
------ ------ ------ ------ -------
Total Liabilities $0 119,670 $21,136 $12,564 $35,994
Total Equity
(Excluding Limited Life
Pref.Stock) 0 0 0 0 0
------ ------ ------ ------ -------
Total Liabilities & Capital $0 119,670 $21,136 $12,564 $35,994
Net Positions-Total Assets $74,921 -105,401 $-5,716 $4,275 $101,713
Less: Liabilities and
Capital 0 0 0 0 0
Cumulative Position Ratios 0.75 0.74 0.79 1.37
Total Assets 74,921 89,190 104,610 121,449 259,156
Total Liabilities & Capital 0 119,670 140,806 153,370 189,364
------ ------ ------ ------ -------
Total Assets Less
Liabilities & Capital $74,921 $-30,480 $-36,196 $-31,921 $69,792
REPRICING OPPORTUNITIES
All Total
FOR: 5 Yrs+ Other Assets %
Total Loans and Leases $40,329 0 $145,709 44.32
Debt Securities 23,827 128 121,396 39.92
Trading Account Assets 0 0 0 0
Other Interest-Bearing
Assets 0 0 37,100 11.28
Total Interest- ------ ------ ------ ------
Bearing Assets 64,156 128 304,205 92.53
Loan and Lease Loss
Reserve 0 -1,888 -1,888 -0.57
Non-Accrual Loans 0 2,080 2,080 0.63
All Other Assets
Including Cash 0 5,137 24,732 7.41
------ ------ ------- ------
Total Assets $64,156 $5,457 $328,769 100.00
Deposits in Foreign Offices 0 0 0 0
CDs over $100,000 0 0 39,834 12.12
Other Time Deposits 0 0 84,980 25.85
MMDA Savings &
Unregulated NOW 0 0 64,550 19.63
Other Savings, ATS & Reg.
NOW** 0 44,870 44,870 13.65
Treasury Notes 0 0 0 0
Mortgages & Capitalized Leases 0 0 0 0
Other Nondeposit Interest
-Bearing Liabilities 0 0 0 0
------ ------ ------ ------
Total Interest-
Bearing Liabilities $0 $44,870 $234,234 71.25
Demand Deposits $0 $66,909 $66,909 20.35
All Other Liabilities 0 1,637 1,637 0.50
------ ------ ------ ------
Total Liabilities $0 $113,416 $302,780 92.10
Total Equity
(Excluding Limited Life
Pref.Stock) 0 $25,989 $25,989 7.90
------- -------- -------- ----
Total Liabilities & Capital $0 $139,405 328,769 100.00
Net Positions-Total Assets $64,156 -133,948
Less: Liabilities and
Capital
Cumulative Position Ratios 1.71
Total Assets 323,312 328,769
Total Liabilities & Capital 189,364 328,769
------ ------ ------ ------
Total Assets Less
Liabilities & Capital $133,948 0
G A A P TABLE FOOTNOTES**
1.) These items are generally considered to be non-interest sensitive
due to their infrequent repricing characteristics.
2.) In addition to the rate sensitivity characteristics of assets and
supporting funds, sensitivity balances include assumptions for the
potential balance volatility of certain deposit categories.
Regular savings balances are generally considered to be non-interest
sensitive due to their infrequent repricing characteristics.
However, in order to account for possible internal transfers to other
deposit categories or the possibility of deposit disintermediation, a
measure of variation has been determined for certain non-interest
sensitive deposits. Consequently, an amount representing this measure
of variation for savings accounts has been treated as interest rate
sensitive within three months, six months and one year and the remainder
has been considered non-interest sensitive.
<PAGE>
GUIDE 3
Schedule VIII(a)
Item III (C)(1)
THE FARMERS AND MERCHANTS NATIONAL BANK OF BRIDGETON, NJ
CHARTER 9498 ANALYSIS OF REPRICING OPPORTUNITIES DECEMBER 31, 1991
REPRICING OPPORTUNITIES
FOR: 1 Day 3 Mo. 3-6 Mo. 6 Mo-One Yr. 1-5YRS
Total Loans and Leases $15,634 $14,439 $9,490 $17,477 $77,884
Debt Securities 15,041 1,060 5,425 3,488 46,200
Trading Account Assets 0 0 0 0 0
Other Interest-Bearing
Assets 17,700 0 0 0 0
Total Interest- ------ ------ ------ ------ -------
Bearing Assets 48,375 15,499 14,915 20,965 124,084
Loan and Lease Loss
Reserve 0 0 0 0 0
Non-Accrual Loans
All Other Assets 17,764 0 0 0 0
------- ------- ------ ------- --------
Total Assets $66,139 $15,499 $14,915 $20,965 $124,084
Deposits in Foreign Offices $0 0 0 0 0
CDs over $100,000 0 14,412 10,047 9,535 6,411
Other Time Deposits 0 35,956 17,850 12,269 12,663
MMDA Savings &
Unregulated NOW 0 65,204 0 0 0
Other Savings, ATS & Reg.
NOW** 0 0 0 0 0
Treasury Notes 0 0 0 0 0
Mortgages & Capitalized
Leases 0 0 0 0 0
Other Nondeposit Interest
-Bearing Liabilities
------ ------ ------ ------ -------
Total Interest-
Bearing Liabilities $0 115,572 $27,897 $21,804 $19,074
Demand Deposits 0 0 0 0 0
All Other Liabilities 0 0 0 0 0
------ ------ ------ ------ -------
Total Liabilities $0 115,572 $27,897 $21,804 $19,074
Total Equity
(Excluding Limited Life
Pref.Stock) 0 0 0 0 0
------ ------ ------ ------ -------
Total Liabilities & Capital $0 115,572 $27,895 $21,804 $19,074
Net Positions-Total Assets 66,139 -100,073 $-12,982 $-839 $105,010
Less: Liabilities and
Capital 0 0 0 0 0
Cumulative Position Ratios 0 0 0 0 0
Total Assets 66,139 81,638 96,553 117,518 241,602
Total Liabilities & Capital 0 115,572 143,469 165,273 184,347
------ ------ ------ ------ -------
Total Assets Less
Liabilities & Capital $66,139 $-33,934 $-46,916 $-47,755 $57,255
REPRICING OPPORTUNITIES
All Total
FOR: 5 Yrs+ Other Assets %
Total Loans and Leases $12,666 0 $147,590 51.31
Debt Securities 30,132 128 101,474 35.28
Trading Account Assets 0 0 0 0
Other Interest-Bearing
Assets 0 0 17,700 6.15
Total Interest- ------ ------ ------ ------
Bearing Assets 42,798 128 266,764 92.75
Loan and Lease Loss
Reserve 0 -1,288 -1,288 -0.45
Non-Accrual Loans 0 2,805 2,805 0.98
All Other Assets
Including Cash 0 1,585 19,349 6.73
------ ------ ------- ------
Total Assets $42,798 $3,230 $287,630 100.00
Deposits in Foreign Offices 0 0 0 0
CDs over $100,000 0 0 40,405 14.05
Other Time Deposits 0 0 78,738 27.37
MMDA Savings &
Unregulated NOW 0 0 65,204 22.67
Other Savings, ATS & Reg.
NOW** 0 23,543 23,543 8.19
Treasury Notes 0 0 0 0
Mortgages & Capitalized Leases 0 0 0 0
Other Nondeposit Interest
-Bearing Liabilities 0 0 0 0
------ ------ ------ ------
Total Interest-
Bearing Liabilities $0 $23,543 $207,890 72.28
Demand Deposits $0 $54,463 $54,463 18.94
All Other Liabilities 0 1,724 1,724 0.60
------ ------ ------ ------
Total Liabilities $0 $79,730 $264,077 91.81
Total Equity
(Excluding Limited Life
Pref.Stock) 0 $23,553 $23,553 8.19
------- -------- -------- ----
Total Liabilities & Capital $0 $103,283 $287,630 100.00
Net Positions-Total Assets $42,798 -100,053
Less: Liabilities and
Capital
Cumulative Position Ratios 0
Total Assets 284,400 287,630
Total Liabilities & Capital 184,347 287,630
------ ------ ------ ------
Total Assets Less
Liabilities & Capital $100,053 0
G A A P TABLE FOOTNOTES**
1.) These items are generally considered to be non-interest sensitive
due to their infrequent repricing characteristics.
2.) In addition to the rate sensitivity characteristics of assets and
supporting funds, sensitivity balances include assumptions for the
potential balance volatility of certain deposit categories.
Regular savings balances are generally considered to be non-interest
sensitive due to their infrequent repricing characteristics.
However, in order to account for possible internal transfers to other
deposit categories or the possibility of deposit disintermediation, a
measure of variation has been determined for certain non-interest
sensitive deposits. Consequently, an amount representing this measure
of variation for savings accounts has been treated as interest rate
sensitive within three months, six months and one year and the remainder
has been considered non-interest sensitive.
<PAGE>
GUIDE 3
Schedule IX
Item IV (A)(1)
SUMMARY OF LOAN LOSS EXPERIENCE
(In Thousands) For The Years Ended December 31,
1995 1994 1993 1992 1991
Balances at beginning of year $2,146 $2,135 $1,888 $1,288 $1,120
Loan charge-offs:
Mortgage loans 17 151 288 14 50
Installment loans 414 265 116 231 3
Commercial loans 638 383 296 413 525
Total charge-offs 1,069 799 700 658 728
Recoveries of loans previously
charged off:
Mortgage loans 2 2 33 0 0
Installment loans 51 49 62 52 54
Commercial loans 17 34 52 215 17
Total recoveries 70 85 147 267 71
NET CHARGE-OFFS 999 714 553 391 657
Allowance charged to operations ,266 725 800 991 825
Balances at end of year $2,413 $2,146 $2,135 $1,888 $1,288
Average loans outstanding
during year $211,398 $171,887 $149,842 $164,172 $172,110
Ratio of net charge-offs to
average loans outstanding
during the year 0.473% 0.415% 0.369% 0.238% 0.382%
Item IV(B) Allocation of Allowance for Loan Losses
The allowance for loan losses is maintained at a level considered by
Management to be adequate to provide for losses which may be incurred on
loans currently held based on a detailed evaluation of the loan portfolio,
historical experience, current economic trends and other factors relevant to
the collectibility of the loans in the portfolio. Credit risk, the risk
that a borrower will fail to perform to the loan agreement, is managed by
limiting the total amount of loans outstanding and by applying normal credit
policies to all lending activities. Collateral is obtained based on
Management's credit assessment of the customer. Loans are further subject
to interest rate risk and risk from geographic concentration of lending
activities. Interest rate risk is managed through various asset/liability
management techniques. Loan policies and administration are designed to
provide assurance that loans will only be granted to creditworthy borrowers,
although credit losses are expected to occur because of subjective factors
and factors beyond the control of the Bank. The Bank is mandated by the
Community Reinvestment Act and other regulations to conduct most of its
lending activities within the geographic area where it is located. As a
result, the Bank and its borrowers may be vulnerable to the consequences of
changes in the local economy. Anticipated amounts of loan charge-offs for
the fiscal year are estimated to be an amount equal to the current
fiscal year.
<PAGE>
GUIDE 3
Schedule X
Item V(A) - Average Deposits
December 31
(In Thousands) 1995 1994 1993
AVG. AMT. % AVG. AMT. % AVG. AMT. %
Non-interest bearing
demand deposits $92,076 0.0 $95,719 0.0 $74,168 0.0
Interest bearing
demand deposits 67,548 4.2 58,201 4.1 69,612 4.6
Savings accounts 146,401 5.7 152,539 4.6 140,599 4.1
CD's - Over $100,000 37,258 5.3 24,498 5.5 26,853 5.5
Total Average Deposits $343,283 5.2 $330,957 4.6 $311,232 4.4
Item V(D) - Deposits
Summary
(In Thousands) 1995
----
Demand deposits
Non-interest bearing $77,316
Interest bearing 89,873
(Money Market and N.O.W. Accounts)
Savings deposits 55,199
Time deposits 141,045
Total Deposits $363,433
The remaining maturity on certificates of deposit of $100,000 or
more is presented below:
(In Thousands) 1995
Maturity ----
3 months or less $12,376
3 months to 6 months 8,729
6 to 12 months 9,829
Over 12 months to 5 years 10,008
Over 5 years 0
-------
Total $40,942
<PAGE>
GUIDE 3
Schedule XI
Item VI - Return on Equity and Assets
December 31
1995 1994 1993
(1) Return on assets 1.27% 1.23% 1.19%
(2) Return on equity 13.11% 14.47% 14.38%
(3) Dividend payout ratio 22.57% 23.47% 24.46%
(4) Equity to assets ratio 9.66% 8.49% 8.27%
<PAGE>
Item 2. Properties
The following table sets forth the location and principal offices
of Registrant and its subsidiary.
Location Use
Bridgeton, New Jersey Executive Offices and Main Bank Office
Bridgeton, New Jersey Branch Office (West Broad Street)
Bridgeton, New Jersey Operations Center and Computer Facilities
*Upper Deerfield, New Jersey Branch Office (Carll's Corner)
Upper Deerfield, New Jersey Branch Office (Seabrook)
Fairton, New Jersey Branch Office
Penns Grove, New Jersey Branch Office
Pennsville, New Jersey Branch Office
Rosenhayn, New Jersey Branch Office
*Vineland, New Jersey Branch Office (Cumberland Mall)
*Millville, New Jersey Branch Office
Millville (Airport), New Jersey Branch Office
Wilmington, Delaware Administrative Office for F&M Investment
Company
*Salem City, New Jersey Branch Office
Washington Township, New Jersey Branch Office
Cedarville, New Jersey Branch Office
*Leased Property
Registrant owns substantially all properties used in its business
Branch office leases are less than $100,000 annually, and Management does
not foresee any material changes in terms or amounts of leased property or
the ability to renew applicable leases.
None of the owned principal properties are subject to any major
encumbrance material to the operations of Registrant.
All facilities are in good condition and are adequate and
suitable for Registrant's business. Management believes that the
capacity of the offices is such that no additional office space will
be needed in the foreseeable future for administration purposes.
In 1996, the Company will open a recently renovated building at the
Upper Deerfield (Carll's Corner) location replacing the existing branch.
Additional branch offices may be opened in the future when Management
deems it necessary for meeting customer needs, expansion and growth.
Item 3. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders of
Registrant during the fourth quarter of fiscal year 1995.
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters
Market Information for Common Stock.
Registrant's common stock is inactively traded on a local basis,
and the range of sales prices known to Management based on quotes
from the National Quotation Bureau and transactions noted in the
transfer and issuance of Registrant's common stock certificates,
for each quarter during the two most recent years are as follows:
<PAGE>
1995 1994
High Low High Low
First Quarter $31.50 $31.25 $27.50 $25.50
Second Quarter $31.50 $31.25 30.00 27.00
Third Quarter $33.50 $31.50 31.75 30.00
Fourth Quarter $37.00 $33.00 31.75 31.00
Holders
At March 14, 1996, there were 526 holders of record of
Registrant's common stock.
Dividends
Registrant declared cash dividends of $0.50 per share
payable to its common shareholders on June 30, 1995 and December 31,
1995, for a total of $1.00 per share or approximately $1,093,000.
Registrant declared cash dividends of $.48 per share payable
to its common shareholders on June 30, 1994 and December 31, 1994,
respectively, for a total of $.96 per share or approximately $1,054,000.
For restriction on dividends, see Note 7 to the consolidated
financial statements.
Item 6. Selected Financial Data
The following table presents selected financial data of the
Registrant. The historical data should be read in conjunction
with the consolidated financial statements and the related notes
thereon in Item 8 and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in Item 7.
(In Thousands Except Per Share Data)
1995 1994 1993 1992 1991
Operating Revenue $29,689 $26,199 $24,693 $24,650 $25,380
Operating Expense $23,137 $20,311 $19,215 $20,164 $21,476
Income Taxes $1,700 $1,411 $1,411 $935 $740
Net Income $4,852 $4,477 $4,067 3,551 $3,164
Earnings Per Common
Share $4.43 $4.09 $3.68 $3.18 $2.84
Cash Dividend Per
Share $1.00 $.96 $.90 $.80 $.75
Investment
Securities $114,320 $138,144 150,653 $121,446 $101,473
Loans - Net $229,700 $190,372 $149,207 $139,706 $141,234
Total Assets $404,240 $372,896 $358,652 $329,924 $288,383
Total Deposits $363,433 $337,223 $327,261 $301,143 $262,353
Stockholders' Equity $36,643 $32,555 $29,026 $26,554 $23,603
Book Value Per Share $33.78 $29.62 $26.49 $23.72 $21.15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OF THE COMPANY AND OF THE BANK
The following discussion and analysis presents the more significant
factors affecting the financial condition and results of operations of
the Company and the Bank for the years ended December 31, 1993, 1994, and
1995.
This discussion and analysis should be read in conjunction with the
financial statements, footnotes and other financial information appearing
elsewhere in this filing. All numbers have been rounded to the nearest
thousand. The term "Company" for all purposes includes the "Bank" which
is the Company's only subsidiary.
Financial Performance Overview
Return on assets ("ROA") and return on equity ("ROE"), are key
indicative profitability factors of the Company.
ROA for the Company was 1.27% in 1995, as compared to 1.23% in 1994,
and 1.19% in 1993. ROE for the Company was 13.11% in 1995, as compared
to 14.47% in 1994, and 14.38% in 1993. The increase in the 1995 ROA is
attributable to the increase in the Company's loan to deposit ratio as
more assets moved from lower interest earning investment securities to
higher interest earning loans. The current level of ROA is largely a
result of higher net interest income as well as a reduction in the FDIC
assessments and net investment security gains partly offset by the
increased administration costs and provision for loan losses in handling
a substantial increase in Total Loans and the Company's larger branch
network. The decrease in ROE in 1995 from 1994 was largely a result of
the Company's continued strong capital growth.
The steady increase in the Allowance for Loan Losses account
indicates that the Company has experienced an increase in the amount of
total loans, which are primarily secured by collateral, and made adequate
provisions thereto. The Allowance for Loan Losses increased by $267,000
or 12.44% in 1995, $11,000 or 0.52% in 1994, and $247,000 or 13.08% in
1993 from their respective preceding years. Net interest income after
provision for loan losses increased by $672,000 or 5.11% in 1995,
$1,080,000 or 8.94% in 1994, and $812,000 or 7.21% in 1993 and is further
detailed below. Total Non-Interest Income increased $435,000 or an
18.85% increase in 1995 as compared to 1994 and $52,000 or a 2.31%
increase in 1994 as compared to 1993. Total Non-Interest Expenses
increased $443,000 or 4.62% in 1995 as compared to 1994 and $722,000 or
8.15% in 1994 as compared to 1993 and is further detailed below.
Results of Operations
The Company had consolidated net income of $4,852,000 in 1995 and
$4,477,000 in 1994 as compared to consolidated net income of $4,067,000
for the year ended December 31, 1993.
<PAGE>
The 8.38% increase in net income in 1995 as compared to 1994 was
primarily a result of the increased net interest income resulting from
the movement of new deposits and maturing investments into a higher
yielding loan portfolio and the decrease in FDIC insurance premiums.
Additionally, the Bank realized a net gain on the sale of investment
securities. These factors were partially offset by the increased
administration costs and provision for loan losses attributable to
handling a larger loan base and an increased branch network.
The following is a comparison of the consolidated earnings per share
of Common Stock of the Company for the years ended December 31, 1995,
1994, and 1993.
Year ended December 31,
1995 1994 1993
Earnings Per Share $4.43 $4.09 $3.68
Management is not aware of any trends, events or uncertainties that
are reasonably likely to have a material effect on the liquidity, capital
resources or operations of the Company.
Loans
The Company had $233,366.00 in Total Loans at December 31, 1995,
$194,628,000 in Total Loans at December 31, 1994, and $155,297,000 in
Total Loans at December 31, 1993.
The majority of the Company's loans are made in Gloucester, Salem
and Cumberland Counties which constitute its primary service area.
Although the Company's business is concentrated in three counties, its
loan portfolio is diversified and well collateralized. The Company
grants agribusiness, commercial, residential, consumer loans, and lease
financing.
Standby letters of credit amounting to $3,061,000, $2,841,000, and
$1,632,000, were outstanding as of December 31, 1995, 1994 and 1993,
respectively. Loan commitments and unused lines of credit outstanding as
of December 31, 1995, 1994 and 1993 were $13,930,000, $12,526,000, and
$23,698,000, respectively.
During 1995, 3,142 new loans totaling $81,891,000 were booked which
includes refinancing of existing loans.
The increase in the amount of total loans over last year reflects an
increased demand for credit in the Company's market area despite a local
economy that continues to be weak and continued burdensome governmental
regulations which inhibit economic development. This increase appears to
be the result of pent-up loan demand taking advantage of more favorable
interest rates and emerging from a recessionary period. Loan growth,
however, exceeded deposit growth and hence the Company's
<PAGE>
decreased investment in securities at a lower rate of return and
increased placement of funds in higher yielding loans.
The Company's loan portfolio is distributed as follows: Real Estate
Mortgage Loans 35.87%, Agricultural and Commercial Loans 36.35%,
Installment and Consumer Credit 23.47%, Lease Loans 4.31%.
Interest Income
The interest income of the Company is composed of interest earned on
loans and credit cards and interest earned and dividends received on its
investment securities. The Company had consolidated interest income from
its loans and investment securities of $28,212,000, $24,616,000, and
$23,236,000 for the years ended December 31, 1995, 1994 and 1993,
respectively. The Company's interest income increased 14.61% in 1995
from 1994 and increased 5.94% in 1994 from 1993. The increase in interest
income in 1995 is mainly attributable to a $4,386,000 increase in
interest income earned on loans and leases as a result of the increase in
deposits and reinvestment of maturing securities being utilized for
lending purposes.
The Company's investment portfolio decreased by $23,824,000 or
17.25% in 1995 from 1994. Interest income on investment securities
decreased in the amount of $944,000 or 10.91% in 1995. This decrease in
interest income on investment securities was a result of a smaller
investment portfolio which produced smaller earnings. In 1994, the
Company's investment portfolio decreased by $12,509,000 or 8.30% over
1993, however, higher interest earning issues substantially contributed
to the 1993 increase in interest income of $211,000.
The moderate increase in total deposits in 1995 as compared to 1994,
along with a substantial increase in the demand for loans, resulted in a
large portion of the increased deposits and maturing investments being
placed in the Company's loan portfolio with the remainder placed in
federal funds sold.
This loan demand resulted from the economy of the Company's service
area emerging from a recessionary period and demonstrating improved
moderate growth.
Net Interest Income
"Net Interest Income", the difference between interest income and
interest expense, is a significant component of performance of a banking
organization. Net interest income was $15,098,000 for the year ended
December 31, 1995, an increase of $1,213,000 or 8.74% over 1994. Net
interest income was $13,885,000 for the year ended December 31, 1994, an
increase of $1,005,000 or 7.80% over the net interest income of
$12,880,000 for the year ended December 31, 1993.
<PAGE>
Management attributes the reasons for the increases in net interest
income in 1995 primarily to the substantial increase in the amount of
interest income on higher yielding loans and the moderate increase in the
amount of interest expense paid on total time deposits as a result of an
increase in the interest rates during 1995 and the repricing of the loans
at a more rapid rate than deposits.
Non-Interest Income
"Non-Interest Income" consists primarily of service fees on deposit
accounts, Trust Department income, commissions, collection fees, credit
card fees, and rental income from safe deposit boxes. The Company's non-
interest income was $2,743,000 for the year ended December 31, 1995. The
Company's non-interest income was $2,308,000 for the year ended December
31, 1994, and $2,256,000 for the year ended December 31, 1993. The
Company's non-interest income has remained relatively stable during the
three-year period ended December 31, 1995, except for the $360,000 gain
on the sale of securities enjoyed by the Company in 1995.
Non-Interest Expenses
"Non-Interest Expenses" consist of salaries and employee benefits,
occupancy, equipment, FDIC assessments and other miscellaneous expenses
such as stationery and supplies, professional fees, postage, advertising,
etc. The Company's non-interest expense was $10,023,000, $9,580,000, and
$8,858,000 for the years ended December 31, 1995, 1994, and 1993,
respectively. The 4.62% increase in non-interest expense in 1995 from
1994 was mainly a result of increases in payroll expense and occupancy
and equipment expenses. These expenses increased primarily as a result
of the costs to administer the increased loans and deposits realized by
the Company in 1995 from 1994 and the costs associated with expanding the
Company's branch facilities in 1995 and 1994. Also, the Office of the
Comptroller of the Currency Exam and FDIC assessments have decreased by
$333,000 or 41.32% from 1994 to 1995. Additionally, new branch banks at
Hurffville, Washington Township, New Jersey, and Cedarville, Lawrence
Township, New Jersey, were established and opened for business in 1995.
The opening of new branch locations results in a substantial
increase in initial costs such as building and personnel expense. These
costs will be recouped over time by future revenues generated by these
locations.
Income Tax Expense
Income tax expense was $289,000 higher in 1995 than 1994 due to an
increase in taxable income of $664,000 in 1995. Taxable income increased
in 1995 due to a substantial decrease in the FDIC insurance premiums paid
by the Company on its deposits and the realization of a net gain on the
sale of investment securities;
<PAGE>
however, this was partially offset by an increase in the provision for
loan losses attributable to handling a larger loan base. Income tax
expense for each of 1994 and 1993 was $1,411,000 even though income
before taxes was higher in 1994 than 1993. This result was primarily due
to the greater percentage of bad debt expense being deductible on the
1994 tax return. The increased amount of loans booked in 1994 permitted
the increase in the amount of bad debt expense that was deductible under
the applicable tax regulations.
During 1993, the Company adopted SFAS-109 which changed the method
of accounting for income taxes to a balance sheet approach which requires
recognition of certain deferred tax assets and liabilities meeting
specified criteria. The effect of the change in accounting principles as
a result of the adoption of SFAS-109 was immaterial for both balance
sheet and income statement purposes.
Deposit Accounts
"Total Deposit Accounts" is composed of demand (non-interest
bearing) deposits, Money Market accounts, Super NOW accounts, savings
accounts, jumbo ($100,000 and over) time accounts and other time
deposits. The Company had $363,433,000 in total deposits in 1995, an
increase of $26,210,000 or 7.77%, $337,223,000 in total deposits at year
end 1994, a $9,962,000 increase or 3.04% increase from the $327,261,000
total deposits at year end 1993. The increase in the total deposits in
1995 continued the trend started in 1992 of the Company, due to its
strong capital position, attracting new deposits resulting from financial
institutions being closed by bank regulatory agencies, the merger of
several large regional banks, and the opening of several new branches by
the Company, thereby expanding the Bank's market area. The bulk of these
transfers occurred in 1992 and 1993 with the remaining deposits moving
over in 1994 and 1995. The Company expects its total deposits to
continue to have strong growth in 1996.
Allowance for Loan and Lease Losses
The Company's allowance for loan and lease losses as a percentage of
gross total outstanding loans was 1.03% at December 31, 1995, 1.10% at
December 31, 1994, and 1.37% at December 31, 1993. Management estimates
the required allowance for possible loan loss and the provision thereto
on a monthly basis and any deficiency in the loan loss reserve account is
made up by charging current operating income. The decrease in the
percentage of allowance for loan and lease losses as a percentage of
gross total outstanding loans was a result of loan growth outpacing the
provision for loan and lease losses.
In determining the loan loss reserves required, management applies
such factors as a review of the loan portfolio, past loan loss
experience, current economic conditions, evaluation of borrower capacity
to repay based on financial statements, sources of cash flow, guarantees
and other similar information and current appraisals
<PAGE>
or internal evaluations of collateral. The methodology of the Allowance
for Loan and Lease Losses is reviewed annually by the Company's
independent auditors and its banking regulators.
The Company had $3,133,000 or 1.34% of total loans outstanding on a
non-accrual status on December 31, 1995, $2,298,000 or 1.18% of total
loans outstanding on non-accrual status on December 31, 1994, and
$1,842,000 or 1.19% of total loans outstanding on a non-accrual status on
December 31, 1993. Non-accrual loans are those loans from which, in
management's opinion, the collection of additional interest is
questionable.
The increase in the amount of loans on a non-accrual status is
attributable to the increase in the size of the total loan portfolio.
The percentage of the total loans on a non-accrual status has increased
as a result of the improving local economy.
During the year 1995, loans that were on non-accrual status totaling
$166,000 were paid off.
During 1995, 33 mortgage loans totaling $2,367,000 were in various
stages of foreclosure. Minimum loss is expected due to the
collateralization of these loans.
Loan charge-offs were $1,069,000 or 0.46% of total loans, $799,000
or 0.41% of total loans, and $700,000 or 0.45% of total loans,
respectively, for the years ended December 31, 1995, 1994 and 1993. The
increase from 1993 to 1995 in charge-offs was a result of the increased
size of the loan portfolio but charge-offs as a percentage of total loans
has increased only slightly, which reflects management's efforts to
maintain an adequately collateralized loan portfolio despite the weakness
in the local business climate with its concomitant adverse effect on
businesses and consumers.
Asset and Liability Management
The major objectives of the Company's asset and liability management
are to (1) manage exposure to changes in the interest rate environment to
achieve a neutral interest sensitivity position within reasonable ranges,
(2) ensure adequate liquidity and funding, (3) maintain a strong capital
base, and (4) maximize net interest income opportunities. The Company
manages these objectives centrally through Management's Asset and
Liability Committee. Members of the Committee meet monthly to develop
balance sheet pricing strategies affecting the future level of net
interest income, liquidity, and capital. Factors that are considered in
asset and liability management include forecasts of balance sheet mix,
the economic environment and anticipated direction of interest rates, and
the Company's earning sensitivity to changes in these rates.
Liquidity
The Company must maintain adequate liquidity, ensure the
availability of funds for loan growth, purchase of investment securities,
deposit withdrawals, and maturing liabilities. Cash and cash
equivalents, cash and due from banks, interest-bearing time deposits and
federal funds sold are the Company's most liquid assets.
<PAGE>
The Company had Federal Funds Sold of $27,800,000 for the year ended
December 31, 1995, $11,250,000 for the year ended December 31, 1994,
$29,800,000 for the year ended December 31, 1993. The increase in
Federal Funds Sold from 1995 to 1994 of 147% is mainly attributable to
the transfer of the funds realized from an increase in total deposits and
investment maturities to the Federal Funds Sold category to be used for
future liquidity.
The Company's investment securities portfolio, in addition to the
earnings it generates, supplies needed liquidity. As of December 31,
1995, the Company had $3,024,000 or 2.65% of the portfolio maturing in
three months or less, $11,817,000 or 10.34% maturing in over three months
and within one year, $65,183,000 or 57.01% maturing in over one year and
within five years and $34,296,000 or 30.00% maturing in over five years.
By maintaining adequate liquidity in its investment portfolio, the
Company has positioned itself to take advantage of changes in interest
rates and increased loan demand.
Additionally, 17.82% of the Company's loan portfolio has a maturity
date of one year or less. This permits the Company to utilize repricing
opportunities arising from changing interest rates. The remaining
portion of the loan portfolio includes a significant number of loans that
the Company is able to reprice in a time frame after the repricing of
deposits which does not materially adversely affect the Company's net
interest income margin.
Management believes that the Company's liquidity position is strong,
based on its high level of cash, cash equivalents, core deposits, the
stability of its other funding sources and the support provided by its
capital base.
Interest Rate Sensitivity
The Company analyzes its interest sensitivity position to manage the
risk associated with interest rate movements through the use of "gap
analysis" and "simulation". Interest rate risk arises from mismatches in
the repricing of assets and liabilities within a given time period. A
"negative" gap results when the amount of interest-sensitive liabilities
exceeds that of interest-sensitive assets.
While gap analysis is a general indicator of the potential effect
that changing interest rates may have on net interest income, the gap
itself does not present a complete picture of interest rate sensitivity.
The Company, therefore, also uses simulation techniques to project
future net interest income streams incorporating the current "gap"
position, the forecast balance sheet mix, and the anticipated spread
relationships between market rates and bank products under a variety of
interest rate scenarios. The Company's interest sensitivity in 1995 was
essentially liability sensitive within reasonable ranges.
<PAGE>
Capital Adequacy
The maintenance of appropriate levels of capital is a management
priority. Overall capital adequacy and dividend policy are monitored on
an ongoing basis by management and are reviewed monthly by the Company's
Board of Directors. Management discusses the Company's capital plans
with the Board of Directors on a frequent basis. The Company's principal
capital planning goals are to provide an attractive return to
stockholders while maintaining the capital levels of the Company above
the current well capitalized level and thus provide a sufficient base
from which to provide for future growth.
Total capital consisting of common stock, additional paid-in
capital, retained earnings and allowance for unrealized losses, less
treasury stock to total assets was 9.1%, 8.8%, and 8.1% as of December
31, 1995, 1994 and 1993, respectively. This ratio substantially exceeds
the minimum ratio required by the OCC, the Company's primary regulator.
The Company's Tier 1 and total risk based capital ratios
substantially exceeded the minimum ratios required by the OCC, the
Company's primary regulator, as demonstrated in the following chart:
Risk Weighted Capital Ratios
1995 1994 1993 Required
Tier 1 Capital Ratio 13.9 14.3 14.4 4.0
Total Capital Ratio 14.8 15.2 15.5 8.0
During 1995, the Company's Board of Directors authorized the
purchase by the Company of up to $2,000,000 of its own Common Stock for
the purpose of reissuance under the Company's stock option plans, as well
as to increase the amount of treasury shares held by the Company for
future use. As of December 31, 1995, 23,806 shares were purchased for
$800,000, an average of $33.60 per share.
Investment Securities
The Company's securities portfolio is comprised of U.S. government
and federal agency securities, the tax-exempt issues of states and
municipalities, and equity and other securities. The portfolios generate
substantial interest income and provide liquidity. In 1994 the Company
implemented FASB 115 in accounting for its security portfolio.
On January 1, 1994, Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities"
(SFAS No. 115) was adopted. This statement required the classification
of securities into one of three categories: trading, available for sale
or held to maturity. Investment securities available for sale are held
for an indefinite period of time and may be sold in response to changing
market and interest rate conditions as part of the asset/liability
<PAGE>
management strategy. Effective January 1, 1994, these securities are
reported at fair value with unrealized gains and losses, net of tax,
included as a separate component of shareholders' equity.
In anticipation of the January 1, 1994 adoption of SFAS No. 115, the
Company transferred $24,000,000 of U.S. Treasuries from the held-to-
maturity portfolio to the available-for-sale portfolio as of December 31,
1993. On November 17, 1995, the Bank transferred $6,500,000 out of its
held-to-maturity portfolio to its available-for-sale portfolio pursuant
to FASB 115 supplemental guidance. This enabled the Company to redeploy
these investments to provide more flexibility for their future use. At
December 31, 1995, these securities totaled $33,754,000 and the
available-for-sale portfolio had pre-tax unrealized gain of $1,407,000
which, when reduced by the deferred income tax of $478,380, results in a
net unrealized gain of $928,620. Additionally in 1995, the Company
realized a net gain of $360,000 on the sale of investment securities out
of the available-for-sale category.
Asset Quality
The Board of Directors grants lending authority to individual
officers and to loan committees. The Chairman of the Board is empowered
to appoint members to the various loan committees. There are two
committees appointed annually by the Chairman as follows: 1) The
Management Loan Committee. The Chairman of this committee is the
President or, in his absence, one of the Executive Vice Presidents of the
Company. This Committee meets weekly, approves or rejects loans up to
$2,500,000, and recommends loans to the Directors' Loan Committee or the
Board of Directors for loan requests over that amount; 2) The Directors
Loan Committee. This committee is comprised of four outside board
members, one of whom is appointed Chairman and, for loan approval or
rejection purposes, is joined by two members (Senior Vice President or
higher) of the Management Loan Committee. In addition to approving loans
over $2,500,000 and up to $4,000,000 or recommending or passing loans to
the full Board of Directors, the following are also functions of the
Directors Loans Committee: a) to review and recommend loan policies to
the Board of Directors; b) to review allowance for loan and lease losses;
c) to review charge-offs, delinquent loans and action plans; d) to review
other loan reports as submitted by management; e) to recommend guidelines
for management pertaining to market and economic conditions.
All authority to make loans is delegated by the Board of Directors
to specific officers. Therefore, the Board must annually pass a
resolution granting authority to various officers in various dollar
amounts. Generally speaking, the Company's philosophy is to serve
customers through relatively high lending authority to Committees of
senior officers or Board members but to limit individual authority.
Individual lenders may only combine their own authority with that of an
Executive Vice President or the President. When approving a loan, the
total borrowings at the Company, when combined with the new loan request,
must be within the lending authority of the approving officer or
committees. Individual limits of lending authority are up to $500,000
secured and $200,000 unsecured.
<PAGE>
The Company's independent loan review function is also an integral
part of its overall loan administration. The loan review department is
responsible for the evaluation of credit extensions with respect to
quality, documentation and risk criteria. This department's direct
reporting line to the Loan Committee of the Company's Board of Directors
is intended to maintain its independence and to provide assurance that
troubled situations will be identified and proper procedures followed to
establish corrective measures. The loan review and risk rating systems
are designed to provide the Company with an early warning mechanism to
detect loans to customers with deteriorating financial conditions or
loans that may represent potentially troubled situations.
In addition, the Company's internal audit department reviews loan
documentation and collateral as part of its regular audit procedures.
The Company's Other Real Estate Owned portfolio of foreclosed
properties was reduced from $1,094,000 in 1994 to $946,000 in 1995 or
13.53%. This reduction was a result of management's efforts to sell
these properties in a more favorable real estate market.
Regulatory Matters
The Company is not aware of any current recommendations by the
regulatory authorities which, if they were to be implemented, would have
a material effect on the liquidity, capital resources, or operation of
the Company.
<PAGE>
Item 8. Financial Statements and Supplementary Data.
SOUTHERN JERSEY BANCORP OF DELAWARE, INC.
Index to Consolidated Financial Statements
Page
Independent Auditor's Report 34
Consolidated Balance Sheets 35
Consolidated Statements of Operations 36
Consolidated Statements of Shareholders'
Equity 37
Consolidated Statements of Cash Flow 38
Notes to Consolidated Financial Statements 39-52
Independent Auditor's Report
- F&M Investment Company 53
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To The Stockholders and Board of Directors
Southern Jersey Bancorp of Delaware, Inc.
Bridgeton, New Jersey 08302
We have audited the consolidated balance sheets of Southern
Jersey Bancorp of Delaware, Inc., and its subsidiaries as of
December 31, 1995 and 1994, and the related consolidated statements
of operations, shareholders' equity, and cash flows for each of the
years in the three year period ended December 31, 1995. These
financial statements are the responsibility of the Company's manage-
ment. Our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the
financial statements of F&M Investment Company, a consolidated
subsidiary whose statements reflect total assets of 28% and 35% as
of December 31, 1995 and 1994, respectively, and total interest
income revenues of 25%, 31% and 37% for each of the years in the
three year period ended December 31, 1995, of the related consoli-
dated totals. Those statements were audited by other auditors
whose reports have been furnished to us, and our opinion, insofar
as it relates to the amounts included for the F&M Investment
Company, is based solely upon the reports of the other auditors.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and per-
form the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and
the reports of other auditors provide a reasonable basis for our
opinion.
In our opinion, based upon our audits and the reports of other
auditors, the consolidated financial statements referred to above
present fairly in all material respects the consolidated financial
position of Southern Jersey Bancorp of Delaware, Inc., and subsi-
diaries at December 31, 1995 and 1994, and the consolidated results
of their operations and cash flows for each of the years in the
three year period ended December 31, 1995, in conformity with
generally accepted accounting principles.
s/ WILLIAM THOS. ATHEY & COMPANY
-----------------------------
January 19, 1996
Bridgeton, New Jersey
<PAGE>
Southern Jersey Bancorp of Delaware, Inc. And Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Data)
December 31
1995 1994
ASSETS
Cash and due from banks (Note 2) $18,981 $17,982
Federal funds sold 27,800 11,250
Cash and Cash Equivalents 46,781 29,232
Interest-bearing deposits
in other banks 0 3,000
Investment securities
Available for sale (Note 3) 33,754 20,416
Held to maturity
(Market value: 1995-$81,486
1994-$113,754) (Note 3) 80,566 117,728
Loans (Notes 1, 4 and 5) 233,366 194,628
Less: Allowance for loan losses 2,413 2,146
Unearned income 1,253 2,110
Net Loans 229,700 190,372
Bank premises and equipment
- net (Notes 1 and 6) 5,916 5,308
Other assets 7,523 6,840
TOTAL ASSETS $404,240 $372,896
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits Interest bearing deposits $286,117 $249,040
Non-interest bearing deposits 77,316 88,183
Total Deposits 363,433 337,223
Other liabilities 4,164 3,118
Total Liabilities 367,597 340,341
Shareholders' Equity (Note 7)
Preferred stock, no par value;
shares authorized - 500,000;
no shares issued Common stock,
par value $1.67 per share; shares
authorized - 5,000,000; shares
issued - 1,275,000 2,129 2,129
Additional paid-in-capital 2,223 2,258
Retained earnings 35,103 31,344
Unrealized gains on
securities (Note 1) 929 56
40,384 35,787
Less: Treasury stock at
cost - 190,193 shares in 1995 and
175,767 shares in 1994 3,741 3,232
Total Shareholders' Equity 36,643 32,555
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $404,240 $372,896
<PAGE>
Southern Jersey Bancorp of Delaware, Inc. And Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
Year Ended December 31
1995 1994 1993
INTEREST INCOME:
Investment securities:
Taxable $5,720 $6,435 $6,477
Tax-Exempt 1,989 2,218 1,965
Loans and leases (Note 1) 19,396 15,010 13,754
Interest-bearing deposits
With depository
institutions 164 77 72
Federal funds sold 943 876 968
TOTAL INTEREST INCOME 28,212 24,616 23,236
INTEREST EXPENSE:
Deposits 13,114 10,731 10,356
NET INTEREST INCOME 15,098 13,885 12,880
PROVISION FOR LOAN LOSSES
(NOTES 1 AND 5) 1,266 725 800
NET INTEREST INCOME AFTER
PROVISION
FOR LOAN LOSSES 13,832 13,160 12,080
OTHER INCOME:
Service fees 1,428 1,258 1,240
Trust department income 652 620 591
Other 303 430 355
Net investment security
gains(Notes 1 and 3) 360 0 70
TOTAL OTHER INCOME 2,743 2,308 2,256
OTHER EXPENSES:
Salaries and wages 4,388 4,164 3,781
Employee benefits
(Notes 1, 8 and 9) 1,321 1,070 934
Occupancy and equipment
expenses 1,704 1,593 1,465
OCC Exam and FDIC
assessments 473 806 745
Postage, stationary
and supplies 422 332 389
Professional fees 478 337 350
Other operating expenses 1,237 1,278 1,194
TOTAL OTHER EXPENSES 10,023 9,580 8,858
INCOME BEFORE INCOME TAXES 6,552 5,888 5,478
PROVISION FOR INCOME TAXES
(NOTE 10) 1,700 1,411 1,411
NET INCOME $4,852 $4,477 $4,067
EARNINGS PER COMMON SHARE
(NOTE 1) $4.43 $4.09 $3.68
<PAGE>
Southern Jersey Bancorp of Delaware, Inc. And Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For The Three Years Ended December 31, 1995
(In Thousands, Except Share and Per Share Data)
Additional
Common Paid-in Retained Treasury Urelized
Stock Capital Earning Stock Gain/Loss Total
Balances at
January 1, 1993 $2,129 $2,214 $24,851 $(2,640) $0 $26,554
Year Ended
December 31, 1993
Net Income 4,067 4,067
Cash Dividends
($.90 per share) (997) (997)
Addition of 29,720
shares to The
Treasury (713) (713)
Issuance of 6,009
sharesfrom The
Treasury 46 69 115
Balances at ----- ----- ------ ------- - ------
December 31, 1993 2,129 2,260 27,921 (3,284) 0 29,026
Year Ended
December 31, 1994
Net Income 4,477 4,477
Increase in
Unrealized Gains
on Securities 56 56
Cash Dividends
($.96 per share) (1,054) (1,054)
Addition of 5,970
shares to
The Treasury (2) (154) (156)
Issuance of
9,304 shares from
The Treasury 206 206
Balances at ----- ----- ------ ------- -- ------
December 31, 1994 2,129 2,258 31,344 (3,232) 56 32,555
Year Ended
December 31, 1995
Net Income 4,852 4,852
Increase in
Unrealized Gains
on Securities 873 873
Cash Dividends
($1.00 per share) (1,093) (1,093)
Addition of
23,806 shares to
The Treasury (35) (765) (800)
Issuance of
9,380 shares from
The Treasury 256 256
BALANCES AT ------ ------ ------- -------- --- -------
DECEMBER 31, 1995 $2,129 $2,223 $35,103 $(3,741) 929 $36,643
<PAGE>
Southern Jersey Bancorp of Delaware, Inc. And Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Year Ended December 31
1995 1994 1993
Cash flows from operating activities
Net income $4,852 $4,477 $4,067
Adjustments to reconcile net
income to net cash provided
by operating activities:
Amortization of organization expenses 0 16 32
Depreciation of premises and equipment 401 380 374
Provision for loan losses 1,266 725 800
Premium amortization net of discount
accretion 264 68 37
Gains on sales of securities (360) 0 (70)
Gain on sale of bank premises
and equipment 0 0 (68)
Increase in other assets (683) (214) (452)
Increase in other liabilities 1,046 753 138
Net cash provided by operating activities 6,786 6,205 4,858
Cash flows from investing activities
(Increase)/Decrease in interest
bearing deposits in other banks 3,000 (1,000) 2,000
Purchase of investment securities (29,561) (25,149) (82,620)
Proceeds from sales of investment
securities 19,426 502 5,243
Proceeds from maturities of
investment securities 34,642 36,281 48,171
Net increase in loans (40,594) 41,890) (10,301)
Purchase bank premises and equipment (1,035) (689) (483)
Proceeds from sale of bank premises
and equipment 0 0 173
Proceeds from sale of other real
estate 312 861 698
Net cash used for investing activities (13,810) (31,084) (37,119)
Cash flows from financing activities
Net increase in deposits 26,210 9,962 26,118
Cash dividends (1,093) (1,054) (997)
Purchase of Treasury stock (800) (156) (713)
Sale of Treasury stock 256 206 115
Net cash provided by financing activities 24,573 8,958 24,523
Net increase/(decrease) in cash and cash
equivalents 17,549 (15,921) (7,738)
Cash and cash equivalents at beginning
of year 29,232 45,153 52,891
Cash and cash equivalents at end of year $46,781 $29,232 $45,153
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $12,493 $10,612 $10,453
Income Taxes 1,172 1,478 1,326
Other non-cash activities:
Transfer of loans, net of charge-offs
to other real estate owned 164 233 1,208
Unrealized gain on investment securities
available for sale 873 56 0
<PAGE>
Southern Jersey Bancorp of Delaware, Inc. And Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by Southern Jersey
Bancorp of Delaware, Inc. and subsidiaries, and the methods of
applying those policies conform to generally accepted accounting
principles and to general practice within the banking industry. A
summary of these policies is as follows:
Principles of Consolidation:
The consolidated financial statements include the accounts of
Southern Jersey Bancorp of Delaware, Inc. (Company), and its wholly-
owned subsidiary bank, The Farmers and Merchants National Bank of
Bridgeton (Bank), and the Bank's wholly-owned subsidiary, F&M
Investment Company. All significant intercompany balances and
transactions have been eliminated.
Cash and Cash Equivalents:
Cash and cash equivalents include cash on hand, amounts due from
banks, and Federal Funds sold. Generally, Federal Funds are
purchased or sold for one-day periods.
Investment Securities:
Effective January 1, 1994, the Company adopted Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities"
(FAS 115) for investments held as of or acquired after that date.
The effect of this accounting change is not material.
Investment securities are classified as held to maturity when the
Company has the intent and ability to hold those debt securities to
maturity. Debt securities held to maturity are stated at cost and
adjusted for accretion of discounts and amortization of premiums.
Those securities that might be sold in response to changes in market
interest rates, prepayment risk, the Company's income tax position,
the need to increase regulatory capital, or similar other factors
are classified as available for sale. Available for sale securities
are carried at fair value, with unrealized gains and losses, net of
tax, reported as a component of stockholders' equity. Realized
gains and losses are determined on the specific certificate method
and are included in non-interest income.
Management has not classified any investment securities as trading
securities, as the Company has not historically nor anticipates
buying investment securities and holding them principally for the
purpose of selling them in the near term with the objective of
generating profits on short-term differences in price.
Loans:
Loans are reported at the principal amount outstanding, net of
unearned income and the allowance for loan losses. The interest
method is used to amortize unearned income on installment loans.
Interest on all other loans is recognized based on the principal
amount outstanding. Recognition of interest on
<PAGE>
the accrual method is generally discontinued when interest or
principal payments are ninety days or more in arrears or when other
factors indicate the collection of such payments is doubtful. Once
placed on non-accrual status, the loan is not returned to accrual
status until interest is received on a current basis and the other
factors indicating doubtful collection cease to exist.
Allowance for Loan Losses:
The allowance for loan losses is maintained at a level considered by
Management to be adequate to provide for losses which may be
incurred on loans currently held based on a detailed evaluation of
the loan portfolio, historical experience, industry experience,
current economic trends and other factors relevant to the
collectibility of the loans currently in the portfolio. The
allowance is increased by provisions charged to operating expense
and reduced by charge-offs.
Other Real Estate:
Other real estate comprises properties acquired through a
foreclosure proceeding or acceptance of a deed in lieu of
foreclosure. These properties are carried at the lower of the loan
balance or fair market value based on appraisals. Write-downs
arising from foreclosure transactions, if any, are charged against
the allowance for loan losses. The balances of $946,000 and
$1,094,000 at December 31, 1995 and 1994, respectively, are included
in other assets in the consolidated balance sheets.
Expenses related to holding the property are charged against
earnings in the current period.
Bank Premises and Equipment:
Land, bank premises, equipment and leasehold improvements are
recorded at cost. Depreciation is based on the estimated useful
lives of the assets or the term of the lease whichever is less,
using the straight-line and declining-balance methods.
Major improvements are charged to asset accounts. Maintenance and
repairs which do not extend the life of assets are charged to
current operating expenses.
Leased property under capital lease is recorded at the present value
of the minimum lease payments and is being amortized using the
straight-line method over the term of the lease.
Employee Benefit Plans:
The Bank has two retirement plans. One is a non-contributory
defined benefit pension plan which covers substantially all salaried
employees. Benefits under this plan are based on the employees'
highest consecutive five years' compensation in the last ten years
prior to retirement. The Bank's general funding policy is to
contribute amounts when deductible for federal income tax purposes.
The other retirement plan, effective January 1, 1995, is a profit
sharing retirement plan under which eligible employees may defer a
portion of their annual compensation, pursuant to Section 401(K) of
the Internal Revenue Code. (See Note 8)
<PAGE>
Under Farmers and Merchants National Bank of Bridgeton, New Jersey
Flexible Benefits/Health Plan, employees are provided comprehensive
health care coverage. Contributions to the Plan are made by
participant salary reduction agreements.
The Plan includes coverage by both the Bank and the Plan's
underwriter. Premiums due the underwriter are accrued and paid
monthly. Bank's self-funded liability is also accrued monthly based
on amounts provided by the Plan's administrator. (See Note 12)
Income Taxes:
The Company and its subsidiaries file a consolidated federal income
tax return. State income taxes are filed on a separate basis.
Certain income and expense items are accounted for in different
years for financial reporting purposes than for income tax purposes.
Deferred taxes are provided to recognize these temporary
differences. (See Note 10)
Earnings Per Common Share:
Earnings per common share is computed based upon the weighted
average number of common and dilutive common equivalent shares
outstanding during the period. Fully diluted and primary earnings
per common share are the same amounts for each of the periods
presented. Common equivalent shares consist of stock options
(calculated using the treasury stock method). Common equivalent
shares are excluded as the effect would not be dilutive. Shares
used in computing net income per share are 1,094,802 in 1995,
1,095,796 in 1994, and 1,105,608 in 1993.
NOTE 2 - CASH AND DUE FROM BANKS
The Company maintains various deposits in other banks. The
withdrawal or usage restrictions on these balances do not have a
significant impact on the consolidated operations of the Company.
Aggregate reserves of $9,418,000 and $10,374,000 were maintained at
the Federal Reserve Bank of Philadelphia as of December 31, 1995 and
1994, respectively, to satisfy federal regulatory requirements.
NOTE 3 - INVESTMENT SECURITIES
A summary of the amortized cost and market value of investment
securities available for sale and securities held to maturity (in
thousands) at December 31, 1995 and 1994 follows:
<PAGE>
AC=AMORTIZED COST
GUG=GROSS UNREALIZED GAIN
GUL=GROSS UREALIZED LOST
MV=MARKET VALUE
December 31,
1995 1994
AC GUG GUL MV AC GUG GUL MV
U.S. Treasury
securities $10,916 $1,060 $0 $11,976 $14,875 $206 $(82) $14,999
U.S. governmental
agencies 21,431 347 0 21,778 5,455 0 (38) 5,417
Securities Avail.
for Sale $32,347 $1,407 $0 $33,754 $20,330 $206 $(120) $20,416
U.S. Treasury
securities $13,610 $26 (10) $13,626 $32,792 $21 $(1,197) $ 31,616
U.S. governmental
agencies 10,523 22 (94) 10,451 15,558 33 (801) 14,790
Obligations of
states and poli-
tical sub-
divisions 33,299 760 (46) 34,013 41,413 370 (1,046) 40,737
Other securities 23,134 300 (38) 23,396 27,965 57 (1,411) 26,611
Securities held
to maturity $ 80,566 $1,108 (188) $81,486 $117,728 $481 $(4,455) $113,754
The amortized cost and estimated market value of investment
securities (in thousands) at December 31, 1995, by contractual
maturity are shown below. Expected maturities will differ from
contractual maturities because obligors have the right to repay
obligations without prepayment penalties.
Available for Sale Held to Maturity
Amortized Market Amortized Market
Cost Value Cost Value
Due in one year or less $1,000 $1,030 $13,811 $13,936
Due after one year through five years 14,411 15,503 49,681 50,331
Due after five years through ten
years 16,936 17,221 16,873 17,006
Due after ten years 0 0 201 213
------- ------- ------- -------
$32,347 $33,754 $80,566 $81,486
Proceeds from sales and maturities of debt securities classified as
available for sale during 1995 were $37,084,000. Gross gains of
$271,000 and gross losses of $28,000 were realized on the sales in
1995. There were no sales of securities classified as available for
sale during 1994 and 1993. Proceeds from sales and maturities of
securities classified as held to maturity during 1995 were
$16,984,000. Gross gains of $117,000 and no gross losses were
realized on the sales in 1995. No gross gains or losses were
realized on the sales in 1994. Gross gains of $70,000 and no gross
losses were realized on the sales in 1993.
Investment securities with a market value of $18,899,000 and
$19,432,000 and a carrying value of $18,250,000 and $19,550,000 were
pledged at December 31, 1995 and 1994, respectively, to secure
public funds, customer deposits, and for other purposes required by
law.
NOTE 4 - LOANS
The loan portfolio is as follows: (In Thousands)
December 31
1995 1994
Commercial and agriculture $84,820 $91,414
Real estate mortgages 83,705 61,241
Installment and consumer credit 54,782 41,622
Lease financing 10,059 351
Total $233,366 $194,628
<PAGE>
Loans have been made to directors, principal officers, principal
shareholders, and their related interests in the ordinary course of
business. All loans and commitments to loans in such transactions
were made on substantially the same terms, including collateral and
interest rates as those prevailing at the time for comparable
transactions with unrelated persons. In the opinion of Management,
these transactions do not involve more than normal risk of
collectibility nor present other unfavorable features. It is
anticipated that such further extension of credit will be made in
the future.
As of December 31, 1995 and 1994, such loans aggregated $4,663,000
and
$4,062,000, respectively. Activity with said parties during 1995
included principal repayments of $1,184,000 and new loans of
$1,785,000.
Loans that are guaranteed by said parties for which they are
contingently liable as of December 31, 1995 and 1994 was $119,000
and $1,233,000, respectively.
NOTE 5 - ALLOWANCE FOR LOAN LOSSES
The changes in the allowance for loan losses are as follows:
(In Thousands) December 31
1995 1994 1993
Balances at beginning of year $2,146 $2,135 $1,888
Provision charged to operations 1,266 725 800
Recoveries of loans previously
charged off:
Mortgage loans 2 2 33
Installment loans 51 49 62
Commercial loans 17 34 52
Total recoveries 70 85 147
Loan charge offs:
Mortgage loans (17) (151) (288)
Installment loans (414) (265) (116)
Commercial loans (638) (383) (296)
Total charge offs (1,069) (799) (700)
BALANCES AT END OF YEAR $2,413 $2,146 $2,135
NOTE 6 - BANK PREMISES AND EQUIPMENT
A summary of bank premises and equipment as of December 31, 1995 and
1994, is as follows:
(In Thousands) Estimated December 31
Years 995 1994
Land $565 $472
Buildings and improvements 10-80 years 4,378 3,893
Leasehold improvements 5-31 years 1,025 1,016
Furniture, fixtures and equipment 5-10 years 4,674 4,237
Leased equipment under capital
lease 7 years 324 324
------ -----
10,966 9,942
Less:
Accumulated depreciation and
amortization 5,050 4,634
Net Bank Premises and Equipment $5,916 $5,308
Depreciation charged to operating expenses amounted to $401,000 in
1995, $380,000 in 1994 and $374,000 in 1993.
<PAGE>
NOTE 7 - SHAREHOLDERS' EQUITY
Common Stock:
The Company has 5,000,000 shares of $1.67 par value common stock
authorized with 1,275,000 shares issued and 1,084,807 shares
outstanding at December 31, 1995, and 1,275,000 shares issued and
1,099,233 shares outstanding at December 31, 1994. Treasury stock
totaled 190,193 shares and 175,767 shares at December 31, 1995 and
1994, respectively, and is accounted for under the cost method.
Preferred Stock:
The Company has 500,000 shares of no par value preferred stock
authorized, of which none are issued or outstanding.
Stock Rights:
Pursuant to a shareholder rights plan adopted by the Company on
November 30, 1989, the Company distributed common stock purchase
rights to the shareholders of record on November 30, 1989. Each
Right entitles the registered holder thereof to purchase from the
Company following the Distribution Date, one one-hundredth of a
share of Series A Preferred Stock, no par value, at a Purchase Price
of $70.00 per one one-hundredth share, subject to adjustment, or,
upon the occurrence of certain events, Common Stock of the Company
or common stock of an entity that acquires the Company.
A Distribution Date will occur upon the earlier of 10 days following
a public announcement that a Person or group of affiliated or
associated Persons has acquired, or obtained the right to acquire,
beneficial ownership of 20% or more of the outstanding shares of
Common Stock; or 10 days following the commencement of a tender
offer or exchange offer that would result in a Person or group
beneficially owning 30% or more of such outstanding shares of Common
Stock.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on November 30, 1999, unless
redeemed earlier by the Company.
In the event that, at any time following the Distribution Date, the
Company is the surviving corporation in a merger with an Acquiring
Person and the Company's Common Stock is not changed or exchanged; a
Person becomes the beneficial owner of more than 30% of the then
outstanding shares of Common Stock (except pursuant to an offer for
all outstanding shares of Common Stock that the Continuing Directors
determine to be fair to and otherwise in the best interests of the
Company and its stockholders); an Acquiring Person engages in one or
more "self-dealing" transactions; or during such time as there is an
Acquiring Person, an event occurs that results in such Acquiring
Person's ownership interest being increased by more than one
percentage point, each holder of a Right will thereafter have the
right to receive, upon exercise thereof and in lieu of Preferred
Stock, Common Stock (or, in certain circumstances, cash, property,
or other securities of the Company) having a value equal to twice
the Purchase Price of the Right.
In the event that, at any time following the Stock Acquisition Date,
the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation;
or 50% or more of the Company's assets or earning power is sold or
transferred to any Person other than a subsidiary of the Company,
each holder of a Right shall thereafter have the right to receive,
upon exercise thereof and in lieu of Preferred Stock, common stock
of the acquiring Person having a value equal to twice the Purchase
Price of the Right.
<PAGE>
At any time prior to the earlier of November 30, 1999, or 10 days
following the Stock Acquisition Date, the Company may redeem the
Rights in whole, but not in part, at a price of $0.01 per Right
(payable in cash, Common Stock, or other consideration deemed
appropriate by the Board of Directors).
Until a Right is exercised, the holder will have no rights as a
shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
Stock Option and Stock Appreciation Rights Plan:
On August 7, 1988, the Company initiated a stock option and stock
appreciation rights plan (Plan #1) for sale or award to key
employees as incentive stock options, non-qualified stock options or
stock appreciation rights, and may not be exercised later than ten
years from the date of the grant. The options exercise price is
$18.00 per share.
On March 25, 1993, the Company initiated a second stock option and
stock appreciation rights plan (Plan #2) with the same terms and
conditions as the first plan with the options exercise price at
$20.00 per share.
On December 8, 1994, the Company initiated a third stock option and
stock appreciation rights plan (Plan #3) with the same terms and
conditions as the previous two plans with the options exercise price
at $31.00 per share.
The following table summarizes the options activity.
Shares Range ofOption Prices
Options outstanding at January 1, 1993 28,410
Options granted (Plan #2) 14,000 $20.00
Options exercised (Plan #1) (4,567) $18.00
Options exercised (Plan #2) (275) $20.00
Options outstanding at December 31, 1993 37,568
Options granted (Plan #3) 69,500 $31.00
Options exercised (Plan #1) (4,179) $18.00
Options exercised (Plan #2) (1,825) $20.00
Options outstanding at December 31, 1994 101,064
Options granted (Plan #3) 0 $31.00
Options exercised (Plan #1) (3,061) $18.00
Options exercised (Plan #2) (770) $20.00
Options cancelled (Plan #1) (1,000) $18.00
Options outstanding at December 31, 1995 96,233
Options exercisable at December 31, 1995 96,233
At December 31, 1995, the Company had reserved 96,233 shares of
common stock to cover grants under the plans.
Dividend Restriction and Regulatory Matters:
Permission from the Comptroller of the Currency is required if the
total of dividends declared, by the Bank, in a calendar year exceeds
the total of its net
profits, as defined by the Comptroller, for that year, combined
with its retained net profits of the two preceding years. The
retained net profits of the Company available for dividends are
approximately $11,522,000 at December 31, 1995.
The Bank is required to maintain minimum amounts of capital to total
"risk weighted" assets, as defined by the bank regulatory
authorities. At December 31, 1995, the Bank is required to have
Tier 1 and Total Capital Ratios of no less than 4.0% and 8.0%,
respectively. At December 31, 1995, the Bank's Tier 1 and Total
Capital Ratios were 13.9% and 14.8%, respectively, as compared to
14.3% and 15.2% at December 31, 1994. The Bank's leverage ratios at
December 31, 1995 and 1994 were 9.1% and 8.8%, respectively.
NOTE 8 - RETIREMENT PLANS
401(K) Profit Sharing Plan:
Effective January 1, 1995, the Company started a profit sharing
retirement plan under which eligible employees may defer a portion
of their annual compensation, pursuant to Section 401(K) of the
Internal Revenue Code. The Company matches employee contributions
at a designated rate times elective contribution. All employees
with at least one year of service and who have attained the age of
21 are eligible to participate. The Company's contributions to the
401(K) plan were $75,000 for the year ended December 31, 1995.
Defined Benefit Pension Plan:
Pension expense of $138,000, $106,000, and $71,000 was recognized in
1995, 1994 and 1993, respectively. The following table sets forth
the plan's funded status and amounts recognized in the consolidated
financial statements:
December 31
(In Thousands) 1995 1994
Actuarial present values of
benefit obligations:
Vested benefit obligation $2,428 $2,833
Accumulated benefit obligation $2,485 $2,878
Projected benefit obligation $(3,526) $(3,732)
Plan assets at fair value 3,892 3,853
Plan assets in excess of projected
benefit obligation 366 121
Unrecognized net assets
at January 1, 1990,
being recognized
over 11 years (210) ( 253)
Unrecognized net loss 69 146
Prepaid pension cost recognized
in the accompanying balance sheets $225 $14
December 31
(In Thousands) 1995 1994 1993
Net pension expense includesthe
following: Normal service cost $219 $171 $146
Interest cost on projected benefit
obligation 205 275 256
Actual return on plan assets (803) (188) (193)
Net amortization and deferral 517 (152) (138)
Net pension expense $138 $106 $71
<PAGE>
The significant majority of plan assets is invested in common
stocks, treasury securities and corporate obligations, with the
balance in cash and short-term investments. Investment in the
Company's stock as of December 31, 1995 and 1994, was 20,544 shares
valued at $669,000 and $588,000, respectively.
The weighted average discount rate and expected long-term rate of
return on assets used were 7.50% and 8.25% as of December 31, 1995
and December 31, 1994. The increase in salary levels was 5%.
NOTE 9 - DEFERRED COMPENSATION
The Bank has a deferred compensation plan for the benefit of key
employees. Under the plan, upon retirement after age 65, the
employee shall receive a minimum of fifty percent of his then
monthly salary for one hundred twenty months. This amount will be
reduced by one-half of one percent for each month that retirement is
prior to age 65 with the minimum age for retirement at age 60. If a
covered employee dies while employed by the Bank, a death benefit of
fifty percent of the employee's then annual salary is payable to the
employee's beneficiary over ten years. The expense charged to
operations for future obligations was $137,000, $101,000, and
$95,000 in 1995, 1994 and 1993, respectively.
NOTE 10 - INCOME TAXES
The provision for income taxes is comprised of the following
components:
Year Ended December 31
(In Thousands) 1995 1994 1993
Current income tax expense:
Federal $1,026 $1,491 $1,515
State 0 0 0
1,026 1,491 1,515
Deferred income tax (benefit)/expense 674 (80) (104)
Provision for income tax $1,700 $1,411 $1,411
A reconciliation of the statutory federal income tax rate and the
effective rate is as follows:
Year Ended December 31
(In Thousands) 1995 1994 1993
Amount % Amount % Amount %
Income taxes at the
statutory rate $2,228 34 $2,002 34 $1,863 34
Increase/(decrease) in
federal tax expense
resulting from:
Tax exempt income (636) (10) (637) (11) (545) (10)
Prior year underaccrual/
(overaccrual) (33) 0 18 0 45 1
Other 141 2 28 1 48 1
Provision for income tax $1,700 26 $1,411 24 $1,411 26
<PAGE>
The significant components of the Company's deferred tax
liabilities and assets as of December 31, 1995 and 1994 are as
follows (in thousands):
December 31
1995 1994
Deferred Tax Assets:
Loan loss reserve $ 513 $ 553
Deferred compensation 308 274
Interest income 8 4
Total deferred tax assets 829 831
Deferred Tax Liabilities:
Depreciation 248 245
Pension costs 77 5
Lease receivables 597 0
Fair value adjustment,
available for sale
securities 478 17
---- ---
1,400 267
Net Deferred Assets/
(Liabilities) $(571) $564
NOTE 11 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The following fair value estimates, methods and assumptions were
used to measure the fair value of each class of financial
instruments for which it is practical to estimate that value:
Investment securities:
The fair value of investment securities, except certain state and
municipal securities, is estimated based on published bid prices or
bid quotations received from securities dealers. The fair value of
certain state and municipal securities is not readily available
through market sources other than dealer quotations, so fair value
estimates are based on quoted market prices of similar instruments,
adjusted for differences between the quoted instruments and the
instruments being valued.
Loans:
Fair values are estimated for portfolios of loans with similar
financial characteristics. Loans are segregated by type such as
commercial, residential mortgage, and other consumer loans.
The fair value of loans is calculated by discounting scheduled cash
flows through the estimated maturity using estimated market discount
rates that reflect the credit and interest rate risk inherent in the
loan. The estimate of maturity is based on the Company's historical
experience with repayments for each loan classification, modified,
as required, by an estimate of the effect of current economic and
lending conditions.
Deposit Liabilities:
The fair value of deposits with no stated maturity, such as non-
interest bearing demand deposits, savings, and money market and
checking accounts, is equal to the amount payable on demand as of
December 31, 1995. The fair value of certificates of deposit is
based on the discounted value of contractual cash flows. The
discount rate is estimated using the rates currently offered for
deposits of similar remaining maturities.
<PAGE>
The estimated fair values of the Company's financial instruments
are as follows:
(In Thousands) 1995 1994
Carrying Fair Carrying Fair
Amount Value Amount Value
Financial Assets:
Cash and Short-Term Investments $46,781 $46,781 $32,232 $32,232
Investment Securities 114,320 115,240 138,144 134,170
Loans 232,113 231,657 192,518 188,494
Less: Allowance for Loan Losses 2,413) 2,146)
$390,801 $393,678 $360,748 $354,896
Financial Liabilities:
Deposits $363,433 $352,178 $337,223 $335,678
The fair value of commitments to extend credit is estimated using
the fees currently charged to enter into similar agreements, and as
the fair value for these financial instruments were not material,
these disclosures are not included above.
Limitations:
Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial
instrument. These estimates do not reflect any premium or discount
that could result from offering for sale at one time the Company's
entire holdings of a particular financial instrument. Because no
market exists for a significant portion of the Company's financial
instruments, fair value estimates are based on judgments regarding
future expected loss experience, current economic conditions, risk
characteristics of various financial instruments, and other factors.
These estimates are subjective in nature and involve uncertainties
and matters of significant judgment and therefore cannot be
determined with precision. Changes in assumptions could
significantly affect the estimates.
Fair value estimates are based on existing on-and off-balance sheet
financial instruments without attempting to estimate the value of
anticipated future business and the value of assets and liabilities
that are not considered financial instruments. Significant assets
and liabilities that are not considered financial assets or
liabilities include the deferred tax assets and bank premises and
equipment. In addition, the tax ramifications related to the
realization of unrealized gains and losses can have a significant
effect on fair value estimates and have not been considered in many
of the estimates.
NOTE 12 - COMMITMENTS AND CONTINGENCIES
Financial Instruments with Off-Balance Sheet Risk:
In the normal course of business, the Company enters into a variety
of financial instruments with off-balance sheet risk. These
financial instruments include commitments to extend credit and
standby letters of credit both of which involve to varying degrees,
elements of risk in excess of the amounts recognized in the
financial statements. Credit risk, the risk that a counterparty of
a particular financial instrument will fail to perform, is the
contract amount of commitments to extend credit and standby letters
of credit. The credit risk associated with these financial
instruments is essentially the same as that involved in extending
loans to customers. Credit risk is managed by limiting the total
amount of arrangements outstanding and by applying normal credit
policies to all activities with credit risk. Collateral is obtained
based on Management's credit assessment of the customer. At
December 31, 1995 and 1994, the Company had commitments to make
loans and outstanding letters of credit totaling $13,930,000
<PAGE>
and $12,526,000, respectively (of this amount, outstanding letters
of credit totaled $3,061,000 and $2,841,000, respectively). Many
of such commitments to extend credit may expire without being drawn
upon, and therefore, the total commitment amounts do not necessarily
represent future cash flow requirements.
Concentration of Credit Risk:
The Bank's operations are affected by various risk factors including
interest rate risk, credit risk and risk from geographic
concentration of lending activities. Management attempts to manage
interest rate risk through various asset/liability management
techniques designed to match maturities of assets and liabilities.
Loan policies and administration are designed to provide assurance
that loans will only be granted to creditworthy borrowers, although
credit losses are expected to occur because of subjective factors
and factors beyond the control of the Bank. The Bank is mandated by
the Community Reinvestment Act and other regulations to conduct most
of its lending activities within the geographic area where it is
located. As a result, the Bank and its borrowers may be vulnerable
to the consequences of changes in the local economy.
Self-Funded Health Plan:
The Bank provides self-funded comprehensive health care coverage to
substantially all of its employees. The plan is covered by an
umbrella insurance policy for catastrophic illnesses. The Bank's
maximum liability is $25,000 per participant with an overall maximum
liability of $325,000 annually.
Other:
In addition, the Bank, from time to time, may be subject to claims
and lawsuits relating to the conduct of its normal banking business.
The Company, based on advice of legal counsel, has informed us that
there are no pending or threatening litigations or unasserted claims
against them at the present time.
<PAGE>
NOTE 13 - CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY
SOUTHERN JERSEY BANCORP OF DELAWARE, INC. (Parent Company Only)
CONDENSED BALANCE SHEET
(In Thousands Except Share and Per Share Data)
December 31 1995 1994
ASSETS
Cash and due from banks $667 $628
Investment in bank subsidiary 36,277 32,010
Other assets 250 450
TOTAL ASSETS $37,194 $33,088
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Dividends Payable $542 $528
Other Liabilities 9 5
Total Liabilities 551 533
SHAREHOLDERS' EQUITY
Preferred stock, no par value;
shares authorized - 500,000;
no shares issued Common stock,
par value $1.67 per share;
shares authorized - 5,000,000;
shares issued - 1,275,000 2,129 2,129
Additional paid-in-capital 2,223 2,258
Retained earnings 35,103 31,344
Unrealized gains on securities 929 56
------ ------
40,384 35,787
Less: Treasury stock at cost -
190,193 shares in 1995 and 175,767
shares in 1994 3,741 3,232
Total Shareholders' Equity 36,643 32,555
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $37,194 $33,088
<PAGE>
SOUTHERN JERSEY BANCORP OF DELAWARE, INC.
(Parent Company Only)
CONDENSED STATEMENT OF INCOME
(In Thousands) Year Ended December 31
1995 1994 1993
Income:
Cash dividends from
subsidiary $1,593 $1,554 $1,656
Expenses:
Operating Expenses 135 116 101
Income before income taxes 1,458 1,438 1,555
Equity in undistributed
earnings of subsidiaries 3,394 3,039 2,512
NET INCOME $4,852 $4,477 $4,067
CONDENSED STATEMENT OF CASH FLOWS
(In Thousands) Year Ended December 31
1995 1994 1993
Cash flows from operating
activities:
Net income $4,852 $4,477 $4,067
Adjustments to reconcile
income from continuing
operations to net cash
provided by operating
activities:
Equity in net earnings of
subsidiary (3,394) (3,039) (2,511)
Amortization of organization
costs 0 16 32
(Increase)/decrease in other
assets 200 (450) 0
Increase in liabilities 18 12 67
Net cash provided by operating
activities 1,676 1,016 1,655
Cash flows from investing
activities:
Net cash used for
investing activities 0 0 0
Cash flows from financing
activities:
Cash dividends (1,093) 1,054) (997)
Purchase of Treasury stock (800) (156) (713)
Sale of Treasury stock 256 206 115
Net cash used for financing
activities (1,637) (1,004) (1,595)
Net increase in cash and
cash equivalents 39 12 60
Cash and cash equivalents at
beginning of year 628 616 556
Cash and cash equivalents at
end of year $667 $628 $616
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors of
F & M Investment Company
We have audited the balance sheets of F & M Investment
Company, (a wholly-owned subsidiary of Farmers & Merchants National
Bank) as of December 31, 1995 and 1994 and the related statements of
stockholders' equity, income and cash flows for the years then
ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
F & M Investment Company, as of December 31, 1995 and 1994 and the
results of its operations and cash flows for the years then ended,
in conformity with generally accepted accounting principles.
s/ Belfint, Lyons & Shuman, P.A.
_______________________________________
January 23, 1996
Wilmington, Delaware
<PAGE>
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of Registrant
Information regarding Directors of Registrant will be set
forth in the Southern Jersey Bancorp of Delaware, Inc. Proxy
Statement for the annual meeting of shareholders to be held April
11, 1996, and is incorporated herein by reference. Information
regarding executive officers of Registrant is set forth under the
caption "Executive Officers" in Item 1(a) hereof.
Item 11. Executive Compensation
Information regarding executive compensation will be set
forth in the Southern Jersey Bancorp of Delaware, Inc. Proxy
Statement for the annual meeting of shareholders to be held April
11, 1996, and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Information regarding security ownership of certain
beneficial owners and Management will be set forth in the Southern
Jersey Bancorp of Delaware, Inc. Proxy Statement for the annual
meeting of shareholders to be held April 11, 1996, and is
incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
Information regarding certain relationships and related
transactions will be set forth in the Southern Jersey Bancorp of
Delaware, Inc. Proxy Statement for the annual meeting of
shareholders to be held April 11, 1996, and is incorporated herein
by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(1) Financial Statements
The financial statements filed as a part of this report
are listed on the Index to Consolidated Financial Statements on Page
33.
<PAGE>
(2) Financial Statement Schedules
All other schedules have been omitted because the required
information is shown in the Consolidated Financial Statements or
notes thereto, the statistical information in Item 1, pursuant to
Industry Guide 3, or they are not applicable.
(3) (a) Exhibits (numbered in accordance with Item 601
of Regulation S-K)
Exhibit
Number Description
3A Form of Certificate of Incorporation of
the Registrant -
Incorporation by reference to Definitive
Proxy Statement filed and dated June 16, 1989
3B Form of Bylaws of the Registrant -
Incorporation by reference to Definitive
Proxy Statement filed and dated June 16, 1989
4A Form of Common Stock Certificate -
Incorporation by reference to Definitive
Proxy Statement filed and dated June 16, 1989
4B Instruments Defining the Rights of
Security Holders -
Incorporation by reference to Form 8-A
filed
November 30, 1989
10A Stock Option and Stock Appreciation
Rights Plan -
Incorporated by reference to the
Registrant's Definitive Proxy Statement
filed February 27, 1987, and the
Registrant's Annual Report on Form 10-K for
the fiscal year ENded December 31, 1987,
filed March 31, 1988.
21 Subsidiaries of the Registrant -
Included under Item 1, Page 2 of this
filing.
23 Consent of William Thos. Athey &
Company, Certified
Public Accountants, Professional
Association Independent Public Accountants -
Included under Item 8, Page 34 of this
filing.
(3) (b) Reports on Form 8-K
No reports on Form 8-K have been filed by the
Registrant during the quarter ended December 31, 1995.
(3) (c) Form of Deferred Compensation Agreement for named
executive officers, Clarence D. McCormick, Sr., Harry
W. Bullock, and Ralph Cocove is incorporated by
reference to Form 10-K filed March 31, 1989.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
SOUTHERN JERSEY BANCORP OF DELAWARE, INC.
Dated:March 28, 1996 By:s/ Clarence D. McCormick
----------------------
Clarence D. McCormick
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
Signatures Title Date
s/ Henry L. Backenson Vice Chairman March 28, 1996
- -----------------------------
Henry L. Backenson
s/ Alfred F. Caggiano Vice Chairman March 28, 1996
- -----------------------------
Alfred F. Caggiano
s/ Ephraim M. Carll Director March 28, 1996
- -----------------------------
Ephraim M. Carll
s/ Keron D. Chance Director March 28, 1996
- -----------------------------
Keron D. Chance, Esq.
s/ Harry W. Bullock Director March 28, 1996
- -----------------------------
Harry W. Bullock
s/ Frank LoBiondo Director March 28, 1996
- -----------------------------
Frank LoBiondo
s/ Clarence D. McCormick, Jr. Director March 28, 1996
- -----------------------------
Clarence D. McCormick, Jr.
s/ Louis Pizzo Director March 28, 1996
- -----------------------------
Louis Pizzo
s/ Donald Strang Director March 28, 1996
- ----------------------
Donald Strang
<PAGE>
PART II - OTHER INFORMATION
EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
Exhibit 27. Financial Data Schedule
B. Reports on Form 8-K
No reports have been filed on form 8-K during this quarter.
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 18,981
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 27,800
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 33,754
<INVESTMENTS-CARRYING> 81,486
<INVESTMENTS-MARKET> 115,240
<LOANS> 232,113
<ALLOWANCE> 2,413
<TOTAL-ASSETS> 404,240
<DEPOSITS> 363,433
<SHORT-TERM> 0
<LIABILITIES-OTHER> 4,164
<LONG-TERM> 0
<COMMON> 2,129
0
0
<OTHER-SE> 34,514
<TOTAL-LIABILITIES-AND-EQUITY> 404,240
<INTEREST-LOAN> 19,396
<INTEREST-INVEST> 7,709
<INTEREST-OTHER> 1,107
<INTEREST-TOTAL> 28,212
<INTEREST-DEPOSIT> 13,114
<INTEREST-EXPENSE> 13,114
<INTEREST-INCOME-NET> 13,832
<LOAN-LOSSES> 1,266
<SECURITIES-GAINS> 360
<EXPENSE-OTHER> 10,023
<INCOME-PRETAX> 6,552
<INCOME-PRE-EXTRAORDINARY> 6,552
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,852
<EPS-PRIMARY> 4.43
<EPS-DILUTED> 4.43
<YIELD-ACTUAL> 4.11
<LOANS-NON> 3,133
<LOANS-PAST> 3,357
<LOANS-TROUBLED> 1,227
<LOANS-PROBLEM> 1,741
<ALLOWANCE-OPEN> 2,146
<CHARGE-OFFS> 1,069
<RECOVERIES> 70
<ALLOWANCE-CLOSE> 2,413
<ALLOWANCE-DOMESTIC> 2,413
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
