UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCANGE ACT OF 1934
For the quarter period ended September 30, 1996
Commission File Number 0-12635
Southern Jersey Bancorp of Delaware, Inc.
(Exact name of Registrant as Specified in Charter)
Delaware 22-2983654
(State of Other Jurisdiction (I.R.S. Employer Identification
of Incorporation or Organization) Number)
53 South Laurel Street
Bridgeton, New Jersey 08302
(Adress of Principal Executive Offices)
(609)453-3000
(Registrant's Area Code and Telephone Number)
Registrant has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the period it
has been subject to such filing requirements.
[X] YES [ ] NO
Common Stock Outstanding as of September 30, 1996 1,084,907
<TABLE>
PART I - Financial Information
This is the consolidated balance sheet for Southern Jersey Bancorp.
All dollar amounts are in thousands.
<CAPTION>
9/30/96 9/30/95 12/31/95
<S> <C> <C> <C>
ASSETS
Cash and Due from Banks 17,599 14,904 18,981
Interest Bearing Deposits 0 2,000 0
Investment Securities Held-to-Maturity 67,898 101,450 80,566
Investment Securities Available for Sale 35,655 24,436 33,754
Market Value
9/31/96 103,410
9/31/95 126,077
12/31/95 115,240
Loan net of unearned income 280,168 221,234 232,113
Less: Allowance for Loan Losses 3,310 2,383 2,413
------ ------ ------
Net Loans 276,858 218,851 229,700
Federal Funds Sold 10,000 9,400 27,800
Bank Premises and Equipment - Net 6,326 6,055 5,916
Other Assets 9,599 8,090 7,523
------ ------- ------
Total Assets 423,935 385,186 404,240
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C> <C>
Deposits - Interest Bearing 326,814 278,393 286,117
Non-Interest Bearing Deposits 53,550 67,782 77,316
------- ------- -------
Total Deposits 380,364 346,175 363,433
Federal Funds Purchased 0 0 0
Other Liabilities 4,473 3,387 4,164
------ -------- --------
Total Liablities 384,837 349,562 367,597
Shareholder's Equity
Common Stock par value $1.67 per share
Authorized 5,000,000 shares
Issued 1,275,000 shares 2,129 2,129 2,129
Surplus 2,223 2,258 2,223
Undivided Profits 38,766 34,267 35,103
------- ------ -------
43,118 38,654 39,455
Less: Treasury Stock at cost
190,093 Common Shares 9-30-96
187,342 Common Shares 9-30-95
190,193 Common Shares 12-31-95 3,793 3,649 3,741
------ ----- -----
39,325 35,005 35,714
Allowance for unrealized gain/losses
on Available for Sale Securities (227) 619 929
Total Shareholders' Equity 39,098 35,624 36,643
TOTAL LIABILITES AND ------ ------ ------
SHAREHOLDERS' EQUITY 423,935 385,186 404,240
</TABLE>
<TABLE>
This is the consolidated statement of earnings for Southern Jersey
Bancorp. All dollar amounts are in thousands except per share data.
<CAPTION>
Nine Months Third Qtr.
Ended Ended
Sept. 30 Sept. 30
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest on securities:
Taxable interest income 3,972 4,484 1,193 1,580
Tax-exempt interest income 1,272 1,361 506 316
Interest and fees on loans 16,143 13,622 5,822 4,785
Interest on interest bearing deposits 0 140 0 38
Federal funds sold 752 543 169 369
Lease Income 214 6 (11) 0
--- ----- ---- -----
Total Interest Income 22,353 20,156 7,679 7,088
INTEREST EXPENSE
Interest on deposits
Savings 4,377 4,252 1,483 1,524
Certificates of deposit $100,000
and over 1,976 1,416 688 555
Fed Funds Purchased 0 31 0 0
Other Time Deposits 4,466 3,918 1,540 1,448
----- ----- ----- -----
Total Interest Expense 10,819 9,617 3,711 3,527
NET INTEREST INCOME 11,534 10,539 3,968 3,561
Provision for Loan Losses 960 575 345 125
Net Interest Income After ------ ------ ----- -----
Provision for Loan Losses 10,574 9,964 3,623 3,436
OTHER OPERATING INCOME
Service charges on deposit accounts 1,219 1,026 435 359
Trust Department Income 515 492 174 167
Commissions, Collection
Charges and Fees 370 271 154 83
Investment security gains (losses) 358 226 316 0
Other Non-Interest Income
--- --- --- ---
Total Other Operating Income 2,462 2,015 1,079 609
OTHER OPERATING EXPENSES
Salaries and Wages 3,214 3,198 996 986
Pension and Other Benefits 794 952 221 264
Occupancy and Equipment 1,238 1,225 439 450
FDIC Assessments 73 411 25 (5)
Postage, Stationary and Supplies 295 285 178 92
Professional fees 423 243 183 103
Other Operating Expenses 1,118 979 398 317
----- ---- --- -----
Total Other Operating Expenses 7,155 7,293 2,440 2,207
Income Before Income Taxes 5,881 4,686 2,262 1,838
Applicable Income Taxes 1,620 1,212 570 462
----- ----- ---- ----
NET INCOME 4,261 3,474 1,692 1,376
----- ----- ----- -----
Earnings per Common Share 3.93 3.16 1.57 1.26
</TABLE>
<TABLE>
SOUTHERN JERSEY BANCORP OF DELAWARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands)
<CAPTION>
<S> <C> <C>
Nine Months Ended
Sept 30
1996 1995
---- ----
Cash flow from operating activities
Net Income 4,261 3,474
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of organization expenses 0 0
Depreciation of premises and equipment 292 266
Net Loans Charge-offs (63) (338)
Provision for Loan Losses 960 575
Premium Amortization net of discount accretion 46 190
Gain or (Loss) on sale of securities 358 226
Gain on Other Real Estate 0 0
Gain on Sale of bank premises and equipment (42) 0
(Increase)/decrease in Other Assets (2090) (1,266)
Increase/(decrease) in other Liabilities 309 269
Increase/(decrease) in borrowed funds 0 0
--- ------
Net cash provided by operating activities 4,031 3,396
Cash flows from investing activities
Interest bearing deposits 0 1,000
Purchase of Investment Securities (15,542) (18,903)
Proceeds from sale of Investment Securities 8,000 12,437
Proceeds from maturities of Investment Securities 15,402 18,333
Increase in Loans (48,055) (28,716)
Bank premises and equipment (702) (771)
Proceeds from sale of bank premises and equipment 42 0
Proceeds from sale of Other Real Estate 1,361 312
------ ----
Net cash used for investing activities (39,494) (16,308)
Cash flows from Financing activities
(Decrease)/ Increase in total deposits 16,931 8,952
Cash Dividends (598) (551)
Purchase Treasury stock (235) (573)
Sale of Treasury Stock 183 156
---- -----
Net Cash Provded by Financing Activities 16,281 7,984
Net increase/(decrease) in cash and cash equivalents (19,182) (4,928)
Cash and Equivalents at beginning of year 46,781 29,232
Cash and Equivalents at the end of the quarter 27,599 24,304
Supplementary Schedule of NonCash Investing
and Financing Activities 2,079 123
Loans, Net of Charge-offs transferred to Other Real
Estate Owned:
</TABLE>
SOUTHERN JERSEY BANCORP OF DELAWARE,INC.
NOTES TO FINANCIAL STATEMENTS
Nine Months Ended September 30, 1996
1) Principles of Consolidation: The consolidated financial statements
reflect the account of Southern Jersey Bancorp of Delaware, Inc. and
its subsidiary, The Farmers and Merchants National Bank of Bridgeton
after the elimination of all intercompany balances and transactions.
2) There have been no significant changes in the account policies of
the registrant since December 31, 1995, the date of the most recent
annual report to security holders, nor have there occurred events
which have had a material impact on the disclosure herein.
3) The interim financial statements contained herein reflect all
adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim periods presented.
4) In accordance with Rule 10-01(b)(8), the unaudited interim financial
statements filed under cover of Form 10-Q for September 30, 1996,
reflect adjustments that are of a nomal recurring nature which are,
in the opinion of Management, necessary to a fair statement of the
results for the interim periods presented.
SOUTHERN JERSEY BANCORP OF DELAWARE, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
SOUTHERN JERSEY BANCORP OF DELAWARE, INC.
(Registrant)
Paul Ritter
Treasurer
Clarence D. McCormick
Chairman/CEO
DATE:
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF
RESULTS IN OPERATIONS
Nine Months Ended September 30, 1996
The net operating income of $4,261,000 for the first nine months
of 1996 is 22.65% above the same period for prior year. Net
income after taxes for 1996 is projected to be approximately
$5,200,000 or approximately 7.17% more than 1995.
This is primarily due to the fact that during the first three quarters
of 1996 an increase in interest and fees on loans and an increase
in federal funds sold income has contributed to a net interest
income increase of $995,000 in the first three quarters of 1996
compared to 1995.
Additionally, FDIC expenses decreased in the first three quarters of
1996 $338,000 as compared to 1995 as a result of legislation enacted
in the third quarter of 1995.
An unrealized loss of approximately $227,000 was recognized on the
value of securities available for sale pursuant to FASB 115.
There have been no other significant changes in charge-offs,
recoveries, provision for loan and lease losses, non-accruing or
non-performing loans in the last quarter except for an increase of
approximately $335,000 in loans secured by real estate and deliquent
30-89 days and $593,000 in other loans to individuals deliquent
30-89 days. These loans are adequately secured by real estate and
other collateral and minimal loss is expected at this time.
Total charge-offs for the first nine month of 1996 totalled $656,000,
while total recoveries during the period were $593,000.
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
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 17,599
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 10,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 35,655
<INVESTMENTS-CARRYING> 103,553
<INVESTMENTS-MARKET> 103,410
<LOANS> 280,168
<ALLOWANCE> 3,310
<TOTAL-ASSETS> 423,935
<DEPOSITS> 380,364
<SHORT-TERM> 0
<LIABILITIES-OTHER> 4,473
<LONG-TERM> 0
<COMMON> 2,129
0
0
<OTHER-SE> 36,969
<TOTAL-LIABILITIES-AND-EQUITY> 423,935
<INTEREST-LOAN> 16,357
<INTEREST-INVEST> 5,244
<INTEREST-OTHER> 752
<INTEREST-TOTAL> 22,353
<INTEREST-DEPOSIT> 10,819
<INTEREST-EXPENSE> 10,819
<INTEREST-INCOME-NET> 11,534
<LOAN-LOSSES> 960
<SECURITIES-GAINS> 358
<EXPENSE-OTHER> 7,155
<INCOME-PRETAX> 5,881
<INCOME-PRE-EXTRAORDINARY> 5,881
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,261
<EPS-PRIMARY> 3.93
<EPS-DILUTED> 3.93
<YIELD-ACTUAL> 5.17
<LOANS-NON> 3,136
<LOANS-PAST> 913
<LOANS-TROUBLED> 996
<LOANS-PROBLEM> 273
<ALLOWANCE-OPEN> 2,413
<CHARGE-OFFS> 656
<RECOVERIES> 593
<ALLOWANCE-CLOSE> 3,310
<ALLOWANCE-DOMESTIC> 3,310
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
