UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31,1998
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
of Incorporation or Organization) Identification Number)
53 South Laurel Street
Bridgeton, New Jersey 08302
(Address 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 and Exchange Act of 1934 during the period it
has been subject to such filing requirements.
[X] YES [ ] NO
Common Stock Outstanding as of March 31, 1998 1,093,805
<PAGE>
<TABLE>
PART I - Financial Information
This is the consolidated balance sheet for Southern Jersey Bancorp.
All dollar amounts are in thousands.
3/31/98 3/31/97 12/31/97
<S> <C> <C> <C>
ASSET
Cash and due from banks 21,673 14,897 18,565
Interest Bearing Deposits 4,000 0 4,000
Investment Securities Held to Maturity
58,105 62,315 55,415
Investment Securities Available for Sale
35,237 37,949 37,278
Fair Value: Securities Held-to-Maturity
3/31/98 58,568
3/31/97 61,788
12/31/97 55,956
Loan: Net of Unearned Income 295,517 300,920 305,556
Less: Allowance for loan losses 6,055 3,440 5,236
------ ------- -----
Net Loans 289,462 297,480 300,320
------ ------- -----
Federal Funds Sold 38,800 18,700 40,950
Bank Premises and Equipment - Net
6,505 6,686 6,353
Other Assets 23,824 10,572 20,473
----- ------ -----
Total Assets 477,606 448,599 483,354
======= ======= ======
LIABILITIES 3/31/98 3/31/97 12/31/97
Deposits - Interest Bearing 375,382 347,724 377,364
Non-Interest Bearing Deposits 57,052 53,628 61,100
------- ------- ------
Total Deposits 432,434 401,352 438,464
Funds Purchased - - -
Other Liabilities 5,703 6,568 5,331
------ ------- ------
Total Liabilities 438,137 407,920 443,795
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 2,260 2,260 2,260
Undivided Profits 38,789 40,489 38,767
------ ------- ------
43,178 44,878 43,156
Less: Treasury Stock at cost
181,195 Common Shares 3-31-98
188,764 Common Shares 3-31-97
183,927 Common Shares 12-31-97
3,820 3,845 3,756
----- ------- ------
39,358 41,033 39,400
Allowance for unrealized gain/losses
on Available for Sale Securities 111 (354) 159
----- ------- ------
Total Shareholder's Equity 39,469 40,679 39,559
----- ------- -----
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
477,606 448,599 483,354
======= ======= =======
</TABLE>
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<TABLE>
This is the consolidated balance sheet for Southern
Jersey Bancorp of Delaware, Inc. All dollar amounts
are shown in thousands except for the per share data.
<CAPTION>
Three Months First Quarter
<S> <C> <C> <C> <C>
INTEREST INCOME
Int. on Securities:
Taxable int. income 1,089 1,088 1,089 1,088
Tax-Exempt int. inc. 352 362 352 362
Interest and Fees on Loans 6,429 6,214 6,429 6,214
Interest on Interest Bearing Deposits
- - - -
Federal Funds Sold 527 280 527 280
Lease Income 0 0 0 0
---- ---- ---- -----
Total Int. Income 8,397 7,944 8,397 7,944
INTEREST EXPENSE
Interest on Deposit Savings 1,378 1,187 1,378 1,187
Certificates of Deposit $100,000 and over
1,057 871 1,057 871
Federal Funds Purchased - - - -
Other Time Deposits 2,118 1,837 2,118 1,837
----- ----- ---- -----
Total Int. Expense 4,553 3,895 4,553 3,895
NET INTEREST INCOME 3,844 4,049 3,844 4,049
Provision for Loan Losses 1,200 345 1,200 345
----- ----- ---- ---
Net Interest Income After Provision for Loan Loss
2,644 3,704 2,644 3,704
OTHER OPERATING INCOME
Service charges on deposit accounts
411 408 411 408
Trust Department Income 190 181 190 181
Comm., collection
Charges and fees 254 94 254 94
Investment Security gains/(losses)
0 0 0 0
Other Non-Interest Income 0 0 0 0
----- ----- ---- ----
Total Other Operating Income 855 683 855 683
OTHER OPERATING EXPENSES
Salaries and Wages 1,094 1,181 1,094 1,181
Pension and other benefits 328 301 328 301
Occupancy and Equipment 450 383 450 383
FDIC Assessment 40 33 40 33
Postage, stationary and supplies
151 139 151 139
Professional Fees 342 112 342 112
Other Oper. Expen. 1,062 385 1,062 385
----- ----- ----- -----
Total Other Oper. Expenses 3,467 2,534 3,467 2,534
Income Before Income Taxes 32 1,853 30 1,853
Applicable Income Taxes 10 600 10 600
---- ----- ---- -----
NET INCOME 22 1,253 22 1,253
=== ===== ==== =====
Earnings Per Common Share 0.02 1.15 0.02 1.15
</TABLE>
<PAGE>
<TABLE>
SOUTHERN JERSEY BANCORP OF DELAWARE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in Thousands)
Three Months Ended
March 31
1998 1997
<S> <C> <C>
Cash Flows from Operating Activities
Net Income 22 1,253
Adjustments to reconcile net income to
net cash provided by oper. activities
Amortization of Organization Expenses 0 0
Depreciation of Premises and Equip. 132 98
Net Loan Charge-Offs (381) (95)
Provision for Loan Losses 1,200 345
Premium Amortization net of discount accretion
0 53
Gain or (Loss) on Sale of Securities 0 0
Gain on Other Real Estate (8) 0
Gain on Sale of Bank Premises & Equipment 0 0
(Increase)/decrease in Other Assets (3,360) (2,078)
Increase/(decrease) in Other Liabilities 372 1,385
Increase/(decrease) in Borrowed Funds 0 0
------ -----
Net Cash Provided by Operating Activities (2,023) 963
Cash Flows from Investing Activities
Interest Bearing deposits 0 0
Purchase of Investment Securities (15,457) (7,368)
Proceeds from Sale of Invest. Secur. 0 0
Proceeds from Maturities of Invest. Securities
14,622 3,233
Increase/(Decease) in Loans 10,039 (10,035)
Bank Premises and Equipment (284) (565)
Proceeds from Sale of Bank Premises and Equipment
0
Proceeds from Sale of Other Real Estate 155 103
----- ----
Net Cash Used for Investing Activities 9,075 (14,632)
Cash Flows from Financing Activities
(Decrease)/Increase in Total Deposits (6,030) 15,968
Cash Dividends 0 0
Purchase of Treasury Stock (201) (36)
Sale of Treasury Stock 137 87
----- ----
Net Cash Provided by Financing Activities (6,094) 16,019
Net Increase/(Decrease) in Cash and Cash Equivalents
958 2,350
Cash and Equivalents at the Beginning of the Year
63,515 31,247
------ ----
Cash and Equivalents at End of the Quarter 64,473 33,597
===== =====
Supplementary Schedule of Non-Cash Investing and
Financing Activities
Loans, Net of Charge-Offs transferred to
Other Real Estate Owned: 149 0
</TABLE>
<PAGE>
SOUTHERN JERSEY BANCORP OF DELAWARE, INC.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1998
1. Principals 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 accounting policies of
the Registrant the date the most recent annual report to security holders,
nor have there occurred events which have material impact on the
disclosures 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 period presented.
4. In accordance with Rule 10-01(b)(8), the unaudited interim financial
statements filed under cover of Form 10-Q for March 31, 1997, reflect
adjustments that are of a normal 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)
s/Paul J. Ritter, III
Paul J. Ritter, III
Treasurer
s/Clarence D. McCormick
Clarence D. McCormick
Chairman/CEO
DATE: May 15, 1998
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF
RESULTS IN OPERATIONS
Three Months Ended March 31, 1998
The net operating income of $22,000 for the first three months of 1998
is $1,231,000 below the same period for the prior year. Net income after
taxes for 1998 is projected to be approximately $900,000 or approximately
7.52% or more than 1997.
This decrease in net income through the first three months of 1998
is primarily due to the increase in the loan loss provision expense to
$1,200,000 as compared to $345,000 for the first quarter of 1998.
Additionally, a reserve for other marine assets of $437,000 was expensed
in the first quarter of 1998 as compared to no such expense in the first
quarter of 1997.
The increase in the loan loss provision expense was necessitated by
the substantial amount of marine installment loans required to be charged
off in the first quarter of 1998 which required the company to increase
its allowance for loan losses to comply with regulatory requirements.
There has been the following significant changes in charge offs,
recoveries, non-accruing or non-performing loans in the first
quarter of 1998.
An increase from the fourth quarter of 1997 to the first quarter of
1998 of approximately $391,000 in loans secured by real estate past due
90 or more days and still accruing, and an increase of $1,171,000 in
loans secured by real estate in non-accrual. An increase of $2,821,000
in commercial and industrial loans past due 30 through 89 days and still
accruing, and an increase of $2,997,000 in commercial and industrial
loans in non-accrual. A portion of these loans are secured by real
estate and other collateral.
Total charge offs for the first three months of 1998 totaled $1,323,000
while total recoveries during the same period were $942,000. These charge-
offs included a total of $1,109,000 in charge offs of loans to individuals
for household, family and other personal expenditures which includes
installment marine retail loans.
The Company has delinquent retail installment marine loans as follows:
$3,036,000 30-59 days delinquent, $444,000 60-89 days delinquent,
$415,000 90 days to 119 days delinquent. There are approximately
$26,900,000 of retail installment marine loans that are current
and performing.
<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.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MONTHS
<FISCAL-YEAR-END> DEC-31-97
<PERIOD-END> MAR-31-98
<CASH> 64,473
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 38,800
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 35,237
<INVESTMENTS-CARRYING> 58,105
<INVESTMENTS-MARKET> 58,568
<LOANS> 295,517
<ALLOWANCE> 6,457
<TOTAL-ASSETS> 477,606
<DEPOSITS> 432,434
<SHORT-TERM> 0
<LIABILITIES-OTHER> 5,703
<LONG-TERM> 0
<COMMON> 2,129
0
0
<OTHER-SE> 38,789
<TOTAL-LIABILITIES-AND-EQUITY> 477,606
<INTEREST-LOAN> 6,429
<INTEREST-INVEST> 1,441
<INTEREST-OTHER> 527
<INTEREST-TOTAL> 8,397
<INTEREST-DEPOSIT> 4,553
<INTEREST-EXPENSE> 4,553
<INTEREST-INCOME-NET> 3,844
<LOAN-LOSSES> 1,637
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,467
<INCOME-PRETAX> 32
<INCOME-PRE-EXTRAORDINARY> 32
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22
<EPS-PRIMARY> 0.03
<EPS-DILUTED> 0.02
<YIELD-ACTUAL> 0.02
<LOANS-NON> 8,239
<LOANS-PAST> 2,367
<LOANS-TROUBLED> 2,869
<LOANS-PROBLEM> 8,306
<ALLOWANCE-OPEN> 5,236
<CHARGE-OFFS> 1,323
<RECOVERIES> 942
<ALLOWANCE-CLOSE> 6,055
<ALLOWANCE-DOMESTIC> 6,055
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
