FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1995 Commission file number 0-13759
ANCHOR FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
South Carolina 57-0778015
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification number)
2002 Oak St., Myrtle Beach, S. C. 29577
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (803) 448-1411
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 shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at November 10, 1995
(Common stock, $6.00 par value) 2,540,420
<PAGE>
ANCHOR FINANCIAL CORPORATION AND SUBSIDIARIES
INDEX
PAGE NO.
Part I - Financial Information
Consolidated balance sheet - September 30, 1995
and December 31, 1994 1
Consolidated statement of income - three months
and nine months ended September 30, 1995 and 1994 2
Consolidated statement of cash flows -
nine months ended September 30, 1995 and 1994 3
Notes to consolidated financial statements 4-7
Management's Discussion and Analysis of
Financial Condition and Results of Operation 8-11
Part II - Other Information
Item 1 - Legal Proceedings 12
Item 2 - Changes in Securities 12
Item 3 - Defaults Upon Senior Securities 12
Item 4 - Submission of Matters to a Vote
of Security-Holders 12
Item 5 - Other Information 12
Item 6 - Exhibits and Reports on Form 8-K 12
<PAGE>
ANCHOR FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
(Unaudited) <F1>
<S> <C> <C>
Assets
Cash and due from banks $16,937,039 $18,838,551
Interest-bearing balances due from banks 99,000 99,000
Federal funds sold 14,425,000 1,000,000
Investment securities:
Held-to-maturity, at amortized cost (fair
value of $32,881,489 in 1995 and $33,949,605
in 1994) 32,924,483 35,012,480
Available-for-sale, at fair value (amortized
cost of $52,407,146 in 1995 and $45,031,822
in 1994) 52,637,509 44,066,796
Total investment securities 85,561,992 79,079,276
Loans 263,714,420 236,801,927
Less - unearned income (26,171) (30,651)
- reserve for loan losses (2,915,985) (2,795,941)
Net loans 260,772,264 233,975,335
Premises and equipment 13,642,829 11,666,522
Other assets 7,029,456 7,208,278
Total assets $398,467,580 $351,866,962
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Demand deposits $ 64,618,740 $ 52,730,429
NOW and Money Market accounts 172,358,332 155,753,241
Time deposits $100,000 and over 24,625,793 20,320,349
Other time and savings deposits 88,519,602 79,404,398
Total deposits 350,122,467 308,208,417
Federal funds purchased and securities sold
under agreements to repurchase 765,942 4,896,099
Other short-term borrowings 2,290,426 7,098,089
Long-term debt 15,000,000 5,000,000
Other liabilities 2,675,950 1,889,739
Total liabilities 370,854,785 327,092,344
Stockholders' Equity:
Common stock, $6 00 par value; 4,000,000 shares
authorized; shares issued and outstanding -
2,540,420 in 1995 and 1994 15,242,520 15,242,520
Surplus 8,479,858 8,479,858
Retained earnings 4,644,112 2,696,267
Unrealized gains (losses) on investment
securities available-for-sale, net of tax 152,039 (636,918)
Unearned ESOP shares (905,734) (1,007,109)
Total stockholders' equity 27,612,795 24,774,618
Total liabilities and
stockholders' equity $398,467,580 $351,866,962
<F1> Obtained from audited financial statements.
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
<PAGE>
ANCHOR FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended Three months ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $18,550,502 $13,945,750 $6,509,009 $4,941,001
Interest on investment
securities:
Taxable 3,261,802 2,317,155 1,120,463 1,019,410
Non-taxable 141,624 135,168 47,450 42,820
Other interest income 346,828 355,644 267,834 242,134
Total interest income 22,300,756 16,753,717 7,944,756 6,245,365
INTEREST EXPENSE:
Interest on deposits 9,135,728 6,087,291 3,288,696 2,368,196
Interest on short-term
borrowings 229,804 79,147 36,333 17,748
Interest on long-term debt 572,687 329,033 279,193 110,528
Total interest expense 9,938,219 6,495,471 3,604,222 2,496,472
Net interest income 12,362,537 10,258,246 4,340,534 3,748,893
Provision for loan losses 455,500 690,000 206,000 460,000
Net interest income after
provision for loan losses 11,907,037 9,568,246 4,134,534 3,288,893
NONINTEREST INCOME:
Trust income 160,631 163,399 57,254 96,977
Service charges on deposit
accounts 1,127,199 1,165,874 365,894 365,534
Commissions and fees 492,190 468,171 204,815 190,989
Gains on the sales of
mortgage loans 200,867 351,109 73,212 94,382
Investment securities gains 36,884 1,676,844 0 1,404,460
Other operating income 157,665 131,455 54,039 36,693
Total noninterest income 2,175,436 3,956,852 755,214 2,189,035
NONINTEREST EXPENSE:
Salaries and employee
benefits 5,316,075 4,502,568 1,888,043 1,585,623
Net occupancy expense 749,985 689,802 270,607 252,433
Equipment expense 761,889 752,858 276,494 259,442
Other operating expense 3,189,106 3,063,424 989,585 1,002,446
Total noninterest expense 10,017,055 9,008,652 3,424,729 3,099,944
Income before income taxes 4,065,418 4,516,446 1,465,019 2,377,984
Provision for income taxes 1,431,661 1,569,926 518,666 851,782
Net income $2,633,757 $2,946,520 $ 946,353 $1,526,202
Net income per share $ 1.04 $ 1.16 $ 0.37 $ 0.60
Weighted average number of
shares outstanding 2,540,420 2,538,464 2,540,420 2,540,420
</TABLE>
The accompanying notes to consolidated financial statements are an integral
part of these statements.
<PAGE>
ANCHOR FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
September, 30
1995 1994
<S> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities:
Net income $2,633,757 $2,946,520
Adjustments to reconcile net income to net cash
provided by operating activities:
Accretion and amortization of investment securities 58,716 349,688
Depreciation of premises and equipment 744,355 721,462
Amortization of intangible assets 241,926 203,984
Provision for loan losses 455,500 690,000
Gains on sales of investment securities (36,884) (1,676,845)
Gains on sales of mortgage loans (200,867) (351,109)
Gains on sales of premises and equipment (21,730) (10,955)
Change in interest receivable (2,944) (604,298)
Change in prepaid expenses 270,708 20,730
Change in income taxes payable 42,832 441,906
Change in deferred taxes 237,587 (357,767)
Change in interest payable 226,531 (31,571)
Change in accrued expenses 83,838 694,265
Origination of mortgage loans held for sale (9,677,155) (17,899,233)
Proceeds from sales of mortgage loans held for sale 10,385,880 17,409,849
Net cash provided by operating activities 5,442,050 2,546,626
Cash flows from investing activities:
Purchase of investment securities held-to-maturity (3,980,698) (9,573,591)
Proceeds from maturities of investment
securities held-to-maturity 5,943,525 5,122,061
Purchase of investment securities available-
for-sale (13,489,344) (33,109,546)
Proceeds from sales of investment securities
available-for-sale 2,286,575 6,675,913
Proceeds from maturities of investment
securities available-for-sale 3,930,783 3,783,865
Net change in loans (27,760,287) (22,688,609)
Capital expenditures (2,761,091) (1,333,881)
Proceeds from sale of premises and equipment 62,159 14,200
Other, net (541,876) (643,781)
Net cash used for investing activities (36,310,254) (51,753,369)
Cash flows from financing activities:
Net change in deposits 41,914,051 44,821,794
Net change in federal funds purchased (4,130,158) 374,829
Net change in short-term borrowings (4,807,664) (199,824)
Net change in long-term debt 10,000,000 0
Sale of common stock 0 221,600
Net change in ESOP borrowings 101,375 0
Cash dividends paid (685,912) (596,997)
Net cash provided by financing activities 42,391,692 44,621,402
Net change in cash and cash equivalents 11,523,488 (4,585,341)
Cash and cash equivalents at January 1 19,937,551 26,864,974
Cash and cash equivalents at September 30 $31,461,039 $22,279,633
</TABLE>
The accompanying notes to consolidated financial statements are an integral
part of these statements.
<PAGE>
ANCHOR FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1: BASIS OF PRESENTATION
The accompanying consolidated financial statements are
unaudited; however, such information reflects all adjustments
(consisting solely of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair
statement of the financial position and operating results of
Anchor Financial Corporation and its subsidiaries (the
"Corporation") for the periods presented. A summary of the
Corporation's significant accounting policies is set forth in
Note 1 to the Consolidated Financial Statements in the
Corporation's Annual Report on Form 10-K for 1994.
The results of operations for the three and nine month
periods ended September 30, 1995 are not necessarily
indicative of the results to be expected for the full year.
For purposes of the Consolidated Statement of Cash Flows, the
Corporation has defined cash and cash equivalents as cash on
hand, amounts due from banks, and federal funds sold.
Generally, federal funds are purchased and sold for one-day
periods.
On August 14, 1995, the Board of Directors of the Corporation
approved a two-for-one stock split payable on September 29,
1995 to shareholders of record on September 1, 1995. All
financial statement information presented in this report has
been restated to reflect the two-for-one stock split.
NOTE 2: RESERVE FOR LOAN LOSSES
Transactions to the reserve for loan losses for the nine
months ended September 30, 1995 and 1994 are summarized as
follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Balance, beginning of year $2,795,941 $2,361,656
Provision charged to operations 455,500 690,000
Recoveries of charged off loans 60,275 77,910
Loans charged off (395,731) (425,643)
$2,915,985 $2,703,923
</TABLE>
<PAGE>
ANCHOR FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3: NONPERFORMING ASSETS
The following is a summary of nonperforming assets at
September 30, 1995 and 1994. The income effect of interest
foregone on these assets is not material. The Corporation
did not have any loans with reduced interest rates because of
troubled debt restructuring, foreign loans, or loans for
highly leveraged transactions. Management is not aware of
any situation, other than those included in the summary
below, where known information about a borrower would require
disclosure as a potential problem loan.
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Nonaccrual loans $ 407,909 $461,638
Loans past due ninety days or more 39,008 220,417
Other real estate owned 6,500 152,038
Total nonperforming assets $ 453,417 $834,093
</TABLE>
NOTE 4: INCOME TAXES
The significant components of the Corporation's deferred tax
assets and (liabilities) recorded pursuant to Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes," and included in other assets in the consolidated
balance sheet as of September 30, are as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Deferred tax liabilities:
Tax depreciation over book ($499,063) ($530,450)
Net unrealized gain SFAS 115 (79,966) 0
Other, net (151,839) (39,390)
Total deferred tax liabilities (730,868) (569,840)
Deferred tax assets:
Allowance for loan losses 687,819 555,154
Deferred loan fees and costs 244,466 207,589
Deferred compensation 167,487 0
Net unrealized loss SFAS 115 0 173,920
Other, net 105,972 134,736
Total deferred tax assets 1,205,744 1,071,399
Net deferred tax asset $474,876 $501,559
</TABLE>
<PAGE>
ANCHOR FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5: LONG-TERM DEBT
Long-term debt at September 30 is summarized as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Parent Company:
8.60% subordinated notes due in 2003 <F2> $5,000,000 $5,000,000
Subsidiaries:
6.08% Federal Home Loan Bank advance due
in 2000 5,000,000 0
7.21% Federal Home Loan Bank advance due
in 2005 5,000,000 0
Total long-term debt $15,000,000 $5,000,000
<F2> Debt qualifies for inclusion in the determination of
total capital under the Risk-Based Capital Guidelines.
</TABLE>
The principal maturity of long-term debt for the next five
years subsequent to September 30, 1995 is $5,000,000 in 2000.
NOTE 6: PER SHARE DATA
Earnings per share are computed by dividing net income for each
period by the weighted average number of shares outstanding
during each period. The effect of outstanding stock options is
not material to the weighted average number of common shares
outstanding or earnings per share and has not been included in
the calculation.
NOTE 7: IMPAIRED LOANS
Effective January 1, 1995, the Corporation adopted SFAS No.
114, which requires loans to be measured for impairment when
it is probable that all amounts, including principal and
interest, will not be collected in accordance with the
contractual terms of the loan agreement. The Corporation
defines impaired loans as nonaccrual commercial loans. The
adoption of SFAS No. 114 did not have a material effect on the
Corporation's financial position or operating results. In
addition, adopting SFAS No. 114 had no impact on the overall
reserve for loan losses and did not affect the Corporation's
charge-off or income recognition policies.
<PAGE>
NOTE 8: OTHER MATTERS
At September 30, 1995, outstanding standby letters of credit
totaled $237,451.
For the nine months ended September 30, 1995 and 1994, the
Corporation paid interest of $9,711,687 and $6,527,042
respectively. The Corporation paid income taxes of $1,151,242
during the first nine months of 1995 and $1,485,787 during the
same period in 1994.
<PAGE>
Management's Discussion and Analysis
Net Income
Net income for the third quarter of 1995 was $946,353, a decrease of
$579,849 or 38.0% from the $1,526,202 for the same period in 1994. Net
income per share for the third quarter decreased 38.0% from $0.60 in
1994 to $0.37 in 1995. Excluding securities gains, net income
increased $319,005 or 35.5%.
The primary factors affecting the increase in net income excluding
securities gains were an increase of $591,641 in net interest income
and decreases in the provision for loan losses of $254,000 and the
provision for income taxes of $333,116. Excluding securities gains,
these positive factors were partially offset by a decrease of $29,361
in noninterest income and an increase in noninterest expense of
$324,785.
Net income for the nine months ended September 30, 1995 was
$2,633,757, a decrease of $312,763 or 10.6% from the $2,946,520 for the
same period in 1994. Net income per share for this period decreased
10.7% from $1.16 in 1994 to $1.04 in 1995. Excluding securities gains,
net income increased $736,811 or 68.7%.
The primary factor affecting the increase in net income excluding
securities gains was an increase of $2,104,291 in net interest income
and decreases in the provision for loan losses of $234,500 and the
provision for income taxes of $138,265. Excluding securities gains,
these positive factors were partially offset by a decrease of $141,456
in noninterest income and an increase in noninterest expense of
$1,008,403.
On August 14, 1995, the Board of Directors of Anchor Financial
Corporation (the "Corporation") approved a two-for-one stock split
payable on September 29, 1995 to shareholders of record on September 1,
1995. Prior to the two-for-one split, the Corporation had 4,000,000
shares of common stock authorized, $6.00 par value per share, of which
1,270,210 shares were issued and outstanding, and 136,786 shares were
subject to options. After the two-for-one stock split, the Corporation
has 4,000,000 shares of common stock authorized, $6.00 par value per
share, of which 2,540,420 shares are issued and outstanding, and
273,572 shares are subject to options. All financial statement
information presented in this report has been restated to reflect the
two-for-one stock split.
Annualized return on average total assets for the third quarter of
1995 was 0.95% compared with 1.72% in 1994. For the nine months ended
September 30, 1995, annualized return on average total assets was 0.94%
compared with 1.21% in 1994. Annualized return on average stockholders'
equity for the third quarter of 1995 was 13.38% compared with 23.73% in
1994. For the nine months ended September 30, 1995, annualized return
on average stockholders' equity was 12.83% compared with 15.93% for the
same period in 1994.
Net Interest Income
Net interest income, the major component of the Corporation's net
income, was $4,340,534 for the third quarter of 1995, an increase of
$591,641 or 15.8% from the $3,748,893 reported for the same period in
1994. This increase was primarily attributable to the increased volume
of earning assets during the period and an increase in the tax
equivalent net yield on earning assets from 4.67% in 1994 to 4.79% in
1995. The increased volume of earning assets was primarily the result
of quality loan demand and strong deposit growth.
<PAGE>
Interest income increased $1,699,391 or 27.2% for the three months
ended September 30, 1995 compared with the same period in 1994. The
increase was due to an increase in the volume of earning assets and the
yield on earning assets which increased from 7.77% in 1994 to 8.74% in
1995. Average loans increased $43.7 million or 19.8% and average
investment securities decreased slightly during the third quarter of
1995 compared with the same period in 1994. Average interest earning
assets represented 91.3% of average total assets during the third
quarter of 1995 compared with 91.0% in 1994. The composition of
average interest-earning assets changed slightly as the percentage of
average loans to average interest-earning assets increased from 68.9%
in 1994 to 73.0% in 1995.
Interest expense increased $1,107,750 or 44.4% for the three months
ended September 30, 1995 compared with the same period in 1994. The
increase in interest expense was due to an increase in the volume of
average interest-bearing liabilities and the rate paid on these funds
during the period. Average interest-bearing liabilities increased
$33.4 million or 12.6% for the third quarter of 1995 compared with the
same period in 1994. The rate paid on average interest-bearing
liabilities increased from 3.75% for the three months ended September
30, 1994 to 4.80% in 1995. Average interest-bearing liabilities
represented 82.2% of funding sources during the third quarter of 1995
compared with 82.6% in 1994.
For the nine months ended September 30, 1995, net interest income
increased $2,104,291 or 20.5% from the same period in 1994. The
primary reason for this increase was the increased volume of earning
assets during the period and an increase in the tax equivalent net
yield on earning assets from 4.69% for the first nine months of 1994 to
4.88% for the same period in 1995. The increase in net yield during
the nine month period primarily reflects the Corporation's favorable
position during a period of rising interest rates. The increased
volume of earning assets was primarily the result of quality loan
demand and strong deposit growth.
Interest income increased $5,547,039 or 33.1% for the nine months
ended September 30, 1995 compared with the same period in 1994. The
increase was due to an increase in the yield on earning assets which
increased from 7.65% in 1994 to 8.79% in 1995. Average loans increased
$38.2 million or 17.6% and average investment securities increased $9.7
million or 14.5% for the nine months ended September 30, 1995 compared
with the same period in 1994. Average interest-earning assets
represented 91.3% of average total assets during the nine months ended
September 30, 1995 versus 90.5% in 1994. The composition of average
interest-earning assets changed slightly as the percentage of average
loans to average interest-earning assets increased from 74.0% in 1994
to 75.2% in 1995.
Interest expense increased $3,442,748 or 53.0% for the nine months
ended September 30, 1995 compared with the same period in 1994. The
increase in interest expense was due to an increase in the volume of
average interest-bearing liabilities and the rate paid on these funds
during the period. Average interest-bearing liabilities increased $37.0
million or 15.0% for the nine months ended September 30, 1995 compared
with the same period in 1994. The rate paid on average interest-
bearing liabilities increased from 3.53% for the nine months ended
September 30, 1994 to 4.70% in 1995. Average interest-bearing
liabilities represented 83.2% of funding sources during the nine months
ended September 30, 1995 compared with 83.6% in 1994.
<PAGE>
Provision for Loan Losses
A $206,000 provision for loan losses was made during the third
quarter of 1995 compared with a provision of $460,000 in 1994. The
provision for loan losses for the nine months ended September 30, 1995
was $455,500 versus $690,000 for the same period in 1994. The
provision for loan losses was lower for each period primarily due to
lower net charge-offs realized during 1995 and a lower percentage of
nonperforming loans.
At September 30, 1995 and 1994 the ratio of annualized net charge-
offs to average loans was 0.18% and 0.21%, respectively. The ratio of
nonperforming assets to total loans and other real estate owned was
0.17% at September 30, 1995 compared with 0.37% at September 30, 1994.
The reserve for loan losses at September 30, 1995 represented 1.11%
of total loans outstanding compared with 1.18% at December 31, 1994.
Based on the current evaluation of the loan portfolio, management
believes the reserve at September 30 is adequate to cover potential
losses in the portfolio.
Noninterest Income
Noninterest income for the third quarter of 1995 decreased
$1,433,821 or 65.5% from the same period in 1994. Noninterest income
excluding investment securities gains for the third quarter of 1995
decreased $29,361 or 3.7% from the same period in 1994. The primary
reasons for this decrease were declines in gains on sales of mortgage
loans of $21,170 or 22.4% and trust income of $39,723 or 41.0%.
Noninterest income for the nine months ended September 30, 1995
decreased $1,781,416 or 45.0% from the same period in 1994.
Noninterest income excluding investment securities gains for the nine
months ended September 30, 1995 decreased $141,456 or 6.2% from the
same period in 1994. The primary reason for this decrease was a decline
in gains on sales of mortgage loans of $150,242 or 42.8%. Service
charges on deposit accounts decreased $38,675 or 3.3%.
Gains on sales of mortgage loans decreased during 1995 primarily due
to lower refinancing activity. Service charges on deposit accounts
were lower in 1995 primarily because of a higher interest rate
environment and stable prices.
During the second quarter of 1994, the Corporation received common
stock in a publicly traded company in exchange for certain securities
of unknown value that it had previously received by order of the U.S.
Bankruptcy Court in lieu of debt charged-off in 1990. An orderly sale
of the stock over time resulted in the Corporation making a substantial
recovery of the funds charged-off. During the third quarter of 1994,
the Corporation realized a before tax gain of approximately $1,444,000
from the sale of a portion of these securities. The total realized
gain on these securities before taxes was $1,719,038 for the nine
months ended September 30, 1994.
Noninterest Expense
Noninterest expense for the third quarter of 1995 increased $324,785
or 10.5% from the same period in 1994. For the nine months ended
September 30, 1995, noninterest expense increased $1,008,403 or 11.2%
from the same period in 1994.
<PAGE>
These increases were primarily the result of increased salaries and
employee benefits, occupancy expense, and other operating expense
caused by the significant growth of the Corporation during the last
year. The Federal Deposit Insurance Corporation reduced the insurance
premium from $0.23 per $100 of deposits to $0.04 per $100 of deposits,
effective June 1, 1995. The Corporation received a refund of
approximately $195,000 for premiums it had paid in 1995.
Income Taxes
The provision for income taxes for the third quarter of 1995
decreased $333,116 or 39.1% from the same period in 1994. For the nine
months ended September 30, 1995, the provision decreased $138,265 or
8.8% from the same period in 1994. The provision for income taxes
decreased in 1995 primarily due to lower income before taxes since tax
rates remained approximately the same as 1994.
Financial Position
For the third quarter of 1995, average total assets increased 12.6%
while average deposits increased 9.8% from the third quarter of 1994.
For the nine months ended September 30, 1995, average total assets
increased 14.6% while average deposits increased 13.0 % from the same
period in 1994.
Due to the seasonal nature of the Myrtle Beach and Hilton Head
Island market areas, deposit growth is strong during the summer months
and loan demand usually reaches its peak during the winter months.
Thus, the Corporation historically has a more favorable liquidity
position during the summer months. To meet loan demand and liquidity
needs during the winter months, the Corporation typically invests
sizable amounts of its deposit growth during the summer months in
temporary investments and short-term securities maturing in the winter
months. Additionally, the Corporation has access to other funding
sources including federal funds purchased from correspondent banks, a
line of credit with the Federal Home Loan Bank, and a seasonal
borrowing privilege from the Federal Reserve Bank.
The Corporation utilizes long-term advances from the Federal Home
Loan Bank ("FHLB") as part of its funding strategy. FHLB advances
totaled $10,000,000 at September 30, 1995 versus none at September 30,
1994.
The Corporation continues to have a strong capital position by
industry standards with the ratio of average stockholders' equity to
average total assets for the first nine months of 1995 being 7.4%
versus 7.6% for the same period in 1994. At September 30, 1995, the
total risk-based capital ratio was 12.9% compared with 13.5% at
December 31, 1994. The leverage ratio at September 30, 1995 was 6.6%
compared with 6.9% at December 31, 1994.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material legal proceedings.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) 27 Financial Data Schedule (for SEC purposes only)
(b) A report on Form 8-K dated August 14, 1995 was filed with the
Securities and Exchange Commission on August 14, 1995. On
August 14, 1995, the Board of Directors of Anchor Financial
Corporation (the "Corporation") approved a two-for-one stock
split payable on September 29, 1995 to shareholders of record
on September 1, 1995.
<PAGE>
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.
/s/ Stephen L. Chryst
Stephen L. Chryst, President and
Chief Executive Officer
/s/ Tommy E. Looper
Tommy E. Looper, Executive Vice
President and Chief Financial
Officer
Date : November 10, 1995
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 16,937,039
<INT-BEARING-DEPOSITS> 99,000
<FED-FUNDS-SOLD> 14,425,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 52,637,509
<INVESTMENTS-CARRYING> 32,924,483
<INVESTMENTS-MARKET> 32,881,489
<LOANS> 263,688,249
<ALLOWANCE> 2,915,985
<TOTAL-ASSETS> 398,467,580
<DEPOSITS> 350,122,467
<SHORT-TERM> 3,056,368
<LIABILITIES-OTHER> 2,675,950
<LONG-TERM> 15,000,000
<COMMON> 15,242,520
0
0
<OTHER-SE> 12,370,275
<TOTAL-LIABILITIES-AND-EQUITY> 398,467,580
<INTEREST-LOAN> 18,550,502
<INTEREST-INVEST> 3,403,426
<INTEREST-OTHER> 346,828
<INTEREST-TOTAL> 22,300,756
<INTEREST-DEPOSIT> 9,135,728
<INTEREST-EXPENSE> 9,938,219
<INTEREST-INCOME-NET> 12,362,537
<LOAN-LOSSES> 455,500
<SECURITIES-GAINS> 36,884
<EXPENSE-OTHER> 10,017,055
<INCOME-PRETAX> 4,065,418
<INCOME-PRE-EXTRAORDINARY> 2,633,757
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,633,757
<EPS-PRIMARY> 1.04
<EPS-DILUTED> 1.04
<YIELD-ACTUAL> 4.88
<LOANS-NON> 407,909
<LOANS-PAST> 39,008
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<ALLOWANCE-OPEN> 2,795,941
<CHARGE-OFFS> 395,731
<RECOVERIES> 60,275
<ALLOWANCE-CLOSE> 2,915,985
<ALLOWANCE-DOMESTIC> 2,415,985
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 500,000
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