<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
------------------
Commission file number 0-133312
--------
THE FIRST JERMYN CORP.
----------------------
(Exact name of small business issuer as specified in its charter)
Pennsylvania 23-2275242
- ------------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
645 Washington Avenue; P.O. Box 39; Jermyn Pennsylvania 18433-0039
- ------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number 717-876-6500
------------
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 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
-- --
State the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Class Outstanding at October 20, 1995
----- -------------------------------
<S> <C>
Common stock, $1.25 par value 884,680
</TABLE>
<PAGE> 2
THE FIRST JERMYN CORP. AND SUBSIDIARIES
FORM 10-QSB
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED):
Consolidated Balance Sheets - September 30, 1995 and
December 31, 1994 1
Consolidated Statements of Income - Three Months and Nine Months
Ended September 30, 1995 and 1994 2
Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1995 and 1994 3
Notes to Consolidated Financial Statements 4
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
PART II - OTHER INFORMATION 11
SIGNATURES 12
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
THE FIRST JERMYN CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands of dollars, except per share information)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
September 30, December 31,
ASSETS 1995 1994
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash and due from banks $ 6,740 10,659
Federal funds sold 7,425 ---
Securities available for sale 15,303 15,971
Mortgage backed securities available for sale 22,435 14,267
Investment securities (total market value - 1995 - $70,097, 1994 - $60,662) 68,946 62,226
Loans, gross 171,216 168,808
Less: Unearned discount and origination fees (1,188) (1,296)
Allowance for loan losses (3,007) (2,835)
- -------------------------------------------------------------------------------------------------------------------------
Loans, net 167,021 164,677
Accrued interest receivable 2,752 2,191
Bank premises, leasehold improvements and furniture and equipment -net 5,030 4,719
Real estate owned other than bank premises 277 574
Other assets 2,357 2,731
- -------------------------------------------------------------------------------------------------------------------------
Total assets $ 298,286 278,015
=========================================================================================================================
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------
Deposits:
Noninterest-bearing demand $ 26,128 26,439
Interest-bearing 244,201 224,403
- -------------------------------------------------------------------------------------------------------------------------
Total deposits 270,329 250,842
- -------------------------------------------------------------------------------------------------------------------------
Federal funds purchased --- 1,900
Capitalized lease obligation 907 954
Accrued interest payable 1,160 732
Other liabilities 156 423
- -------------------------------------------------------------------------------------------------------------------------
Total liabilities 272,552 254,851
- -------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
- ------------------------------------------------------------------------------------------------------------------------
Common stock, $1.25 par value, authorized 2,500,000 shares;
Outstanding 899,885 shares 1,125 1,125
Surplus 3,876 3,876
Retained earnings 21,541 19,708
Unrealized loss on securities available for sale, net of tax (612) (1,349)
Less treasury stock-at cost (15,205 shares) (196) (196)
- -------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 25,734 23,164
- -------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 298,286 278,015
=========================================================================================================================
</TABLE>
*The accompanying notes are an integral part of the consolidated financial
statements.
1
<PAGE> 4
THE FIRST JERMYN CORP. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands of dollars, except per share information)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Three months Nine months
Ended September 30 Ended September 30
1995 1994 1995 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans 3,691 3,316 10,948 9,582
interest and dividends on securities
U.S. Treasury 1,200 1,052 3,565 3,021
U.S. government agencies 2 1 4 4
CMO's of U.S. government agencies
and corporations 350 180 839 428
State and political subdivisions 87 33 162 49
Other taxable debt 11 8 35 31
Taxable equity 3 2 7 7
Interest on federal funds sold 98 33 224 101
- -------------------------------------------------------------------------------------------------------------------
Total interest income 5,442 4,625 15,784 13,223
- -------------------------------------------------------------------------------------------------------------------
Interest expense:
Deposits 2,707 1,825 7,424 5,077
Federal funds purchased 0 1 1 4
Capitalized lease obligations 23 26 69 75
- -------------------------------------------------------------------------------------------------------------------
Total interest expense 2,730 1,852 7,494 5,156
- -------------------------------------------------------------------------------------------------------------------
Net interest income 2,712 2,773 8,290 8,067
Provision for loan losses 92 46 273 408
- -------------------------------------------------------------------------------------------------------------------
Net interest income after provision for
loan losses 2,620 2,727 8,017 7,659
- -------------------------------------------------------------------------------------------------------------------
Noninterest income:
Service charges and fees 135 105 384 309
Other 36 13 60 33
- -------------------------------------------------------------------------------------------------------------------
Total noninterest income 171 118 444 342
- -------------------------------------------------------------------------------------------------------------------
Noninterest expense:
Salaries and benefits 832 763 2,414 2,259
Net occupancy and furniture/
equipment expenses 272 241 740 710
Data processing services 122 102 343 319
FDIC insurance (16) 134 262 398
Other expenses 449 474 1,358 1,381
- -------------------------------------------------------------------------------------------------------------------
Total noninterest expense 1,659 1,714 5,117 5,067
- -------------------------------------------------------------------------------------------------------------------
Income before federal income tax provision 1,132 1,131 3,344 2,934
Federal income tax provision 338 341 1,025 919
- -------------------------------------------------------------------------------------------------------------------
Net income 794 790 2,319 2,015
===================================================================================================================
Per share information:
Net income $.90 $.90 $2.62 $2.28
Weighted average shares outstanding 884,680 884,680 884,680 884,680
===================================================================================================================
</TABLE>
*The accompanying notes are an integral part of the consolidated financial
statements.
2
<PAGE> 5
THE FIRST JERMYN CORP. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands of dollars)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Nine months ended September 30,
1995 1994
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating activities:
Net income $2,319 $2,015
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for loan losses 273 408
Depreciation and amortization of investment securities, bank
premises, leasehold improvements and furniture and equipment 333 332
Increase in interest receivable and other assets (567) (1,287)
Increase in interest payable and other liabilities 161 136
Other 1 1,016
- ------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 2,520 2,620
- ------------------------------------------------------------------------------------------------------------------------
Investing activities:
Purchases of securities (26,762) (26,036)
Proceeds from maturities of securities 13,659 17,719
Net (increase) decrease in loans (2,817) 966
Purchases of bank premises, leasehold improvements and
furniture and equipment-net (644) (117)
Proceeds from sales of assets acquired through foreclosure 497 --
Proceeds from sales of equipment -- 38
- ------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (16,067) (7,430)
- ------------------------------------------------------------------------------------------------------------------------
Financing activities:
Net increase in noninterest-bearing demand deposits
and interest-bearing deposits 19,487 5,662
Repayment of federal funds purchased (1,900) --
Principal payments on capitalized lease obligation (47) (43)
Dividends paid (487) (443)
- ------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 17,053 5,176
- ------------------------------------------------------------------------------------------------------------------------
Increase in cash and cash equivalents 3,506 366
Cash and cash equivalents at beginning of period 10,659 10,935
- ------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $14,165 $11,301
========================================================================================================================
Cash paid during the period:
Interest $ 7,066 $ 4,941
Taxes $ 952 $ 858
========================================================================================================================
Noncash transactions
Transfer of loans to real estate owned $ 200 $ 271
Change in unrealized loss on securities available for sale, net of tax $ 737 $ 984
========================================================================================================================
</TABLE>
*The accompanying notes are an integral part of the consolidated financial
statement.
3
<PAGE> 6
FIRST JERMYN CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (unaudited)
- ----------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying consolidated financial statements were prepared in
accordance with instructions to Form 10-QSB, and therefore, do not
include information or footnotes necessary for a complete presentation
of financial position, results of operations and cash flows in
conformity with generally accepted accounting principles. However,
all normal, recurring adjustments which, in the opinion of management,
are necessary for a fair presentation of the financial statements,
have been included. These financial statements should be read in
conjunction with the audited financial statements and the notes
thereto included in the Bank's Annual Report for the period ended
December 31, 1994. The results for the nine months ended September
30, 1995 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1995.
BUSINESS
The Company's principal subsidiary, The First National Bank of Jermyn,
conducts business from its branch bank system located in Lackawanna
County, Pennsylvania. The Bank is subject to competition from other
financial institutions and other companies which provide financial
services. The Bank is subject to the regulations of certain federal
agencies and undergoes periodic examinations by those regulatory
authorities.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of all of
the Company's wholly-owned subsidiaries. All significant intercompany
transactions have been eliminated in consolidation. Additionally,
certain reclassifications have been made in order to conform with the
current year's presentation. The accompanying consolidated financial
statements have been prepared on an accrual basis.
(2) EARNINGS PER SHARE
Earnings per share was $.90 and $2.62 for the three-month and nine
month periods ended September 30, 1995 as compared to $.90 and $2.28
for the three month and nine month periods ended September 30, 1994.
Earnings per share was computed based on the weighted average number
of shares outstanding during each period.
4
<PAGE> 7
(3) RECENT ACCOUNTING PRONOUNCEMENTS
In October 1994, the FASB issued SFAS No. 118, Accounting by Creditors
for Impairment of a Loan - Income Recognition and Disclosures (SFAS
No. 118), which amends SFAS No. 114 and requires certain related
disclosures. Both SFAS No. 114 and 118 were effective for the
Company beginning January 1, 1995 and have been reflected
prospectively from that date. The implementation of these statements
did not have a material effect on the Company's results of operations
or financial condition. As of September 30, 1995, the Company had no
impaired loans. For purposes of applying the measurement criteria for
impaired loans under SFAS No. 114, as amended, the Company excludes
large groups of smaller-balance homogeneous loans, primarily
consisting of residential real estate loans and consumer loans, as
well as commercial, financial, and agricultural loans with balances
less than $100,000. For applicable loans, the Company evaluates the
need for impairment recognition when a loan becomes nonaccrual, or
earlier, based on management's assessment of the relevant facts and
circumstances. The Company's policy for the recognition of interest
income on impaired loans is the same as for nonaccrual loans. Cash
receipts on impaired loans are not recognized as income, but are
applied to principal. Impaired loans are charged off when the Company
determines that principle and interest are no longer deemed
collectible.
In March 1995, the FASB issued SFAS No. 121, Accounting for the
Impairment of Long-lived Assets and for Long-Lived Assets to be
Disposed of. This statement requires that long-lived assets and
certain identifiable intangibles to be held and used by an entity be
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable,
and that any related impairment be based on the fair value of the
asset. In addition, long-lived assets to be disposed of must
generally be reported at the lower of carrying amount or fair value,
less cost to sell. SFAS No. 121 is required to be adopted by the
Company in 1996. Management does not expect the adoption of this
statement to materially effect the Company's results of operations or
financial condition.
In May 1995, the FASB issued SFAS No. 122, Accounting for Mortgage
Servicing Rights and Excess Servicing Receivables and for
Securitization of Mortgage Loans. This statement will prospectively
require the Company, which services mortgage loans for others in
return for a fee, to recognize these servicing assets, regardless of
how they were acquired. Additionally, the Company will be required to
assess the fair value of the assets at each reporting date to
determine impairment. SFAS No. 122 is required to be adopted by the
Company in 1996. Management does not expect the adoption of this
statement to materially effect the Company's results of operations or
financial condition.
In October 1995, the FASB issued SFAS No. 123, Accounting for
Stock-based Compensation. This statement encourages the adoption of
fair value accounting for stock options issued to employees. Further,
in the event that fair value accounting is not adopted, the statement
requires proforma disclosure of net income and earnings per share as
if fair value accounting had been adopted. SFAS No. 123 is required
to be adopted by the Company in 1996. Management expects that it will
not adopt fair value accounting for stock options issued to employees
and, therefore, does not expect the adoption of this statement to
materially effect the Company's results of operation or financial
condition.
- -------------------------------------------------------------------------------
5
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
The Company's net income for the three month and nine month periods ended
September 30, 1995 was $794,000 and $2,319,000 or $.90 and $2.62 per share
compared to $790,000 and $2,015,000 or $.90 and $2.28 in the same three month
and nine-month periods in the preceding year. The increase in net income is
primarily attributable to the increase in net interest income combined with a
decrease in the provision for loan losses.
At September 30, 1995, the Company had total assets of $298 million compared to
$278 million at December 31, 1994. The growth in total assets substantially
consists of growth in the securities portfolio and federal funds sold which
were funded by deposit growth.
The Company improved on certain ratios that measure overall profitability,
namely, return on average assets and return on average equity. The Company
recorded an annualized return on average assets of 1.08% for the nine-month
period ending September 30, 1995, compared to 1.02% for the same period in
1994. Return on average equity of 12.78% was recorded for the nine-month
period ended September 30, 1995, compared to 11.83% for the same period in
l994.
The Company continues to build its allowance for loan losses, providing $92,000
and $273,000 for the three-month and nine-month periods ended September 30,
1995, which increased the allowance for loan losses to $3,007,000 at September
30, 1995 from $2,835,000 at December 31, 1994.
Strategies to enhance earnings and improve the interest rate exposure of the
Company will be considered, such as the sale of existing mortgage-related
securities and purchasing higher yielding, rate sensitive assets with the
proceeds. The Company will also increase market penetration through branch
expansion. The branch expansion has begun with the acquisition of a bank
building in Carbondale. The Company plans to open this branch in December
1995. Additionally, the Company will be seeking to enhance its net interest
margin by increasing the higher yielding loan portfolio with the cash flows
from the repayments on the mortgage-related and investment securities
portfolios.
FINANCIAL CONDITION
CASH AND DUE FROM BANKS AND FEDERAL FUNDS SOLD
Cash and due from banks declined to approximately $6.7 million at September 30,
1995 from $10.7 million at December 31, 1994 due to normal fluctuations
resulting from the conduct of customer business. Federal funds sold increased
to $7.4 million at September 30, 1995 from zero at December 31, 1994 as the
company experienced increased liquidity resulting from growth in deposits.
SECURITIES AVAILABLE FOR SALE
Securities available for sale, including mortgage backed securities, as well as
investment securities, have increased $14.2 million or 15% to $106.7 million
from $92.5 million at December 31, 1994. This increase was primarily driven by
the purchase of $8 million dollars of variable rate mortgage backed securities
available for sale and $6.4 million of municipal bonds held as investment
securities. This increase was funded by the related increase in savings
deposits.
6
<PAGE> 9
LOANS RECEIVABLE, NET
Aggregate loans receivable totaled $167.0 million at September 30, 1995, an
increase of $2.3 million or 1.4% from $164.7 million at December 31, 1994. The
mix of loans is substantially unchanged at those dates.
NON-PERFORMING ASSETS
The Company's total non-performing assets decreased from $3.8 million or l.36%
of total assets at December 31, 1994 to $3.2 million or l.08% of total assets
at September 30, 1995. At September 30, 1995, the Company's non-accrual loans
were $2.3 million, a decrease of $771,000 or 25% under that of December 31,
1994. The most significant transaction in the nonaccrual portfolio was the
full collection of a $1.1 million nonaccrual commercial loan in the third
quarter of 1995. The decrease in nonaccrual loans was offset by an increase of
$777,000 in loans greater than ninety days delinquent but still accruing from
$l85,000 at December 31, 1994 to $962,000 at September 30, 1995. This increase
was due to one well secured residential loan for $455,000 and a number of
smaller well secured credits.
Real estate owned, net decreased $297,000 or 51.7% from $574,000 as of December
31, 1994 to $ 277,000 as of September 30, 1995, due to continued sales of
properties. There were no significant gains or losses on the sale of real
estate owned.
<TABLE>
<CAPTION>
9/30/95 9/30/94
------- -------
<S> <C> <C>
Nonaccrual 2,272,000 3,147,000
Loans 90 days or more delinquent 962,000 89,000
Restructured --- ---
---------- ---------
Total non-performing loans $3,234,000 $3,236,000
Other real estate owned other than
Bank premises 277,000 543,000
------- -------
Total $3,511,000 $3,779,000
</TABLE>
The comparability of the above information was not affected by the adoption of
SFAS No. 114. There are no impaired loans under SFAS No. 114 which are not
included in the above table.
At September 30, 1995, the Company's allowance for loan losses amounted to
$3.01 million or 1.76% of gross loans receivable. At December 31, 1994, the
Company's allowance for loan losses was $2.84 million or l.68% of gross loans
receivable.
7
<PAGE> 10
DEPOSITS
Deposits increased $19.5 million or 7.8% from $250.8 million at December 31,
1994 to $270.3 million at September 30, 1995. The increase in deposits was
primarily due to an increase in certificates of deposit from the local market.
The Company believes this increase is due to the Bank's competitive rates.
EQUITY
At September 30, 1995, total equity was $25.7 million or 8.6% of total assets
compared to $23.2 million or 8.3% of total assets as of December 31, 1994.
Total equity increased primarily due to the retention of net income during the
intervening period less dividends paid.
RESULTS OF OPERATIONS
NET INCOME
The Company's net income increased $4,000 to $794,000 for the three months
ended September 30, 1995, compared to $790,000 recorded in the comparable
period of the prior year. For the nine-month period ended September 30, 1995,
net income increased $304,000 or approximately 15% compared to $2,015,000 for
the nine-months ended September 30, 1994. Earnings for the nine-month period
of 1995 have improved primarily due to increased net interest income, a reduced
provision for loan losses, an increase in noninterest income related to higher
service charges, and a decrease in noninterest expense related to lower FDIC
insurance premiums.
NET INTEREST INCOME
Net interest income before provision for loan losses amounted to $2.71 million
for the three-month period ended September 30, 1995, which represents a $61,000
or 2.2% decrease from the $2.77 million recorded in the comparable prior
period. Net interest income before provision for loan losses amounted to $8.3
million for the nine-month period ended September 30, 1995, which represents an
increase of $200,000 or 2.5% from the $8.1 million recorded in the comparable
prior period. The increase in net interest income was primarily due to the
increase in interest earning assets.
PROVISION FOR LOAN LOSSES
The Company establishes a provision for loan losses, which is charged to
operations, in order to maintain the allowance for loan losses at a level which
is deemed to be appropriate based upon an assessment of prior loss experience,
the volume and type of lending presently being conducted by the Company,
industry standards, past due loans, economic conditions in the Company's market
area generally and other factors related to the collectability of the Company's
loan portfolio. For the three month and nine month periods ended September 30,
1995, the provision for loan losses amounted to $92,000 and $273,000. This
represents an increase of $46,000 for the three months ended September 30, 1995
compared to 1994. However, for the nine months ended September 30, 1995 a
decrease of $135,000 in the provision for loan losses was noted when compared
to the corresponding period of the previous year. The overall decrease in the
provision was a result of the Company's improvement in asset quality from
September 30, 1994 to September 30, 1995.
8
<PAGE> 11
Although management utilizes its best judgment in providing for possible
losses, there can be no assurance that the Company will not have to increase
its provision for loan losses in the future as a result of the future increases
in non-performing loans or for other reasons which could adversely affect the
Company's results of operations. In addition, various regulatory agencies, as
an integral part of their examination process, periodically review the
allowance for loan losses. Such agencies may require the Company to recognize
additions to the allowance for loan losses based on their judgments of
information which is available to them at the time of their examination.
NONINTEREST INCOME
Noninterest income for the three month and nine-month periods ending September
30, 1995 increased approximately $53,000 and $102,000 respectively from the
comparable prior periods, due to increased service charges and fees. Service
charges and fees have benefited from an increase in rates charged by the Bank.
Other non-interest income consists principally of safe deposit box rental and
increased in 1995 due to the addition of gain on sale of loans and other real
estate rentals.
NONINTEREST EXPENSES
Noninterest expenses for the three month period ending September 30, 1995
decreased approximately 3% from the comparable prior period, with the
biggest decrease occurring in FDIC insurance. During the third quarter of
1995, the FDIC determined that the Bank Insurance Fund was over capitalized and
therefore, a refund of premiums was distributed to the Company. The Company
expects to experience reduced FDIC insurance costs for the foreseeable future.
INCOME TAXES
Income tax expense totaled $338,000 and $1,025,000 for the three-month and
nine-month periods ended September 30, 1995 compared to $341,000 and $919,000
for the comparable prior periods. These amounts resulted in effective tax
rates of 30% and 31%, respectively. The increase in tax expense during the
nine-month period ending September 30, 1995 was due to an increase in income
before the federal income tax provision. The effective tax rate declined
slightly due primarily to an increase in tax-exempt income.
CAPITAL ADEQUACY
A strong capital position is important to the continued profitability of the
Company and promotes depositor and investor confidence. The Company's capital
consists of shareholders' equity, which provides a basis for future growth and
expansion and also provides a buffer against unexpected losses. Shareholders'
equity increased $2,570,000 to $25,734,000 at September 30, 1995, as a result
of income retained during the nine-months ended September 30, 1995 and a
reduction in the net unrealized loss on securities available for sale. It is
management's intention to continue paying a reasonable return on shareholders'
investment while retaining adequate earnings to allow for continued growth.
The Federal Reserve Board measures capital adequacy for bank holding companies
by using a risk-based capital frame-work and by monitoring compliance with
minimum leverage ratio guidelines. The minimum ratio of total risk-based
capital to risk-adjusted assets is 8% at September 30, 1995, of which 4% must
be Tier 1 capital. The Company's total risk-based capital ratio was 17.83% at
September 30, 1995. The Company's Tier 1 risk-based capital ratio was 16.57%
at September 30, 1995.
9
<PAGE> 12
In addition, the Federal Reserve Board has established minimum leverage ratio
guidelines for bank holding companies. Those guidelines provide for a minimum
leverage ratio of 3% for bank holding companies that meet certain criteria,
including that they maintain the highest regulatory rating. All other bank
holding companies are required to maintain a leverage ratio of 3% plus an
additional cushion of at least 100 to 200 basis points. The Federal Reserve
Board has not advised the Company of any specific minimum leverage ratio
applicable to it. The Company's leverage ratio was 8.87% at September 30,
1995.
In December 1991, the Federal Deposit Insurance Corporation Improvement Act
(FDICIA) was enacted, which substantially revises the bank regulatory and
funding provisions of the Federal Deposit Insurance Act and makes revisions to
several other federal banking statutes.
The Act establishes minimum capital requirements for all depository
institutions and established five capital tiers: "well capitalized",
"adequately capitalized", "under-capitalized", "significantly
under-capitalized", and "critically under-capitalized". FDICIA imposes
significant restrictions on the operations of a bank which is not at least
adequately capitalized. A depository institutions' capital tier will depend
upon where its capital levels are in relation to various other capital measures
which include a risk-based capital measure, a leverage ratio capital measure
and other factors. Under regulations adopted, for an institution to be well
capitalized it must have a total risk-based capital ratio of at least 10%, a
Tier I risk-based capital ratio of at least 6%, and a Tier I leverage ratio of
at least 5%, and not be subject to any specific capital order or directive.
At September 30, 1995, the Bank's total risk-based capital, Tier I risk-based
capital and Tier I leverage ratios were 17.83%, 16.57% and 8.87%, respectively.
10
<PAGE> 13
FIRST JERMYN CORP. AND SUBSIDIARIES
September 30, 1995
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
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): Exhibits:
None
(b): Reports on Form 8-K:
None
11
<PAGE> 14
FIRST JERMYN CORP. AND SUBSIDIARIES
September 30, 1995
SIGNATURES
In accordance with requirement of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
THE FIRST JERMYN CORP.
----------------------
(Registrant)
Date November 06, 1995 By /s/ William M. Davis
----------------- ----------------
William M. Davis
Chairman, President and Director
(Principal Executive Officer)
Date November 06, 1995 By /s/ Martha Myshak
----------------- ---------------------------
Martha Myshak
(Principal Financial Officer and
Treasurer)
Date November 06, 1995 By /s/ Donald J. Gibbs
----------------- ----------------------------
Donald J. Gibbs
(Principal Accounting Officer
and Vice President, Finance/
Control Division Manager)
12
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000741562
<NAME> FIRST JERMYN CORP.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 6,740
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 7,425
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 37,738
<INVESTMENTS-CARRYING> 68,946
<INVESTMENTS-MARKET> 70,097
<LOANS> 171,216
<ALLOWANCE> 3,007
<TOTAL-ASSETS> 298,286
<DEPOSITS> 270,329
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,316
<LONG-TERM> 907
<COMMON> 1,125
0
0
<OTHER-SE> 24,609
<TOTAL-LIABILITIES-AND-EQUITY> 298,286
<INTEREST-LOAN> 10,948
<INTEREST-INVEST> 4,836
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 15,784
<INTEREST-DEPOSIT> 7,424
<INTEREST-EXPENSE> 7,494
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<NET-INCOME> 2,319
<EPS-PRIMARY> 2.62
<EPS-DILUTED> 2.62
<YIELD-ACTUAL> 3.55
<LOANS-NON> 2,272
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<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,336
</TABLE>
