<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 June 30, 1996
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 July 29, 1996
----- ----------------------------
<S> <C>
Common stock, $1.25 par value 884,680
</TABLE>
<PAGE> 2
THE FIRST JERMYN CORP. AND SUBSIDIARIES
FORM 10-QSB
QUARTER ENDED JUNE 30, 1996
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
Consolidated Balance Sheets - June 30, 1996 and
December 31, 1995 1
Consolidated Statements of Income - Three Months and Six Months
Ended June 30, 1996 and 1995 2
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1996 and 1995 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>
June 30, December 31,
ASSETS 1996 1995
- -----------------------------------------------------------------------------------------------------
S> <C> <C>
Cash and due from banks $ 10,001 12,341
Federal funds sold --- 1,860
Securities available for sale 29,176 13,375
Mortgage backed securities available for sale 26,339 26,206
Investment securities 68,002 75,317
Loans, gross 179,802 174,470
Less: Unearned discount and origination fees (1,055) (1,128)
Allowance for loan losses (3,054) (3,015)
- ----------------------------------------------------------------------------------------------------
Loans, net 175,693 170,327
Accrued interest receivable 2,917 2,551
Bank premises, leasehold improvements and furniture and equipment - net 5,125 5,190
Real estate owned other than bank premises 324 296
Other assets 2,388 2,523
- ----------------------------------------------------------------------------------------------------
Total assets $319,965 309,986
====================================================================================================
LIABILITIES
- ----------------------------------------------------------------------------------------------------
Deposits:
Noninterest-bearing demand $ 28,066 29,071
Interest-bearing 259,798 252,227
- ----------------------------------------------------------------------------------------------------
Total deposits 287,864 281,298
- ----------------------------------------------------------------------------------------------------
Capitalized lease obligation 856 891
Federal funds purchased 230 ---
Other borrowed money 1,900 ---
Accrued interest payable 1,158 1,106
Other liabilities 329 482
- ----------------------------------------------------------------------------------------------------
Total liabilities 292,337 283,777
- ----------------------------------------------------------------------------------------------------
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 23,507 21,944
Unrealized loss on securities available for sale, net of tax (684) (540)
Less treasury stock-at cost (15,205 shares) (196) (196)
- ----------------------------------------------------------------------------------------------------
Total shareholders' equity 27,628 26,209
- ----------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $319,965 309,986
====================================================================================================
</TABLE>
See accompanying notes to 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 Six months
Ended June 30 Ended June 30
1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans 3,692 3,669 7,378 7,257
Interest and dividends on securities:
U.S. Treasury 1,251 1,230 2,415 2,365
U.S. government agencies 2 1 3 2
CMO's of U.S. government agencies
and corporations 433 270 863 489
State and political subdivisions 248 37 495 75
Other taxable debt 5 12 13 24
Taxable equity 2 2 4 4
Interest on federal funds sold 60 86 187 126
- -------------------------------------------------------------------------------------------------------------
Total interest income 5,693 5,307 11,358 10,342
- -------------------------------------------------------------------------------------------------------------
Interest expense:
Deposits 2,785 2,549 5,628 4,717
Federal funds purchased 2 0 2 1
Capitalized lease obligations 22 23 43 46
- -------------------------------------------------------------------------------------------------------------
Total interest expense 2,809 2,572 5,673 4,764
- -------------------------------------------------------------------------------------------------------------
Net interest income 2,884 2,735 5,685 5,578
Provision for loan losses 45 91 91 181
- -------------------------------------------------------------------------------------------------------------
Net interest income after provision for
loan losses 2,839 2,644 5,594 5,397
- -------------------------------------------------------------------------------------------------------------
Noninterest income:
Service charges and fees 86 96 199 210
Gain on legal settlement --- --- 600 ---
Other 40 43 55 63
- -------------------------------------------------------------------------------------------------------------
Total noninterest income 126 139 854 273
- -------------------------------------------------------------------------------------------------------------
Noninterest expense:
Salaries and benefits 901 794 1,763 1,582
Net occupancy and furniture/
equipment expenses 295 240 602 468
Data processing services 105 116 211 221
FDIC insurance 18 138 36 278
Advertising 52 40 116 74
Other expenses 421 435 854 835
- -------------------------------------------------------------------------------------------------------------
Total noninterest expense 1,792 1,763 3,582 3,458
- -------------------------------------------------------------------------------------------------------------
Income before federal income tax provision 1,173 1,020 2,866 2,212
Federal income tax provision 298 314 773 687
- -------------------------------------------------------------------------------------------------------------
Net income 875 706 2,093 1,525
=============================================================================================================
Per share information:
Net income $.99 $.80 $2.37 $1.72
Weighted average shares outstanding 884,680 884,680 884,680 884,680
=============================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements
2
<PAGE> 5
THE FIRST JERMYN CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Six months ended June 30,
1996 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating activities:
Net income $ 2,093 $ 1,525
- -----------------------------------------------------------------------------------------------------
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for loan losses 91 181
Depreciation and amortization of investment securities, bank
premises, leasehold improvements and furniture and equipment 257 219
Increase in interest receivable and OTHER assets (391) (370)
(Increase)/Decrease in interest payable and other liabilities (13) 105
- -----------------------------------------------------------------------------------------------------
Net cash provided by operating activities 2,037 1,660
Investing activities:
Purchases of securities available for sale (18,248) (20,166)
Proceeds from maturities of securities 9,559 9,910
Net increase in loans (5,509) (2,097)
Purchases of bank premises, leasehold improvements and
furniture and equipment - net (192) (405)
Sales of assets acquired through foreclosure 22 444
- -----------------------------------------------------------------------------------------------------
Net cash used in investing activities (14,368) (12,314)
- -----------------------------------------------------------------------------------------------------
Financing activities:
Net increase in noninterest-bearing demand deposits
and interest-bearing deposits 6,566 15,325
Proceeds from (repayment of) federal funds purchased and
Other borrowed money 2,130 (1,900)
Principal payments on capitalized lease obligation (35) (31)
Dividends paid (530) (487)
- -----------------------------------------------------------------------------------------------------
Net cash provided by financing activities 8,131 12,907
- -------------------------------------------------------------- --------------------------------------
(Decrease)/Increase in cash and cash equivalents (4,200) 2,253
Cash and cash equivalents at beginning of period 14,201 10,659
- -----------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 10,001 12,912
=====================================================================================================
Cash paid during the period:
Interest $ 5,621 4,438
Federal Income Taxes 847 601
=====================================================================================================
Noncash transactions:
Transfer of loans to real estate owned $ 50 200
Net unrealized (loss) gain on securities available for sale, net of tax $ (144) 670
=====================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements
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, 1995. The results for the six months ended June 30, 1996
are not necessarily indicative of the results that may be expected for
the year ended December 31, 1996.
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 $.99 and $2.37 for the three-month and six
month periods ended June 30, 1996 as compared to $.80 and $1.72 for
the three month and six month periods ended June 30, 1995. 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 March 1995, the FASB issued SFAS No. 121, Accounting for the Impairment of
Long-Lived Asset and for Long-Lived Assets to be Disposed of. This statement
requires that long-lived asset 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 has been adopted by the Company effective January 1, 1996. The
adoption of this statement did not materially effect the Company's results of
operations, equity, 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 other 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 was adopted by the Company effective
January 1, 1996. The adoption of this statement did not materially effect the
Company's results of operations, equity, 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 was adopted by the Company effective January 1, 1996. Bank does
not offer stock-based compensation and therefore, the adoption of this
statement will not materially effect the Company's results of operation,
equity, or financial condition.
In June 1996, the FASB Issued SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities" ("SFAS 125").
This statement provides accounting and reporting standards for transfers and
servicing of financial assets and extinguishments of liabilities based on
consistent application of a financial-components approach that focuses on
control. It distinguishes transfers of financial assets that are sales from
transfers that are secured borrowings. Under the financial-components
approach, after a transfer of financial assets, an entity recognizes all
financial and servicing assets it controls and liabilities it has incurred and
derecognizes financial assets it no longer controls and liabilities that have
been extinguished. The approach focuses on the assets and liabilities that
exist after the transfer. If a transfer does not meet the criteria for a sale,
the transfer is accounted for as a secured borrowing with pledge of collateral.
The Company has not yet determined the effect, if any, that SFAS 125 will have
on its financial statements and will adopt SFAS 125 prospectively, effective
January 1, 1997, the required date of adoption.
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 six month periods ended June
30, 1996 was $875,000 and $2,093,000 or $.99 and $2.37 per share compared to
$706,000 and $1,525,000 or $.80 and $1.72 in the same three month and six-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 June 30, 1996, the Company had total assets of $320 million compared to $310
million at December 31, 1995. The growth in total assets substantially
consists of growth in the securities and loan portfilios which were primarily
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 1.32% for the six-month
period ending June 30, 1996, compared to 1.09% for the same period in 1995.
Annualized return on average equity of 15.59% was recorded for the six-month
period ended June 30, 1996, compared to 12.91% for the same period in l995.
The Company is susceptible to a continued increasing interest rate environment
that may erode the net interest margin. Strategies to enhance earnings and
improve the interest rate exposure of the Company will be considered, such as
the sale of existing securities available for sale and purchasing higher
yielding, rate sensitive assets with the proceeds. 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
Cash and due from banks declined to approximately $10 million at June 30, 1996
from $12.3 million at December 31, 1995 due to normal fluctuations resulting
from the conduct of customer business.
SECURITIES AVAILABLE FOR SALE
Securities, including mortgage backed securities, available for sale increased
$15.9 million or 40% to $55.5 million at June 30, 1996 from $39.6 million at
December 31, 1995. This increase was funded in part by the proceeds from the
maturity of investment securities. The increase was primarily due to the
purchase of Treasury Notes with maturity less than two years.
LOANS RECEIVABLE, NET
Aggregate loans receivable totaled $175.7 million at June 30, 1996, an increase
of $5.4 million or 3% from 170.3 million at December 31, 1995. The mix of
loans is substantially unchanged at those dates.
6
<PAGE> 9
NON-PERFORMING ASSETS
The Company's total non-performing assets increased from $2.8 million or .90 of
total assets at December 31, 1995 to $3.7 million or l.15% of total assets at
June 30, 1996. Loans greater than ninety days delinquent but still accruing
increased from $511,000 at December 31, 1995 to $783,000 at June 30, 1996.
Real estate owned, increased $28,000 or 9.8% from $296,000 as of December 31,
1995 to $324,000 as of June 30, 1996, due to the foreclosure of property
securing one credit. There were no significant gains or losses on the sale of
real estate owned.
<TABLE>
<CAPTION>
6/30/96 12/31/96 6/30/95
-------- -------- -------
<S> <C> <C> <C>
Nonaccrual 2,559,000 1,978,000 3,128,000
Loans 90 days of more delinquent 783,000 511,000 828,000
Restructured --- --- ---
--------- --------- ---------
Total non-performing loans 3,342,000 2,489,000 3,956,000
Other real estate owned other than
Bank premises 324,000 296,000 330,000
--------- --------- ---------
Total non-performing assets 3,666,000 2,785,000 4,286,000
</TABLE>
At June 30, 1996, the Company's allowance for loan losses amounted to $3.05
million or 1.71% of gross loans receivable. At December 31, 1995, the
Company's allowance for loan losses was $3.02 million or l.73% of gross loans
receivable.
DEPOSITS
Deposits increased $6.6 million or 2.3% from $281.3 million at December 31,
1995 to $287.9 million at June 30, 1996. The increase in deposits was
primarily due to an increase in certificates of deposit. The Company believes
this increase is due to the Bank's competitive rates. Another significant
factor relating to the increase in deposits has been the opening of the
Company's Carbondale office.
EQUITY
At June 30, 1996, total equity was $27.6 million or 8.6% of total assets
compared to $26.2 million or 8.5% of total assets as of December 31, 1995.
Total equity increased primarily due to the retention of net income during the
intervening period, net of cash dividends paid.
7
<PAGE> 10
RESULTS OF OPERATIONS
NET INCOME
The Company's net income increased $169,000 to $875,000 for the three months
ended June 30, 1996, compared to $706,000 recorded in the comparable prior
period. For the six-month period ended June 30, 1996, net income increased
$568,000 or approximately 37% compared to $1,525,000 for the six-months ended
June 30, 1995. In a competitive rate enviroment, the Company was able to
improve its level of core earning as net interest income after provision for
loan losses increased by $195,000 and $197,000 for the three months and six
month periods ended June 30, 1996 and 1995.
NET INTEREST INCOME
Net interest income before provision for loan losses amounted to $2.9 million
and $5.7 million for the three-month and six month periods ended June 30, 1996
as compared to $2.7 million and $5.6 million for the respective periods in
1995. Interest income in 1996 increased for income on securities but was
offset by interest on an enlarged deposit base.
Total interest income increased to $5,693,000 and $11,358,000 for the three
month and six month periods ended June 30, 1996 from $5,307,000 and $10,342,000
during the comparable prior periods. The increase was primarily the result of
an increase in the average interest-earning assets of $35,630,000 for the six
months ended June 30, 1996 compared to the six months ended June 30, 1995.
Additionally, the yield earned on average interest-earning assets decreased 23
basis points during the six months ended June 30, 1996 compared to the 1995
period.
Total interest expense increased by $237,000 and $909,000 to $2,809,000 and
$5,673,000 for the three and six months ended June 30, 1996 from $2,572,000
and $4,764,000 for the comparable prior periods. The increase was due to an
increase in interest expense associated with deposits, where the average
balance increased by $30,463,000 during the six months ended June 30, 1996
compared to the 1995 period. The increase in interest expense on deposits was
also caused by a 20 basis point increase in the average rates paid for the six
months ended June 30, 1996 over the comparable 1995 period.
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 six month periods ended June 30, 1996,
the provision for loan losses amounted to $45,000 and $91,000, a decrease from
the $91,000 and $181,000 recorded in the comparable prior periods. The
decreased provision was a result of the Company's improvement in asset quality
from June 30, 1995 to June 30, 1996.
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 provisions for loan losses in the future as a result of 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 six months ending June 30, 1996 increased
approximately $581,000 to $854,000 from the comparable prior period, primarily
due to a one-time gain on a legal settlement in the Company's favor which was
recorded in the first quarter of 1996.
NONINTEREST EXPENSES
Noninterest expenses for the six month period ending June 30, 1996 increased
approximately 3.6% from the comparable prior period, with the biggest increase
occurring in salaries and benefits and net occupancy and furniture/equipment
expenses as a result of normal merit increases and additional personnel and
facilities related to the opening of the Carbondale office. The increases
were partially offset by a reduction in the Bank's FDIC insurance expenses.
INCOME TAXES
Income tax expense totaled $298,000 and $773,000 for the three-month and six
month periods ended June 30, 1996 compared to $314,000 and $687,000 for the
comparable prior periods. These amounts resulted in effective tax rates of
25.4% and 27% for the three and six months ended June 30, 1996 compared to
30.8% and 31.1% for the comparable periods in 1995. The increase in tax expense
during the six month period ending June 30, 1996 was due to an increase in
income before the federal income tax provision. The decrease in tax expense
and effective tax rate during the three month period ending June 30, 1996 was
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 $1,419,000 to $27,628,000 at June 30, 1996 compared to
December 31, 1995. 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 June 30, 1996, of which 4% must be
Tier 1 capital. The Company's total risk-based capital ratio was 18.57% at
June 30, 1996. The Company's Tier 1 risk-based capital ratio was 17.32% at
June 30, 1996.
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 8.81% at June 30, 1996.
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 June 30, 1996, the Bank's total risk-based capital, Tier I risk-based
capital and Tier I leverage ratios were 18.57%, 17.32% and 8.81%, respectively.
10
<PAGE> 13
FIRST JERMYN CORP. AND SUBSIDIARIES
June 30, 1996
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
June 30, 1996
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 August 9, 1996 By/s/ William M. Davis
-------------- -----------------------
William M. Davis
Chairman, President and
Director
(Principal Executive
Officer)
Date August 9, 1996 By /s/ Martha Myshak
-------------- -----------------------
Martha Myshak
(Principal Financial
Officer and Treasurer)
Date August 9, 1996 By /s/ Donald J. Gibbs
-------------- ---------------
Donald J. Gibbs
(Principal Accounting
Officer and Vice
President, Finance /
Control Division Manager)
12
<PAGE> 15
THE FIRST JERMYN CORP. AND SUBSIDIARIES
JUNE 30, 1996
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
SIGNATURES
In accordance with requirements 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: AUGUST 9, 1996 -----------------------
WILLIAM M. DAVIS
Chairman, President and Director
(Principal Executive Officer)
DATE: AUGUST 9, 1996 -----------------------
MARTHA MYSHAK
Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
DATE: AUGUST 9, 1996 -----------------------
DONALD J. GIBBS
(Vice President, Finance/Control
Div. Mgr. and Principal Accounting
Officer)
13
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 10,001
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 55,515
<INVESTMENTS-CARRYING> 68,002
<INVESTMENTS-MARKET> 68,371
<LOANS> 179,802
<ALLOWANCE> 3,054
<TOTAL-ASSETS> 319,965
<DEPOSITS> 287,864
<SHORT-TERM> 2,130
<LIABILITIES-OTHER> 1,487
<LONG-TERM> 856
0
0
<COMMON> 1,125
<OTHER-SE> 26,503
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</TABLE>
