_________________________________________________________________
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 30, 1998
FIRST LIBERTY BANK CORP.
(Exact name of registrant as specified in its charter)
Pennsylvania 0-13312 23-2275242
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Ident. No.)
645 Washington Avenue, P.O. Box 39, Jermyn, PA 18433-0039
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (717) 876-6500
The First Jermyn Corp.
(Former name or former address, if changed since last report.)
_________________________________________________________________
_________________________________________________________________
PAGE 1
<PAGE>
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
The Consolidated Balance Sheets as of December 31, 1997
and 1996, and the Consolidated Statements of Income,
Consolidated Statements of Changes in Shareholders'
Equity and Consolidated Statements of Cash Flows for
the years ended December 31, 1997 and 1996 of Upper
Valley Bancorp, Inc. and subsidiary, and the related
Notes to Consolidated Financial Statements are
incorporated herein by reference to Exhibit 99.2
hereof.
The Unaudited Consolidated Balance Sheets as of
June 30, 1998, and the Unaudited Consolidated
Statements of Income, Unaudited Consolidated Statements
of Changes in Shareholders' Equity, and Unaudited
Consolidated Statements of Cash Flows for the six-month
periods ended June 30, 1998 and 1997 of Upper Valley
Bancorp, Inc. and subsidiary, and the related Notes to
Unaudited Consolidated Financial Statements are
incorporated herein by reference to Exhibit 99.3
hereof.
(b) Pro forma financial information.
The pro forma financial statements of First Liberty
Bank Corp. (formerly, The First Jermyn Corp.) and Upper
Valley Bancorp, Inc. required by Item 7(b) of Form 8-K
are incorporated herein by reference to Exhibit 99.4
hereof.
(c) Exhibits.
2.1 Agreement, dated as of October 15, 1997,
between First Jermyn and Upper Valley.*
23 Consent of Kronick Kalada Berdy and Co.
99.1 Report of Kronick Kalada Berdy and Co.
99.2 Consolidated Balance Sheets as of December 31,
1997 and 1996, and the Consolidated Statements of
Income, Consolidated Statements of Changes in
Stockholders' Equity and Consolidated Statements
of Cash Flows for the years ended December 31,
1997 and 1996 of Upper Valley Bancorp, Inc. and
subsidiary, and the related Notes to Consolidated
Financial Statements are incorporated herein by
reference to pages F-3 through F-27 to the
Form S-4/A Registration Statement (No. 333-49391)
of The First Jermyn Corp. dated May 21, 1998.
<PAGE 2>
99.3 Unaudited Consolidated Balance Sheets as of
June 30, 1998, and the Unaudited Consolidated
Statements of Income, Unaudited Consolidated
Statements of Changes in Shareholders' Equity, and
Unaudited Consolidated Statements of Cash Flows
for the six-month periods ended June 30, 1998 and
1997 of Upper Valley Bancorp, Inc. and subsidiary,
and the related Notes to Unaudited Consolidated
Financial Statements.
99.4 Pro forma unaudited financial statements of First
Liberty Bank Corp. (formerly, The First Jermyn
Corp.) and Upper Valley Bancorp, Inc.
_______________
*Previously Filed.
PAGE 3
<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 hereunto duly authorized.
FIRST LIBERTY BANK CORP.
Dated: September 10, 1998
By /s/ William M. Davis
William M. Davis,
President and Chief Executive
Officer
PAGE 4
<PAGE>
EXHIBIT INDEX
Exhibit Number
23 Consent of Kronick Kalada Berdy and Co.
99.1 Report of Kronick Kalada Berdy and Co.
99.3 Unaudited Consolidated Balance Sheets as of
June 30, 1998, and the Unaudited Consolidated
Statements of Income, Unaudited Consolidated
Statements of Changes in Shareholders'
Equity, and Unaudited Consolidated Statements
of Cash Flows for the six-month periods ended
June 30, 1998 and 1997 of Upper Valley
Bancorp, Inc. and subsidiary, and the related
Notes to Unaudited Consolidated Financial
Statements.
99.4 Pro forma unaudited financial statements of
First Liberty Bank Corp. (formerly, The First
Jermyn Corp.) and Upper Valley Bancorp, Inc.
<PAGE 5>
EXHIBIT 23
CONSENT OF KRONICK KALADA BERDY AND CO.
We consent to the inclusion in this Amendment No. 1 to the
Form 8-K of First Liberty Bank Corp. of our report dated
January 16, 1998.
KRONICK KALADA BERDY AND CO.
September 9, 1998 /s/ Kronick Kalada Berdy and Co.
EXHIBIT 99.1
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
First Liberty Bank Corp.
Jermyn, Pennsylvania
We have audited the accompanying consolidated balance sheets of
Upper Valley Bancorp, Inc. and subsidiary as of December 31, 1997
and 1996, and the related consolidated statements of income,
changes in stockholders' equity and cash flows for the years then
ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Upper Valley Bancorp, Inc. and subsidiary as of
December 31, 1997 and 1996 and the results of their operations
and their cash flows for the years then ended, in conformity with
generally accepted accounting principles.
KRONICK KALADA BERDY & CO.
January 16, 1998 /s/ Kronick Kalada Berdy & Co.
EXHIBIT 99.3
UPPER VALLEY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share)
JUNE 30, 1998 AND DECEMBER 31, 1997
ASSETS
June 30, December 31,
1998 1997
(unaudited)
Cash and due from Banks $ 5,569 $ 5,317
Federal funds sold 8,487 2,860
Investments:
Held to maturity (market value
$16,688, 1997 and $25,671, 1998) 25,554 16,331
Available for sale 62,109 67,329
Loans 160,678 156,984
Less allowance for loan losses (2,010) (1,866)
Net loans 158,668 155,118
Accrued interests receivable 2,236 2,139
Premises and equipment 4,499 4,310
Other assets 4,411 5,910
Total assets $271,533 $259,314
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 20,081 $ 19,347
Interest bearing 174,785 173,345
Total deposits 194,866 192,692
Borrowed funds 50,000 40,000
Accrued interest payable 1,197 935
Other liabilities 520 1,380
Total liabilities 246,583 235,007
Stockholders' equity:
Common stock, par value $.50 per
share, authorized 2,000,000 shares;
issued and outstanding 1,000,732,
1998; 1,000,559, 1997 504 500
Additional paid in capital 1,993 1,833
Retained earnings 22,452 22,026
Net unrealized gain (loss) on
available for sale securities 1 (52)
<PAGE 1>
Total stockholders' equity 24,950 24,307
Total liabilities and
stockholders' equity $271,533 $259,314
See notes to consolidated financial statements.
PAGE 2
<PAGE>
UPPER VALLEY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollars in thousands, except per share)
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
Six months ended
June 30, June 30,
1998 1997
(unaudited) (unaudited)
Interest income:
Loans
Taxable $6,624 $6,434
Tax-exempt 128 113
Investments:
Taxable 1,921 2,279
Tax-exempt 652 374
Federal funds sold 245 163
Total interest income 9,570 9,363
Interest expense:
Savings deposits 594 606
Time deposits 3,379 3,485
Borrowed funds 1,379 977
Total interest expense 5,352 5,068
Net interest income 4,218 4,295
Provision for loan losses 180 300
Net interest income after provision
for loan losses 4,038 3,995
Other income:
Service charges and fees 134 129
Trust fees 247 163
Securities, gains (losses), net 28 (105)
Other income 82 88
Total other income 491 275
Other expenses:
Salaries, wages and benefits 1,585 1,282
Occupancy Expense 568 571
Other expenses 1,317 1,265
Total other expenses 3,470 3,118
Income before income taxes 1,059 1,152
Provision for income tax expense 246 197
Net income $ 813 $ 955
Basic income per share $ .81 $ .96
Diluted income per share $ .79 $ .95
Net income (from above) $ 813 $ 955
Other comprehensive income (loss): <PAGE 3>
Unrealized gains (losses) on investment
securities available for sale (30) (343)
Income tax expense (benefit) related
to other comprehensive income 83 54
Other comprehensive income (loss),
net of income tax 53 (289)
Comprehensive income $ 866 $ 666
See notes to consolidated financial statements.
PAGE 4
<PAGE>
UPPER VALLEY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Dollars in thousands, except per share)
SIX MONTHS ENDED JUNE 30, 1998
(Unaudited)
Net
unrealized
gain
(loss) on
Additional available
Common paid in Retained for sale
Stock capital earnings securities Total
Balances,
December 31,
1997 $500 $1,833 $22,026 $(52) $24,307
Net income 813 813
Exercise of
stock
options 4 160 164
Cash dividends
$.22 per
share (387) (387)
Net unrealized
gain 53 53
Balances,
March 31, ____ ______ _______ ____ _______
1998 $504 $1,993 $22,452 $ 1 $24,950
See notes to consolidated financial statements.
PAGE 5
<PAGE>
UPPER VALLEY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
Six months ended June 30,
1998 1997
(unaudited) (unaudited)
Operating activities:
Net income $ 813 $ 955
Adjustments to reconcile net income
to net cash provided by operating
activities:
Provision for loan losses 180 300
Depreciation and amortization of
investment securities, bank
premises, leasehold improvements
and furniture and equipment 248 244
Decrease in interest receivable
and other assets 611 14
(Decrease)/Increase in interest
payable and other liabilities (543) 3,549
Net cash provided by operating
activities 1,309 5,602
Investing activities:
Purchases of securities held to
maturity (12,426) (16,558)
Purchases of securities available
for sale (25,564) (16,636)
Proceeds from maturities of
securities 34,066 31,198
Net increase in loans (3,789) (9,727)
Purchases of bank premises,
leasehold improvements and
furniture and equipment - net (48) (191)
Sales of assets acquired through
foreclosure 435 430
Net cash (used in) provided by
investing activities (7,326) (11,484)
Financing activities:
Net (decrease)/increase in non-
interest-bearing demand deposits
and interest-bearing deposits 2,173 (948)
Proceeds from federal funds purchased
and other borrowed money 10,000 3,000
Proceeds of stock issued 164 --
Dividends paid (441) (440)
Net cash provided by (used in) <PAGE 6>
financing activities 11,896 1,612
Increase in cash and cash equivalents 5,879 (4,810)
Cash and cash equivalents at beginning
of period 8,177 14,470
Cash and cash equivalents at end of
period 14,056 9,930
Cash paid during the period:
Interest $ 5,216 $ 4,995
Federal income taxes 275 194
Noncash transactions:
Transfer of loans to real estate
owned other than bank premise $ 59 $ 530
Net unrealized gain on securities
available for sale, net of tax $ 53 $ 343
PAGE 7
<PAGE>
UPPER VALLEY BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share)
1. Basis of presentation:
The accompanying unaudited consolidated financial statements
of Upper Valley and subsidiary, NBO (collectively, "Upper
Valley") have been prepared in conformity with generally
accepted accounting principles ("GAAP"). In the opinion of
management, all normal recurring adjustments necessary for
fair presentation of the financial position and results of
operations for the periods have been included. All
significant intercompany balances and transactions have been
eliminated in the consolidation. Prior-period amounts are
reclassified when necessary to conform with the current
year's presentation.
The preparation of financial statements in conformity with
GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of
revenues and expenses during the reported periods. Actual
results could differ from those estimated.
2. Earnings per common share and capital structure:
Upper Valley adopted Statement of Financial Accounting
Standards ("SFAS") No. 128, "Earnings per Share," on
December 31, 1997. Under SFAS No. 128, two earnings per
share ("EPS") calculations are required, basic EPS, which is
computed by dividing net income by weighted-average common
shares outstanding, and dilutive EPS, which is based on the
weighted-average common shares outstanding plus all dilutive
potential common shares outstanding.
Basic income per share is computed by dividing earnings
applicable to common shareholders by the weighted average
number of common shares outstanding. The weighted average
number of shares outstanding at June 30, 1998 and 1997 were
1,007,732 and 1,000,000, respectively. Diluted income per
share is similar to basic income per share except that the
weighted average of common shares outstanding is increased
to include the number of additional common shares that would
have been outstanding if the dilutive potential common
shares had been issued.
The following is a reconciliation of the numerators and
denominators of the basic and diluted EPS computations for
"net income."
<PAGE 8>
June 30, 1998
Per-share
Income Shares amount
Basic EPS
Net income which is income
available to common
stockholders $813 1,007,732 $.81
Effect of Dilutive Securities
Stock Options 21,608
Diluted EPS
Income available to common
stockholders $813 1,029,340 $.79
June 30, 1997
Per-share
Income Shares amount
Basic EPS
Net income which is income
available to common
stockholders $955 1,000,000 $.96
Effect of Dilutive Securities
Stock Options 7,745
Diluted EPS
Income available to common
stockholders and assumed
conversions $955 1,007,745 $.95
Simultaneously with its adoption of SFAS No. 128, Upper
Valley also adopted SFAS No. 129, "Disclosure of Information
about Capital Structure." This Statement did not establish
any new standards but rather codifies certain previously-
required disclosures regarding the pertinent rights and
privileges of the various components of an entity's capital
structure. Since this Statement contained no change in
disclosure requirements, Upper Valley's adoption had no
effect on financial statement presentation.
3. Comprehensive income:
Upper Valley adopted SFAS No. 130, "Reporting Comprehensive
Income," on January 1, 1998. This Statement established
standards for reporting and display of comprehensive income.
Comprehensive income is defined as the change in equity of a
business enterprise during a period from transactions and
other events and circumstances from nonowner sources. All
items required to be recognized as components of
comprehensive income are to be reported in a financial
statement that is displayed with the same prominence as
other financial statements. Upper Valley elected to
disclose the components of comprehensive income for the
<PAGE 9> quarters ended June 30, 1998 and 1997 in its
Consolidated Statements of Income and Comprehensive Income.
4. Segment disclosure:
Upper Valley adopted SFAS No. 131, "Disclosures About
segments of an Enterprise and Related Information," on
January 1, 1998. This Statement established standards for
the way public companies report information about operating
segments in interim financial reports issued to
stockholders. It also establishes standards for related
disclosures regarding products and services, geographic
areas and major customers. SFAS No. 131 need not be applied
to interim financial statements in the initial year of its
application, therefore adoption of this statement had no
impact on the accompanying consolidated financial
statements.
5. Employee benefit plans:
Upper Valley adopted SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits," on
January 1, 1998. This Statement: (i) revises employers'
disclosures about pension and other postretirement benefit
plans; (ii) standardizes the disclosure requirements for
benefits of such plans; (iii) requires additional
information on changes in the benefit obligations and fair
value of plan assets that will facilitate financial
analysis; and (iv) eliminates certain disclosures that are
no longer useful. Most of the changes in the disclosure
provisions of this Statement address defined benefit plans.
Upper Valley's adoption of SFAS No. 132 had no effect on
disclosure requirements nor did it have any effect on
operating results or financial position.
6. Investments:
During the first quarter of 1998, Upper Valley sold
approximately $5,881,000 in securities from the held to
maturity portfolio. This sale was conducted in accordance
with the provisions of FASB 115 due to the pending merger
transaction. The sale allowed Upper Valley to maintain and
improve its existing interest rate position through
reinvestment of the sale funds.
7. Borrowings:
During the first quarter of 1998, Upper Valley borrowed
$10 million from the Federal Home Loan Bank at a blended
first year rate of approximately 5%. $5 million matures in
7 years and $5 million matures in 10 years. There were no
significant changes in borrowings during the second quarter
of 1998.
<PAGE 10>
8. Recent Acquisition:
On October 15, 1997, the Company entered into a definitive
agreement to merge with First Jermyn. The transaction was
completed on June 30, 1998. Under the terms of the
agreement, Upper Valley's shareholders received .689 shares
of First Jermyn Common Stock for each Upper Valley share
owned. The transaction was accounted for as a pooling-of-
interests. The total value of the transaction was
approximately $52.1 million based upon First Jermyn's stock
price prior to completion of the acquisition. The
transaction created a company with approximately
$609 million in assets and $56 million in total
shareholder's equity. <PAGE 11>
EXHIBIT 99.4
PRO FORMA UNAUDITED COMBINED CONDENSED BALANCE SHEET
AS OF JUNE 30, 1998
(In thousands)
<TABLE>
<CAPTION>
First Jermyn
and
Upper Valley
First Jermyn Upper Valley Adjustments Combined
<S> <C> <C> <C> <C>
Cash and amounts due
from depository
institutions ......... $ 14,341 $ 14,056 -- $ 28,397
Investment securities.. 103,976 87,663 -- 19,639
Loans(1) .............. 212,201 160,678 -- 372,879
Allowance for
loan ................ (2,561) (2,010) -- (4,571)
Other assets .......... 9,610 11,146 -- 20,756
Total assets .......... $337,567 $271,533 $ -- $609,100
Deposits .............. $303,308 $194,866 -- $498,174
Borrowings ............ 702 50,000 -- 50,702
Other Liabilities ..... 2,024 1,771 -- 3,795
Total liabilities ..... $306,034 $246,637 -- $552,671
Common Stock .......... $ 1,125 $ 504 $ 364(2) $ 1,993
Additional paid-in
capital ............. 3,876 1,993 364(2) 5,505
Net unrealized loss on
available for sale
securities .......... (63) 1 -- (62)
Treasury Stock (196) -- -- (196)
Retained Earnings ..... 26,791 22,398 -- 49,189
Total shareholders'
equity .............. 31,533 24,896 -- 56,429
Total liabilities and
shareholders'
equity ............. $337,567 $271,533 -- $609,100
</TABLE>
_____________________
(1) Loans are shown net of unearned discounts and origination
fees.
(2) Represents adjustment to common stock and additional paid-in
capital accounts to reflect the pro forma number of shares
of common stock to be issued and outstanding after
consummation of the transaction multiplied by the par value
of First Jermyn Common Stock of $1.25 per share.
PAGE 1
<PAGE>
PRO FORMA UNAUDITED COMBINED CONDENSES INCOME STATEMENT
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(In thousands, except per share data)
First Jermyn
and
First Upper Adjust- Upper Valley
Jermyn Valley ments Combined
Interest income...... $11,668 $9,570 --- $21,238
Interest expense..... 5,957 5,352 --- 11,309
Net interest income.. 5,711 4,218 --- 9,929
Provision for loan
losses............. 90 180 --- 270
Net interest income
after provision
for loan losses.... 5,621 4,038 --- 9,659
Other non-interest
income............. 351 491 842
Non-interest expense. 4,504 3,470 --- 7,974
Income before taxes.. 1,468 1,059 --- 2,527
Income taxes......... 645 246 --- 891
Net income........... $ 823 $ 813 --- $ 1,636
Earnings per share,
basic(1)........... $ .93 $ .81 $ 1.04
Earnings per share,
diluted(2)......... .93 .79 1.03
__________________
(1) Combined basic earnings per share are calculated based on
combined net income divided by the sum of (i) the weighted
average number of shares of First Liberty Bank Corp. common
stock outstanding during the first six months of 1998 of
884,680 shares, plus (ii) the weighted average number of
shares of Upper Valley Common Stock outstanding during the
first six months of 1998 of 1,007,732 shares multiplied by
the Exchange Ratio.
(2) Combined diluted earnings per share are calculated based on
combined net income divided by the sum of (i) the weighted
average number of shares of First Liberty Bank Corp. common
stock outstanding during the first six months of 1998 of
884,680 shares plus (ii) the weighted average number of
diluted shares of Upper Valley Common Stock outstanding
during the first six months of 1998 of 1,029,340 multiplied
by the Exchange Ratio.
(3) This pro forma unaudited combined condensed income statement
includes charges or credits which resulted directly from the
transaction. As a result of the acquisition, the combined
entity incurred approximately $1.0 million in merger-related
<PAGE 2> expenses for items such as legal, investment
advisory, accounting, severance pay, and fixed asset write-
offs.
PAGE 3
<PAGE>
PRO FORMA UNAUDITED COMBINED CONDENSED INCOME STATEMENT
FOR THE YEAR ENDED December 31, 1997
(In thousands, except per share data)
<TABLE>
<CAPTION>
First Jermyn
and
Upper Valley
First Jermyn Upper Valley Adjustments Combined
<S> <C> <C> <C> <C>
Interest income........ $22,600 $18,716 -- $41,316
Interest expense....... 11,288 10,287 -- 21,575
Net interest income.... 11,312 8,429 -- 19,741
Provision for
loan losses.......... 180 420 -- 600
Net interest income
after provision for
loan losses.......... 11,132 8,009 -- 19,141
Other non-interest
income............... 696 1,348 -- 2,044
Non-interest expense... 7,055 7,273 -- 14,328
Income before taxes.... 4,773 2,084 -- 6,857
Income taxes........... 1,290 447 -- 1,737
Net income............. $ 3,483 $ 1,637 -- $ 5,120
Earnings per share,
basic(1)............. $ 3.94 $ 1.64 -- $ 3.25
Earnings per share,
diluted(2)........... 3.94 1.59 -- 3.21
______________________
</TABLE>
(1) Combined basic earnings per share are calculated based on
combined net income divided by the sum of (i) the weighted
average number of shares of First Jermyn Common Stock
outstanding during 1997 of 884,680 shares plus (ii) the
weighted average number of shares of Upper Valley Common
Stock outstanding during 1997 of 1,000,228 shares multiplied
by the Exchange Ratio.
(2) Combined diluted earnings per share are calculated based on
combined net income divided by the sum of (i) the weighted
average number of shares of First Jermyn Common Stock
outstanding during 1997 of 884,680 shares plus (ii) the
weighted average number of diluted shares of Upper Valley
Common Stock outstanding during 1997 of 1,024,198 multiplied
by the Exchange Ratio.
PAGE 4
<PAGE>
PRO FORMA UNAUDITED COMBINED CONDENSED INCOME STATEMENT
FOR THE YEAR ENDED December 31, 1996
(In thousands, except per share data)
<TABLE>
<CAPTION>
First Jermyn
and
Upper Valley
First Jermyn Upper Valley Adjustments Combined
<S> <C> <C> <C> <C>
Interest income........ $22,722 $17,217 -- $39,939
Interest expense....... 11,401 9,122 -- 20,523
Net interest income.... 11,321 8,095 -- 19,416
Provision for
loan losses.......... 183 650 -- 833
Net interest income
after provision for
loan losses.......... 11,138 7,445 -- 18,583
Other non-interest
income............... 1,136 1,118 -- 2,254
Non-interest expense... 7,462 6,562 -- 14,024
Income before taxes.... 4,812 2,001 -- 6,813
Income taxes........... 1,308 435 -- 1,743
Net income............. $ 3,504 $ 1,566 -- $ 5,070
Earnings per share,
basic(1)............. $ 3.96 $ 1.57 -- $ 3.22
Earnings per share,
diluted(2)........... 3.96 1.55 -- 3.21
</TABLE>
_____________________
(1) Combined basic earnings per share are calculated based on
combined net income divided by the sum of (i) the weighted
average number of shares of First Jermyn Common Stock
outstanding during 1996 of 884,680 shares plus (ii) the
weighted average number of shares of Upper Valley Common
Stock outstanding during 1996 of 1,000,000 shares multiplied
by the Exchange Ratio.
(2) Combined diluted earnings per share are calculated based on
combined net income divided by the sum of (i) the weighted
average number of shares of First Jermyn Common Stock
outstanding during 1996 of 884,680 shares plus (ii) the
weighted average number of diluted shares of Upper Valley
Common Stock outstanding during 1996 of 1,008,533 multiplied
by the Exchange Ratio.
PAGE 5
<PAGE>
PRO FORMA UNAUDITED COMBINED CONDENSED INCOME STATEMENT
FOR THE YEAR ENDED December 31, 1995
(In thousands, except per share data)
<TABLE>
<CAPTION>
First Jermyn
and
Upper Valley
First Jermyn Upper Valley Adjustments Combined
<S> <C> <C> <C> <C>
Interest income........ $21,492 $16,235 -- $37,727
Interest expense....... 10,282 9,669 -- 19,951
Net interest income.... 11,210 6,566 -- 17,776
Provision for
loan losses.......... 365 1,000 -- 1,365
Net interest income
after provision for
loan losses.......... 10,845 5,566 -- 16,411
Other non-interest
income............... 582 887 -- 1,469
Non-interest expense... 6,804 6,786 -- 13,590
Income (loss) before
taxes................ 4,623 (333) -- 4,290
Income tax expense
(benefit)............ 1,369 (500) -- 869
Net income............. $ 3,254 $ 167 -- $ 3,421
Earnings per share,
basic and diluted(1). $ 3.68 $ .17 -- $ 2.17
</TABLE>
_____________________
(1) Combined basic earnings per share are calculated based on
combined net income divided by the sum of (i) the weighted
average number of shares of First Jermyn Common Stock
outstanding during 1995 of 884,680 shares plus (ii) the
weighted average number of shares of Upper Valley Common
Stock outstanding during 1995 of 1,000,000 shares multiplied
by the Exchange Ratio. <PAGE 6>
