UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1996
Commission File No. 33-12756-B
COMMUNITY BANCORP, INC.
A Massachusetts Corporation
IRS Employer Identification No. 04-2841993
17 Pope Street, Hudson, Massachusetts 01749
Telephone - (508) 568-8321
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for 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
Common Stock
$2.50 par value
3,192,677 shares outstanding
as of July 25, 1996
<PAGE>
COMMUNITY BANCORP, INC.
TABLE OF CONTENTS
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Cash Flow 5-6
Notes to Consolidated Financial Statemements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-12
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
EXHIBITS Proxy Statement dated March 20, 1996 15-19
Financial Data Schedule (EX-27, Article 9) 20
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<TABLE>
PART I - FINANCIAL INFORMATION
COMMUNITY BANCORP, INC.
Item 1. CONSOLIDATED BALANCE SHEETS
<CAPTION>
June 30, December 31,
----------------------------
1996 1995
------------ ------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 14,922,936 $ 12,668,446
Federal funds sold 10,300,000 16,700,000
Securities available for sale, at market 28,905,416 23,790,470
Securities held to maturity (market value
$53,574,634 at 6/30/96 and $50,633,376
at 12/31/95) 54,517,459 50,825,359
Loans 128,908,753 128,072,061
Less allowance for possible loan losses 3,499,516 3,455,098
----------- -----------
Total net loans 124,409,237 124,616,963
Premises and equipment, net 4,915,757 5,126,083
Other assets, net 3,744,324 3,853,475
----------- -----------
Total assets $242,715,129 $237,580,796
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits
Noninterest bearing $ 45,973,690 $ 45,383,886
Interest bearing 164,349,892 161,655,979
----------- -----------
Total deposits 210,323,582 207,039,865
----------- -----------
Federal funds purchased and securities
sold under repurchase agreements 10,078,675 9,289,963
Other liabilities 1,467,592 1,710,295
----------- -----------
Total liabilities 221,869,849 207,039,865
----------- -----------
Commitments
Stockholders' equity:
Preferred stock, $2.50 par value, 100,000
shares authorized, none issued or outstanding
Common stock, $2.50 par value, 4,000,000
shares authorized, 3,199,218 shares issued,
3,192,677 shares outstanding, (3,140,754
shares outstanding at December 31, 1995) 7,998,045 7,998,045
Surplus 374,581 290,253
Undivided profits 12,629,713 11,463,544
Treasury stock, 6,541 shares, (40,272
shares at December 31, 1995) (29,435) (181,224)
Unrealized losses on securities available
for sale, net (127,624) (29,945)
----------- -----------
Total stockholders' equity 20,845,280 19,540,673
----------- -----------
Total liabilities and
stockholders' equity $242,715,129 $237,580,796
=========== ===========
<FN>
See accompanying notes.
</TABLE>
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<TABLE>
COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
Three months ended Six months ended
June 30, June 30,
--------------------- --------------------
1996 1995 1996 1995
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $3,121,407 $3,075,590 $6,222,421 $6,027,822
Interest and div. on securities:
Taxable interest 1,137,476 998,718 2,182,085 2,010,584
Nontaxable interest 23,686 24,771 45,256 48,136
Dividends 13,548 5,495 26,537 25,847
Interest on federal funds sold 123,001 31,159 302,517 33,509
--------- --------- --------- ---------
Total interest income 4,419,118 4,135,733 8,778,816 8,145,898
--------- --------- --------- ---------
Interest expense:
Deposits 1,430,007 1,380,992 2,930,440 2,662,398
Short term borrowings 123,874 143,471 240,832 291,996
--------- --------- --------- ---------
Total interest expense 1,553,881 1,524,463 3,171,272 2,954,394
--------- --------- --------- ---------
Net interest income 2,865,237 2,611,270 5,607,544 5,191,504
Provision for loan losses 0 30,000 0 60,000
--------- --------- --------- ---------
Net interest income after
provision for loan losses 2,865,237 2,581,270 5,607,544 5,131,504
--------- --------- --------- ---------
Noninterest income:
Merchant credit card assessments 195,016 159,037 401,382 329,730
Service charges 195,388 172,334 381,510 349,560
Other charges, commissions, fees 181,237 183,796 351,824 348,832
Gains (losses) on sales of
loans, net 4,436 (37,882) 19,939 (50,608)
Other 17,842 19,995 33,137 41,761
--------- --------- --------- ---------
Total noninterest income 593,919 497,280 1,187,792 1,019,275
--------- --------- --------- ---------
Noninterest expense:
Salaries and benefits 1,144,023 1,125,754 2,250,679 2,132,751
Data processing 150,970 110,213 291,269 223,856
Occupancy, net 132,338 156,264 289,566 303,917
Furniture and equipment 82,217 77,626 173,606 160,497
Credit card processing 170,942 139,317 330,144 273,567
Other 464,645 496,685 905,260 995,757
--------- --------- --------- ---------
Total noninterest expense 2,145,135 2,105,859 4,240,524 4,090,345
--------- --------- --------- ---------
Income before income taxes 1,314,021 972,691 2,554,812 2,060,434
Income taxes 518,035 435,079 998,002 817,220
--------- --------- --------- ---------
Net income $ 795,986 $ 537,612 $1,556,810 $1,243,214
========= ========= ========= =========
Earnings per share $ .250 $ .171 $ .491 $ .396
Dividends per share $ .062 $ .058 $ .123 $ .115
Weighted average number of shares 3,179,333 3,140,748 3,169,139 3,140,751
<FN>
See accompanying notes.
</TABLE>
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<TABLE>
COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Six months ended
June 30,
---------------------------
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Interest received $ 8,691,380 $ 8,170,602
Fees and commissions received 1,249,303 1,034,735
Proceeds from secondary market
mortgage sales 8,858,377 2,230,942
Origination of mortgage loans for
secondary market sales (7,895,977) (1,929,041)
Interest paid (3,223,425) (2,979,467)
Cash paid to suppliers & employees (3,908,440) (3,499,723)
Income taxes paid (992,795) (741,709)
---------- ----------
Net cash provided by operating activities 2,778,423 2,286,339
---------- ----------
Cash flows from investing activities:
Purchases of securities held to maturity (9,586,198) (417,000)
Proceeds from maturities of securities
held to maturity 5,939,184 1,140,071
Purchases of securities available for sale (8,403,017
Proceeds from maturities of securities
available for sale 3,072,767 3,172,003
Net change in federal funds sold 6,400,000 5,400,000
Net change in loans and other real estate
owned (1,698,799) (6,639,467)
Proceeds from sale of other real estate
owned 97,700
Acquisition of property, plant and equipment (174,204) (274,231)
---------- ----------
Net cash provided by (used in)
investing activities (4,450,267) 2,479,076
---------- ----------
Cash flows from financing activities:
Net change in deposits 3,283,717 700,536
Net change in federal funds purchased (1,000,000) (10,900,000)
Net change in repurchase agreements 1,788,712 6,878,710
Purchase of treasury stock (240)
Sale of treasury stock 236,137
Dividends paid (382,232) (354,065)
---------- ----------
Net cash provided by (used in)
financing activities 3,926,334 (3,675,059)
---------- ----------
Net increase in cash and due from banks 2,254,490 1,090,356
Cash and due from banks at beginning
of period 12,668,446 11,600,385
---------- ----------
Cash and due from banks at end of period $14,922,936 $12,690,741
========== ==========
<FN>
See accompanying notes.
</TABLE>
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<TABLE>
COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Reconciliation of Net Income to Net Cash Provided by Operating Activities
<CAPTION>
Six months ended
June 30,
--------------------------
1996 1995
----------- -----------
<S> <C> <C>
Net income $ 1,556,810 $ 1,243,214
Adjustments to reconcile net income
to net cash provided by operating
activities:
Decrease in mortgage loans held for sale 791,145 125,891
Premium on sale of mortgages 171,255 176,010
Depreciation and amortization 420,855 366,956
Provision for loan losses 60,000
Increase (decrease) in other liabilities (88,786) 223,674
Increase in taxes payable 5,207 75,511
(Decrease) in interest payable (52,153) (25,073)
Decrease in other assets 61,511 15,457
Decrease (increase) in interest receivable (87,421) 24,699
---------- ----------
Total adjustments 1,221,613 1,043,125
---------- ----------
Net cash provided by operating activities $ 2,778,423 $ 2,286,339
========== ==========
<FN>
See accompanying notes.
</TABLE>
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COMMUNITY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
________________________________________________________________________
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and notes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. The results of operations for
any interim period are not necessarily indicative of results
expected for the full year. These consolidated financial statements
should be read in conjunction with the consolidated financial
statements and notes thereto contained in the Company's Annual
Report to shareholders and Form 10-K for the year ended December 31,
1995.
2. EARNINGS PER SHARE
Earnings per share calculations are based on the weighted average
number of common shares outstanding during the period.
3. FINANCIAL ACCOUNTING STANDARDS BOARD STATEMENT NO. 122, "ACCOUNTING
FOR MORTGAGE SERVICING RIGHTS"
Beginning January 1, 1996, the Company adopted Financial Accounting
Standards Board Statement No. 122, "Accounting for Mortgage
Servicing Rights" (SFAS No. 122), which requires the capitalization
of the cost of originating the rights to service mortgage loans for
others. In addition, capitalized mortgage servicing rights are
required to be assessed for impairment based on the fair value of
those rights. The adoption of SFAS No. 122 resulted in the Company
recording $30,315 in income associated with the origination of
mortgage servicing rights during the six months ended June 30, 1996.
-7-
<PAGE>
PART I - FINANCIAL INFORMATION
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Summary
- -------
The Company recorded net income of $1,556,810 for the six months
ended June 30, 1996, representing an increase of $313,596 or 25.2% over
$1,243,214 for the same period in 1995. Earnings per share of $.491 for
the current period represented an increase of $.095 from $.396 for the
six months ended June 30, 1995.
The Company recorded net income of $795,986 for the three months
ended June 30, 1996, representing an increase of $258,374 or 48.1% over
$537,612 for the corresponding period in 1995. Earnings per share of
$.250 for the current period represented an increase of $.079 from $.171
for the same period in 1995.
The improvement in net income resulted primarily from an increase in
net interest income and noninterest income, and a decrease in the
provision for possible loan losses and F.D.I.C. deposit insurance
premiums.
Deposits of $210,323,582 at June 30, 1996 increased by $3,283,717 or
1.6% from $207,039,865 at December 31, 1995. This increase occurred
primarily in interest bearing deposit categories. Interest bearing
deposits increased by $2,693,913, primarily in the areas of NOW and
savings accounts. Noninterest bearing deposits increased by $589,804,
primarily in the area of personal demand deposit accounts.
Loans of $128,908,753 at June 30, 1996 increased by $836,692 or .7%
from $128,072,061 at December 31, 1995. This increase occurred in the
commercial, residential construction and consumer loan portfolios.
Noncurrent loans (nonaccrual loans and loans 90 days or more past due
but still accruing) totalled $1,887,793 and $1,810,267 at June 30, 1996
and December 31, 1995, respectively. There were no accruing troubled
debt restructurings at June 30, 1996 or December 31, 1995.
Assets of $242,715,129 at June 30, 1996 represented a $5,134,333 or
2.2% increase from $237,580,796 at December 31, 1995.
Six Months ended June 30, 1996 as Compared To
Six Months ended June 30, 1995
---------------------------------------------
Net Interest Income
- -------------------
Interest income for the six months ended June 30, 1996 was
$8,778,816, representing an increase of $632,918 or 7.8% from $8,145,898
for the six months ended June 30, 1995, primarily due to higher loan and
securities balances in 1996. Interest expense was $3,171,272,
representing an increase of $216,878 or 7.3% from $2,954,394 for the six
months ended June 30, 1995, primarily due to higher interest bearing
deposit balances in 1996. Net interest income for the six months ended
June 30, 1996 was $5,607,544, representing an increase of $416,040 or
8.0% from $5,191,504 for the six months ended June 30, 1995.
-8-
<PAGE>
Noninterest Income and Expense
- ------------------------------
Noninterest income for the six months ended June 30, 1996 was
$1,187,792, representing an increase of $168,517 or 16.5% from
$1,019,275 for the six months ended June 30, 1995. This increase was
primarily the result of increases in merchant credit card assessments,
service charges, and gains on sales of loans.
Noninterest expense for the six months ended June 30, 1996 of
$4,240,524 was up $150,179 or 3.7% from $4,090,345 for the same period
in 1995. This increase was primarily the result of increases in
salaries and employee benefits, data processing, furniture and
equipment, occupancy and credit card processing, partially offset by a
reduction in other expense, including F.D.I.C. deposit insurance
premiums.
Provision for Loan Losses
- -------------------------
The provision for loan losses for the six months ended June 30, 1996
was $0, representing a $60,000 or 100.0% decrease from $60,000 for the
same period in 1995. This decrease was the result of management's
continuing evaluation of the adequacy of the allowance for loan losses
and its belief that the allowance is adequate.
Income Taxes
- ------------
Income tax expense of $998,002 for the six months ended June 30,
1996 compared to $817,220 for the same period in 1995, the result of an
increase in taxable income during the current period.
Net Income
- ----------
Net income of $1,556,810 for the first six months of 1996
represented an increase of $313,596 or 25.2% from $1,243,214 recorded
for the first six months of 1995. Earnings per share of $.491 for the
current period represented an increase of $.095 from $.396 for the six
months ended June 30, 1995.
Three Months ended June 30, 1996 as Compared To
Three Months ended June 30, 1995
-----------------------------------------------
Net Interest Income
- -------------------
Interest income for the three months ended June 30, 1996 was
$4,419,118, representing an increase of $283,385 or 6.9% from $4,135,733
for the three months ended June 30, 1995. The increase was primarily
due to higher loan and securities balances in 1996. Interest expense
was $1,553,881, representing an increase of $29,418 or 1.9% from
$1,524,463 for the three months ended June 30, 1995, primarily due to
higher interest bearing deposit balances in 1996. Net interest income
for the three months ended June 30, 1996 was $2,865,237, representing
an increase of $253,967 or 9.7% from $2,611,270 for the same period in
1995.
-9-
<PAGE>
Noninterest Income and Expense
- ------------------------------
Noninterest income for the three months ended June 30, 1996 was
$593,919, representing an increase of $96,639 or 19.4% from $497,280 for
the three months ended June 30, 1995. This increase was primarily the
result of increases in merchant credit card assessments, service
charges, and gains on sales of loans.
Noninterest expense for the three months ended June 30, 1996 of
$2,145,135 was up $39,276 or 1.9% from $2,105,859 for the three months
ended June 30, 1995. This increase was primarily the result of
increases in salaries and employee benefits, data processing, furniture
and equipment, occupancy and credit card processing, partially offset by
a reduction in other expense, including F.D.I.C. deposit insurance
premiums.
Provision for Loan Losses
- -------------------------
The provision for loan losses for the three months ended June 30,
1996 was $0, representing a $30,000 or 100.0% decrease from $30,000 for
the three months ended June 30, 1995. This decrease was the result of
management's continuing evaluation of the adequacy of the allowance for
loan losses and its belief that the allowance is adequate.
Income Taxes
- ------------
Income tax expense of $518,035 for the three months ended June 30,
1996 compared to $435,079 for the three months ended June 30, 1995, the
result of an increase in taxable income during the current period.
Net Income
- ----------
Net income of $795,986 for the three months ended June 30, 1996
represented an increase of $258,374 or 48.1% over $537,612 for the three
months ended June 30, 1995. Earnings per share of $.250 for the current
period represented an increase of $.079 from $.171 for the three months
ended June 30, 1995.
Allowance for Possible Loan Losses
- ----------------------------------
The allowance for possible loan losses is maintained at a level
believed by management to be adequate to absorb potential losses in the
loan portfolio. Management's methodology in determining the adequacy of
the allowance considers specific credit reviews, past loan loss
experience, current economic conditions and trends and the volume,
growth and composition of the loan portfolio. Each loan on the
Company's internal Watch List is evaluated periodically to estimate
potential losses. For loans with potential losses, the bank sets aside
or "allocates" a portion of the ALLL against such potential losses. For
the remainder of the portfolio, "unallocated" reserve amounts are
determined based on judgements regarding the type of loan, economic
conditions and trends, potential exposure to loss and other factors.
The allowance for possible loan losses is charged when management
determines that the repayment of the principal on a loan is in doubt.
Subsequent recoveries, if any, are credited to the allowance. At June
30, 1996, the balance in the allowance was $3,499,516, representing 2.7%
of total loans, compared to $3,455,098 or 2.7% of total loans at
December 31, 1995.
-10-
<PAGE>
Securities
- ----------
The Company's securities portfolio consists of obligations of the
U.S. Treasury, U.S. government sponsored agencies, mortgage backed
securities and obligations of municipalities in the Company's market
area. Those assets are used in part to secure public deposits and as
collateral for repurchase agreements.
Total securities were $83,422,875 at June 30, 1996, representing an
increase of $8,807,046 or 11.8% from $74,615,829 at December 31, 1995.
At June 30, 1996, $28,905,416 in securities were classified as
"available for sale". There were no sales of securities during the six
months ended June 30, 1996.
Liquidity and Capital Resources
- -------------------------------
The Company's primary sources of liquidity are customer deposits,
amortization and pay-offs of loan principal and maturities of investment
securities. These sources provide funds for loan originations, the
purchase of investment securities and other activities. Deposits are
considered a relatively stable source of funds. At June 30, 1995, 1994
and 1993, deposits were $210.3, $187.6 and $177.1 million, respectively.
Management anticipates that deposits will remain relatively stable or
grow moderately during the remainder of 1996.
As a nationally chartered member of the Federal Reserve System, the
Bank has the ability to borrow funds from the Federal Reserve Bank of
Boston by pledging certain of its investment securities as collateral.
Also, the Bank is a member of the Federal Home Loan Bank which provides
additional borrowing opportunities.
Bank regulatory authorities have established a capital measurement
tool called "Tier 1" leverage capital. A 3.00% ratio of Tier 1 capital
to assets now constitutes the minimum capital standard for banking
organizations. At June 30, 1996, the Company's Tier 1 leverage capital
ratio was 8.62%. In addition, regulatory authorities have also
implemented risk-based capital guidelines requiring a minimum ratio of
Tier 1 capital to risk weighted assets of 4.00% and a minimum ratio of
total capital to risk-weighted assets of 8.00. At June 30, 1996 the
Company's Tier 1 and total risk-based capital ratios were 15.12% and
16.39%, respectively. Both the Company and the Bank are categorized as
"well capitalized" under the Federal Deposit Insurance Corporation
Improvement Act of 1991 (F.D.I.C.I.A.).
The Board of Directors declared a second quarter 1996 cash dividend
of $.062 per share of common stock to shareholders of record at June 1,
1996, payable on July 15, 1996.
Asset/Liability Management
- --------------------------
The Company has an asset/liability management committee which
oversees all asset/liability activities of the Company. The committee
establishes general guidelines each year and meets regularly to review
the Company's operating results and to make strategic changes when
necessary.
-11-
<PAGE>
It is the Company's general policy to reasonably match the rate
sensitivity of its assets and liabilities. A common benchmark of this
sensitivity is the one year gap position, which is a reflection of the
difference between the speed and magnitude of rate changes of interest
rate sensitive liabilities as compared with the Bank's ability to adjust
the rates of it's interest rate sensitive assets in response to such
changes. The Company's positive cumulative one year gap position at
June 30, 1996, representing the excess of repricing assets versus
repricing liabilities within a one year time frame, was 4.1% of total
assets.
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PART II - OTHER INFORMATION
---------------------------
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Annual Meeting of Shareholders was held on April 9, 1996. At
that meeting, two (2) matters were put before the shareholders for vote.
Proxies for the meeting were solicited, and a copy of the Proxy
Statement dated March 20, 1996 is incorporated herein by reference and
attached hereto as an exhibit. Such Proxy Statement provides a
description of the matters put before the shareholders for vote and
provides other information required under this Item 4.
The results of the voting were as follows:
1. To fix the number of Directors who shall constitute the full Board
of Directors at eleven.
Votes for: 2,261,655
Votes against: 3,768
2. To elect as Directors the five individuals listed as nominees in
the Proxy Statement, who, together with the six Directors whose
terms of office did not expire at this meeting, constitute the full
Board of Directors.
Director Votes For Votes Against
-------- --------- --------------
I. George Gould 2,269,075 7,268
Donald R. Hughes, Jr. 2,269,075 7,268
James A. Langway 2,269,075 7,268
David L. Parker 2,269,075 7,268
David W. Webster 2,269,075 7,268
Item 5. OTHER INFORMATION
At its July 16, 1996 meeting, the Company's Board of Directors voted
to implement a self-tender offer for its Common Stock in August of
1996. The Company will repurchase a percentage of its outstanding
shares of Common Stock with the intention of increasing return on
equity by redeploying a portion of existing capital that is not
necessary for the Company's core banking business.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(b) The Company filed a Form 8-K on May 31, 1996, reporting the
adoption of a Shareholders' Rights Agreement by the Company's Board
of Directors on May 21, 1996. A copy of the complete Shareholder
Rights Agreement was included with the Form 8-K filing as an
exhibit.
-13-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMMUNITY BANCORP, INC.
-----------------------
Date: July 26, 1996 By: /s/ James A. Langway
-----------------------------------
James A. Langway
President & Chief Executive Officer
Principal Executive Officer
Date: July 26, 1996 By: /s/ Donald R. Hughes, Jr.
----------------------------------
Donald R. Hughes, Jr.
Treasurer and Clerk
Principal Financial Officer and
Principal Accounting Officer
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<PAGE>
COMMUNITY BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 9, 1996
The following information is furnished in connection with the
solicitation of proxies by the management of Community Bancorp, Inc.
("Corporation"), whose principal executive office is located at 17 Pope
Street, Hudson, Massachusetts, (Telephone: 508-568-8321), for use at
the Annual Meeting of Shareholders of the Corporation to be held on
Tuesday, April 9, 1996.
As of March 1, 1996, 3,158,946 shares of common stock of the Corporation
were outstanding and entitled to be voted.
The record date and hour for determining shareholders entitled to vote
has been fixed at 5 o'clock p.m., March 1, 1996. Only shareholders of
record at such time will be entitled to notice of, and to vote at, the
meeting. Shareholders are urged to sign the enclosed form of proxy
solicited on behalf of the management of the Corporation and return it
at once in the envelope enclosed for that purpose. The proxy does not
affect the right to vote in person at the meeting and may be revoked
prior to its exercise. Proxies will be voted in accordance with the
shareholder's directions.
If no directions are given, proxies will be voted to fix the number of
Directors of the Corporation at eleven; and to elect Donald R. Hughes,
Jr. and David W. Webster to the Board of Directors of the Corporation to
serve until the Annual Meeting of Shareholders in 1998 and until their
successors are duly elected and qualified to serve; and to elect I.
George Gould, James A. Langway and David L. Parker to the Board of
Directors of the Corporation to serve until the Annual Meeting of
Shareholders in 1999 and until their successors are duly elected and
qualified to serve.
The financial statements of the Corporation for 1995 have been mailed to
the shareholders with the mailing of this Notice and Proxy Statement.
The cost of the solicitation of proxies is being paid by the
Corporation. The Proxy Statement will be mailed to shareholders of the
Corporation on or about March 20, 1996.
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<PAGE>
DETERMINATION OF NUMBER OF DIRECTORS
AND ELECTION OF DIRECTORS
The persons named as proxies intend to vote to fix the number of
Directors for the ensuing year at eleven and vote for the election of
the persons named below as Nominees for Election at This Meeting as
Directors, each to hold office until the annual meeting held in the
year indicated in the column designated "Term of Office." If any
nominee should not be available for election at the time of the
meeting, the persons named as proxies may vote for another person in
their discretion or may vote to fix the number of Directors at less
than eleven. The management does not anticipate that any nominee
will become unavailable.
The By-Laws of the Corporation provide in substance that the
Board of Directors shall be divided into three classes as nearly
equal in number as possible, and that the term of office of one class
shall expire and a successor class be elected at each annual meeting
of the shareholders.
The present number of Directors is eleven. It is proposed by
the Board that at the meeting the number of Directors who shall
constitute the full Board of Directors until the next annual meeting
be fixed at eleven and that the five nominees listed below be elected
to serve until the date indicated opposite their names. All of the
nominees are currently Directors.
Opposite the name of each nominee and each continuing Director
in the following table is shown: (1) the number of shares of stock
of the Corporation owned beneficially by each such person; (2) for
those persons serving as Directors of the Corporation, the date on
which such person's term of office as Director began; (3) the term of
office for which such person will serve; and (4) such person's
current principal occupation or employment.
-16-
<PAGE>
Nominees For Election at This Meeting
Has Served
on Board of
Shares of Directors
Stock Owned of the
Beneficially Corporation
as of or Its Term
March 1, Predecessor of Principal
Name 1996 (1) Since Office Occupation
I. George Gould 117,499 1962 1999 Director of
(2) Corporation and Hudson
National Bank;
Chairman, Gould's, Inc.
Donald R. Hughes, Jr. 88,853 1995 1998 Director of
(2) Corporation and Hudson
National Bank;
Treasurer and Clerk of
the Corporation;
Executive Vice
President and Cashier
of Hudson National
Bank.
James A. Langway 137,060 1976 1999 Director of
(2) Corporation and Hudson
National Bank;
President and CEO of
the Corporation and of
Hudson National Bank.
David L. Parker 22,274 1986 1999 Director of
Corporation and Hudson
National Bank;
Treasurer, Larkin
Lumber Co.
David W. Webster 30,860 1995 1998 Director of
Corporation and Hudson
National Bank;
President & Treasurer,
A. T. Knight Fuel Co.,
Inc.
-17-
<PAGE>
Directors Continuing in Office
Has Served
on Board of
Shares of Directors
Stock Owned of the
Beneficially Corporation
as of or Its Term
March 1, Predecessor of Principal
Name 1996 (1) Since Office Occupation
Alfred A. Cardoza 22,486 1971 1997 Director of
Corporation and Hudson
National Bank; Retired.
Argeo R. Cellucci 6,728 1968 1997 Director of
Corporation and Hudson
National Bank;
President, Cellucci
Hudson Corp.
Antonio Frias 101,938 1985 1997 Director of
Corporation and Hudson
National Bank;
President and
Treasurer, S & F
Concrete Contractors.
Horst Huehmer 22,632 1980 1998 Director of
Corporation and Hudson
National Bank; Retired.
Dennis F. Murphy, Jr. 442,640 1984 1997 Chairman of the Board
of Corporation and
Hudson National Bank;
Director of
Corporation and Hudson
National Bank;
President & Treasurer,
D.F. Murphy Insurance
Agency, Inc.
Mark Poplin 170,174 1967 1998 Director of
Corporation and Hudson
National Bank;
President & Treasurer,
Poplin Supply Co.;
Secretary, Poplin
-18-
<PAGE>
Notes:
1. Beneficial ownership of stock for the purpose of this
statement includes securities owned by the spouse and minor
children and any relative with the same address. Certain
Directors may disclaim beneficial ownership of certain of
the shares listed beside their names.
2. Includes 56,853 shares held by CBI ESOP as to which Messrs.
Gould, Hughes and Langway are co-trustees.
The affirmative vote of the holders of a majority of the common stock
of the Corporation present or represented and voting at the meeting
is required to fix the number of Directors. The affirmative vote of
a plurality of the votes cast by shareholders is required to elect
Directors.
OTHER MATTERS
The management knows of no business which will be presented for
consideration at the meeting other than that set forth in this Proxy
Statement. However, if any such business comes before the meeting,
the persons named as proxies will vote thereon according to their
best judgment.
By order of the Board of Directors
/s/ James A. Langway
_____________________
James A. Langway
President
Hudson, Massachusetts
March 20, 1996
-19-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited June 30, 1996 consolidated financial statements of Community Bancorp,
Inc. and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
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0
0
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</TABLE>
