Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
For the period ended: June 30, 1997
--------------------------
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
For the transition period from to
-------------------- ------------------------
Commission File Number: 0-14671
-------------
REPUBLIC SECURITY FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
FLORIDA 59-2335075
------------------------------ ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4400 Congress Avenue, West Palm Beach, Florida 33402
----------------------------------------------------
(Address of principal executive offices)(Zip Code)
(561) 840-1200
---------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 1 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.
[ X ] YES [ ] NO
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Outstanding as of August 11, 1997
- ----- ---------------------------------
Common Stock 16,147,107
par value $.01
outstanding
<PAGE>
[GRAPHIC OMITTED]
REPUBLIC SECURITY FINANCIAL CORPORATION AND SUBSIDIARIES
INDEX
Page
Number
Part I: Financial Information
Item 1:
Condensed Consolidated Statements of Financial
Condition - June 30, 1997 and December 31, 1996......................1
Condensed Consolidated Statements of Income
for the three months ended June 30, 1997 and 1996....................2
Condensed Consolidated Statements of Income for
the six months ended June 30, 1997 and 1996..........................3
Condensed Consolidated Statements of Shareholders'
Equity for the year ended December 31, 1996 and for the
six months ended June 30, 1997.......................................4
Condensed Consolidated Statements of Cash Flows
for the six months ended June 30, 1997 and 1996......................5
Notes to Condensed Consolidated Financial Statements.................6-8
Item 2:
Management's Discussion and Analysis.................................9-11
Signatures................................................................12
Part II: Other Information
Item 6: Exhibits and Reports Filed......................................13
Exhibit 3(ii) - Amended and Restated Bylaws
Exhibit 11 - Computation of Per Share Earnings
<PAGE>
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
======================================================================================================================
JUNE 30, DECEMBER 31,
1997 1996
(amounts in thousands except share and per share data) (Note 1)
- ----------------------------------------------------------------------------- ------------------- --------------------
<S> <C> <C>
Assets (unaudited)
Cash and amounts due from depository institutions $17,633 $17,642
Interest-bearing deposits in other financial institutions 28,351 34,430
Federal funds sold 8,000 13,025
Investments available-for-sale 81,782 49,670
Investments held-to-maturity (market value of $13,348 and $46,003 at
June 30, 1997 and December 31, 1996, respectively) 13,377 45,818
Loans receivable - net 434,653 400,574
Loans held for sale (market value of $7,850) 7,773
Property and equipment - net 15,191 14,289
Other real estate owned - net 517 1,499
Goodwill - net 7,391 7,675
Loan servicing rights - net 1,776 2,032
Accrued interest receivable 3,661 3,572
Other assets 12,527 9,160
- ----------------------------------------------------------------------------- ------------------- --------------------
Total $624,859 $607,159
============================================================================= =================== ====================
Liabilities and Shareholders' Equity
Liabilities:
Deposits $488,206 $489,056
Federal Home Loan Bank advances 41,000 30,000
Securities sold under agreements to repurchase 13,207 8,633
Advances from borrowers for taxes and insurance 4,055 1,613
Bank drafts payable 5,300 4,158
Other liabilities 8,489 7,535
- ----------------------------------------------------------------------------- ------------------- --------------------
Total liabilities 560,257 540,995
- ----------------------------------------------------------------------------- ------------------- --------------------
Commitments and Contingencies
Shareholders' equity:
Preferred stock $10.00 stated value; 20,000,000 shares authorized: Series "C" -
1,035,000 shares issued and outstanding at June 30, 1997
and December 31, 1996 10,350 10,350
Common stock $.01 par value; 100,000,000 and 20,000,000 shares authorized
at June 30, 1997 and December 31, 1996, respectively;
16,147,107 and 15,532,664 shares issued and outstanding at
June 30, 1997 and December 31, 1996, respectively 161 155
Additional paid-in capital 38,647 37,350
Retained earnings 15,438 18,306
Unrealized gain on investments available-for-sale, net of taxes 6 3
- ----------------------------------------------------------------------------- ------------------- --------------------
Total shareholders' equity 64,602 66,164
- ----------------------------------------------------------------------------- ------------------- --------------------
Total $624,859 $607,159
============================================================================= =================== ====================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
===================================================================================================================
Three Months Ended June 30,
(amounts in thousands except per share data) 1997 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INTEREST INCOME: (Unaudited)
Interest and fees on loans $9,872 $9,282
Interest and dividends on investments 1,769 1,194
- -------------------------------------------------------------------------------------------------------------------
11,641 10,476
- -------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
Interest on deposits 4,156 3,911
Interest on borrowings 622 69
- -------------------------------------------------------------------------------------------------------------------
4,778 3,980
- -------------------------------------------------------------------------------------------------------------------
Net interest income 6,863 6,496
Provision for loan losses 800 80
- -------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses 6,063 6,416
NON-INTEREST INCOME:
Gain on sale of loans 137 266
Service charges on deposit accounts 1,043 1,014
Other income 536 397
- -------------------------------------------------------------------------------------------------------------------
1,716 1,677
- -------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
Employee compensation and benefits 3,085 2,805
Occupancy and equipment 1,073 880
Professional fees 274 308
Advertising and promotions 187 170
Communications 201 153
Data processing 191 207
Insurance 99 200
Other 1,159 765
Merger expenses 3,979
- -------------------------------------------------------------------------------------------------------------------
10,248 5,488
- -------------------------------------------------------------------------------------------------------------------
(Loss) income before taxes (2,469) 2,605
(Benefit) provision for income taxes (818) 975
- -------------------------------------------------------------------------------------------------------------------
Net (loss) income $(1,651) $1,630
===================================================================================================================
PER SHARE DATA:
Primary (loss) earnings per common share $(.11) $.09
Dividends per common share $ .06 $.05
Avg. common shares and common stock equivalents outstanding 16,008 15,526
===================================================================================================================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
===================================================================================================================
Six Months Ended June 30,
(amounts in thousands except per share data) 1997 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INTEREST INCOME: (Unaudited)
Interest and fees on loans $19,213 $18,295
Interest and dividends on investments 3,583 2,556
- -------------------------------------------------------------------------------------------------------------------
22,796 20,851
- -------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
Interest on deposits 8,227 7,818
Interest on borrowings 1,081 182
- -------------------------------------------------------------------------------------------------------------------
9,308 8,000
- -------------------------------------------------------------------------------------------------------------------
Net interest income 13,488 12,851
Provision for loan losses 825 155
- -------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses 12,663 12,696
- -------------------------------------------------------------------------------------------------------------------
NON-INTEREST INCOME:
Gain on sale of loans 183 281
Gain on sale of investments available-for-sale 163
Service charges on deposit accounts 2,003 1,859
Other income 976 983
- -------------------------------------------------------------------------------------------------------------------
3,325 3,123
- -------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
Employee compensation and benefits 5,588 5,389
Occupancy and equipment 2,012 1,738
Professional fees 488 556
Advertising and promotions 323 316
Communications 380 339
Data processing 382 356
Insurance 160 320
Other 1,883 1,576
Merger expenses 3,979
- -------------------------------------------------------------------------------------------------------------------
15,195 10,590
- -------------------------------------------------------------------------------------------------------------------
Income before taxes 793 5,229
Provision for income taxes 297 1,898
- -------------------------------------------------------------------------------------------------------------------
Net income $496 $3,331
===================================================================================================================
PER SHARE DATA:
Primary earnings per common share $.01 $.18
Dividends per common share $.11 $.10
Avg. common shares and common stock equivalents outstanding 16,635 15,493
===================================================================================================================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
====================================================================================================================================
Unrealized
Additional Gain on Securities
Preferred Common Paid-in Retained Available-for-Sale,
(amounts in thousands except share and per share data) Stock Stock Capital Earnings Net of Taxes
- ------------------------------------------------------- ------------- ------------ ------------ ----------- ----------------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1995 (restated) $14,365 $141 $32,058 $15,262 $150
Exercise of warrants - 268,126 shares 3 1,039
Conversion of preferred stock series "A"
into common stock - 982,995 shares (3,980) 10 3,970
Issuance of stock grants - 9,000 shares 32
Issuance of stock for Dividend Reinvestment and
Optional Stock Purchase Plan - 2,586 shares 13
Exercise of stock options - 4,622 shares 12
Cash redemption of preferred stock series "A" (35)
Issuance of common stock - 110,812 1 226
Cash dividends - common stock (2,910)
Cash dividends - preferred stock series "A" and "C" (886)
Net income 6,840
Change in unrealized gain on investments
available-for-sale, net of taxes (147)
- ------------------------------------------------------- ------------- ------------ ------------ ----------- ---------------------
Balance, December 31, 1996 10,350 155 37,350 18,306 3
Exercise of warrants - 614,228 shares 6 1,270
Issuance of stock grants - 3,000 shares 27
Cash dividends - common stock (546)
Cash dividends paid by pooled company - common stock (2,456)
Cash dividends - preferred stock series "C" (362)
Net income 496
Change in unrealized gain on investments
available-for-sale, net of taxes 3
- ------------------------------------------------------- ------------- ------------ ------------ ----------- ---------------------
Balance, June 30, 1997 $10,350 $161 $38,647 $15,438 $6
===================================================================================================================================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
===================================================================================================================
SIX MONTHS JUNE 30,
(unaudited)
(amounts in thousands) 1997 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating Activities:
Net income $496 $3,331
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 825 155
Depreciation 624 528
Amortization of goodwill 284 180
Gain on sale of loans -trading, loans and servicing (183) (281)
Loan costs deferred 166 145
Loans originated for sale (7,808) (7,014)
Sale of loans and loan participation certificates 22,583 15,313
Other - net 3,568 (2,070)
- -------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 20,555 10,287
- -------------------------------------------------------------------------------------------------------------------
Investing Activities:
Cash and cash equivalents acquired in merger-net 15,235
Purchases of investments available-for-sale (11,665) (2,086)
Proceeds from sale and maturities of investments available-for-sale 17,305 1,457
Maturities and calls of investments held-to-maturity 3,492 12,020
Purchases of investments held-to-maturity (8,944) (13,768)
Net increase in loans (41,787) (4,903)
Purchases of property and equipment (2,531) (1,139)
Other - net (201) 1,217
- -------------------------------------------------------------------------------------------------------------------
Net cash (used in) provided by investing activities (44,331) 8,033
- -------------------------------------------------------------------------------------------------------------------
Financing Activities:
Net (decrease) increase in demand deposits, NOW accounts,
Money Market accounts and savings accounts (824) 9,401
Net decrease in certificates of deposit (26) (17,942)
Increase (decrease) in FHLB advances 11,000 (20,000)
Increase (decrease) in securities sold under agreements to repurchase 4,574 (2,265)
Cash dividend payments (3,364) (2,945)
Other - net 1,303 1,274
- -------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 12,663 (32,477)
- -------------------------------------------------------------------------------------------------------------------
Decrease in cash and cash equivalents (11,113) (4,157)
Cash and cash equivalents at beginning of period 65,097 69,647
- -------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $53,984 $55,490
====================================================================================================================================
<FN>
For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks and federal funds sold.
Generally, federal funds are purchased and sold for one-day periods. The Company paid $1,678,000 and $1,880,000 in income taxes
during the six months ended June 30, 1997 and 1996, respectively. The Company paid $9,220,000 and $6,256,000 in interest on
deposits and other borrowings during the six months ended June 30, 1997 and 1996, respectively. The Company had $895,000 and
$736,000 of transfers from loans to OREO during the six months ended June 30, 1997 and 1996, respectively. Assets of $62 million
were acquired and $57 million liabilities assumed related to the merger of Banyan Bank during the six months ended
June 30, 1996.
====================================================================================================================================
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
5
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1997
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial
statements include the accounts of Republic Security Financial
Corporation (the "Company" or "RSFC") and its wholly-owned subsidiary,
Republic Security Bank (the "Bank"). In the opinion of the Company's
management, the financial statements contain all adjustments
(consisting of normal recurring accruals except for merger expenses
(See Note 2)) considered necessary to present fairly the consolidated
financial position of Republic Security Financial Corporation and its
subsidiary as of June 30, 1997 and December 31, 1996, and the results
of operations for the three and six months ended June 30, 1997 and
1996, and changes in cash flows for the six months then ended. The
unaudited condensed consolidated financial statements have been
restated to include the accounts and results of operations of Family
Bank (see Note 2).
The accompanying unaudited condensed 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 Regulations S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. Operating results for the three and six months
ended June 30, 1997 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1997. For further
information, refer to the consolidated financial statements and
footnotes thereto included in Republic Security Financial Corporation's
annual report on Form 10-K for the year ended December 31, 1996.
The balance sheet at December 31, 1996 has been derived from
the audited financial statements at that date but does not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
2. Merger
On June 30, 1997, RSFC issued 8,289,125 shares of its common
stock in exchange for all outstanding common stock of Family Bank
("Family") a Florida commercial bank. This business combination has
been accounted for as a pooling-of-interests combination and,
accordingly, the unaudited condensed consolidated financial statements
for periods prior to the combination have been restated to include the
accounts and results of operations of Family Bank. In connection with
the Family merger the Company incurred approximately $4 million in
merger expenses.
The results of operations previously reported by the separate
companies and the combined amounts presented in the accompanying
unaudited condensed consolidated financial statements are summarized
below.
<TABLE>
<CAPTION>
===========================================================================================================
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
- -----------------------------------------------------------------------------------------------------------
Revenue: (Unaudited) (Unaudited)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
RSFC $7,796 $7,310 $15,351 $14,429
Family 5,561 4,843 10,770 9,545
- -----------------------------------------------------------------------------------------------------------
Combined $13,357 $12,153 $26,121 $23,974
===========================================================================================================
Net Income (loss):
RSFC (1) $(2,911) $655 $(2,045) $1,324
Family 1,260 975 2,541 2,007
- -----------------------------------------------------------------------------------------------------------
Combined $(1,651) $1,630 $496 $3,331
===========================================================================================================
<FN>
(1) The three and six months ended June 30, 1997, includes merger costs
of $2.5 million, net of taxes, related to the Family Bank acquisition.
The merger costs consist of approximately $1.6 million in professional
fees, $1 million in data processing conversion costs and $1.4 million
in costs associated with the integration of operations and other
expenses.
</FN>
</TABLE>
Securities held by Family with a book value of approximately
$39.4 million and a market value of approximately $39.5 million at June
30, 1997, were transferred from held-to-maturity to available-for-sale
to maintain RSFC's existing interest rate risk position for the
combined company.
6
<PAGE>
3. Potential Merger
On August 8, 1997, the Company and the Bank entered into a
definitive agreement whereby County National Bank of South Florida
("County"), a national chartered, commercial bank, will merge with
Republic Security Bank. The definitive agreement provides for a fixed
exchange ratio whereby shareholders of County will receive 4.807 shares
of Republic Security Financial Corporation common stock for each share
of County common stock. The Company will issue approximately 6.1
million shares of Republic Security Financial Corporation common stock
for all outstanding common shares of County stock in a tax free
exchange. Management anticipates the transaction will be accounted for
as a pooling-of-interests. County is headquartered in North Miami
Beach, Florida with 14 branch locations in Northern Dade, Broward and
Palm Beach counties. County has total assets, loans, deposits and
equity of approximately $238 million, $139 million, $210 million and
$23 million, respectively, at June 30, 1997 the transaction is subject
to regulatory approvals and approval by the Companies' shareholders.
4. Non-Performing Assets and Allowance for Loan Losses
At June 30, 1997, the Bank had $6.2 million in non-performing
assets (loans 90 days or more past due, other real estate owned and
repossessed assets). The provision for loan losses was $825,000 and
$155,000 for the six months ended June 30, 1997 and 1996, respectively.
The increase in the provision for loan losses from the quarter ended
June 30, 1996 compared to the quarter ended June 30, 1997 is due to the
realignment of Family's loan loss reserve policy to that of the Bank,
an increase from December 31, 1996 of $1.6 million in non performing
loans associated with one single family residential loan and a
downgrade of a $330,000 commercial loan in the quarter ended June 30,
1997.
Although management uses its best judgement in underwriting
each loan, industry experience indicates that a portion of the Bank's
loans will become delinquent. Regardless of the underwriting criteria
utilized by financial institutions, losses may be experienced as a
result of many factors beyond their control including, among other
things, changes in market conditions affecting the value of security
and unrelated problems affecting the credit of the borrower. Due to the
concentration of loans in South Florida, adverse economic conditions in
this area could result in a decrease in the value of a significant
portion of the Bank's collateral.
In the normal course of business, the Bank has recognized and
will continue to recognize losses resulting from the inability of
certain borrowers to repay loans and the insufficient realizable value
of collateral securing such loans. Accordingly, management has
established an allowance for loan losses, which totaled $4.8 million at
June 30, 1997.
The allowance for credit losses is maintained at a level
believed adequate by management to absorb estimated probable credit
losses. Management's periodic evaluation of the adequacy of the
allowance is based on the Company's past loan loss experience, known
and inherent risks in the portfolio, adverse situations that may affect
the borrower's ability to repay (including the timing of future
payments), the estimated value of any underlying collateral,
composition of the loan portfolio, current economic conditions, and
other relevant factors. This evaluation is inherently subjective as it
requires material estimates including the amounts and timing of future
cash flows expected to be received on impaired loans that may be
susceptible to significant change.
5. Commitments and Contingencies
Commitments to extend credit are agreements to lend to a
customer as long as there is no violation of any condition established
in the contract. Commitments generally have fixed expiration dates or
other termination clauses and may require the payment of a fee. The
total commitment amounts do not necessarily
7
<PAGE>
represent future cash requirements as some commitments expire without
being drawn upon. The Bank evaluates each customer's credit worthiness
on a case by case basis. The amount of collateral obtained, if deemed
necessary by the Bank, upon extension of credit is based on
management's credit evaluation of the counter party.
At June 30, 1997, the Bank had adjustable rate commitments to
extend credit of approximately $60 million excluding the undisbursed
portion of loans-in-process. These commitments are primarily for
commercial lines of credit secured by commercial real estate or other
business assets, and for one-to-four family residential properties .
In addition to the above commitments and contingencies, there
are various matters of litigation pending against the Company that
management has reviewed with legal counsel. In the opinion of the
Company's management, amounts accrued for awards or assessments in
connection with these matters are adequate and ultimate resolution of
these matters will not have a material effect on the Company's
consolidated financial position, results of operations or cash flow.
On August 6, 1997, a final judgement was ordered on a pending
litigation matter against the Company whereby the Company will pay
approximately $400,000 to the plaintiff in the matter. The Company had
accrued approximately $400,000 related to this pending litigation at
June 30, 1997.
6. Income per Common Share
Primary income per common share is computed by dividing net
income less preferred stock dividends by the weighted average number of
shares of common stock and common stock equivalents outstanding during
the period. Fully diluted net income per common share is calculated by
dividing net income by the average number of common stock and common
stock equivalents outstanding during the year, plus the assumed
conversion of all outstanding convertible preferred shares to common
shares to the extent those shares are dilutive. Common stock
equivalents for both primary and fully diluted net income per share
include stock options, warrants, and equity contracts and are included
in the computation of earnings per share using the treasury stock
method. Convertible preferred stock is computed using the "if
converted" method, which assumes the conversion of all outstanding
convertible preferred shares into common shares.
In March 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 ("SFAS 128"),
"Earnings Per Share". SFAS 128 requires companies with complex capital
structures that have publicly held common stock or common stock
equivalents to present both basic and diluted earnings per share
("EPS") on the face of the income statement. The presentation of basic
EPS replaces the presentation of primary EPS currently required by
Accounting Principles Board Opinion No. 15 ("APB No. 15"), "Earnings
Per Share". Basic EPS is calculated as income available to common
stockholders divided by the weighted average number of common shares
outstanding during the period. Diluted EPS (previously referred to as
fully diluted EPS) is calculated using the "if converted" method for
convertible securities and the treasury stock method for options and
warrants as prescribed by APB No. 15. This statement is effective for
financial statements issued for interim and annual periods ending after
December 15, 1997. The Company does not believe the adoption of SFAS
128 in fiscal 1998 will have a significant impact on the Company's
reported EPS.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Comparison of the Three and Six Months Ended June 30, 1997 and 1996
Results of Operations
The Company had a net loss of $(1,651,000) or $(.11) per common share
for the three months ended June 30, 1997 compared to net income of $1,630,000 or
$.09 per common share for the three months ended June 30, 1996. Net income for
the six months ended June 30, 1997 was $496,000 or $.01 per common share
compared to net income of $3,331,000 or $.18 per common share for the six months
ended June 30, 1996. The decrease in net income for the three and six months
ended June 30, 1997 is primarily due to the one-time merger expenses of
$3,979,000 ($2,500,000, net of income taxes), associated with the Family Bank
acquisition which closed on June 30, 1997. Net income for the quarter and six
months ended June 30, 1997 was also impacted by an increase of $720,000 and
$670,000, respectively, for the provision for loan losses and an increase of
$480,000 and $510,000, respectively, in Stock Appreciation Rights ("SARs")
accrual compared to the quarter and six months ended June 30, 1996. These
increases in expenses were partially offset by a $367,000 or 6% increase in net
interest income for the three months ended June 30, 1997 compared to the three
months ended June 30, 1996. Net interest income increased $637,000 or 5% and non
interest income increased $202,000 or 7% for the six months ended June 30, 1997
compared to the six months ended June 30, 1996.
Net Interest Income
Net interest income for the quarter ended June 30, 1997 increased
$367,000 compared to the quarter ended June 30, 1996 due to an increase of
$73,000,000 in interest-earning assets offset by a decrease in net interest
margin of 42 basis points. Average outstanding loans increased approximately
$40,000,000 and investments increased approximately $33,000,000 while average
interest bearing deposits increased approximately $25,000,000 and average
borrowings increased approximately $35,000,000 for the three months ended June
30, 1997 compared to the three months ended June 30, 1996. The Bank purchased
$25,000,000 of mortgage-backed securities in December 1996 which were funded by
a $25,000,000 Federal Home Loan Bank advance. The decrease in net interest
margin for the three months ended June 30, 1997 compared to the three months
ended June 30, 1996 is primarily a result of the $25,000,000 leverage
transaction and also a result of a slight decrease in the yield on the loan
portfolio.
Net interest income increased $637,000 or 5% for the six months ended June 30,
1997 compared to the six months ended June 30, 1996. The increase is due to a
$61,000,000 or 12% increase in interest earning assets offset by a decrease in
net interest margin of 42 basis points.
Provision for Loan Losses
The provision for loan losses increased $720,000 for the three months
ended June 30, 1997 compared to the three months ended June 30, 1996 due
primarily to (i) the realignment of Family's loan loss reserve policy to that of
the Bank, (ii) an increase from December 31, 1996 of $1,600,000 in non
performing loans associated with one single family residential loan and (iii) a
downgrade of a $330,000 commercial loan in the quarter ended June 30, 1997. For
the six months ended June 30, 1997, the provision for loan losses increased
$670,000 compared to the six months ended June 30, 1996.
Non-Interest Income
Non-interest income increased $202,000 for the six months ended June
30, 1997 compared to the six months ended June 30, 1996 primarily due to
increases of $144,000 in service charge on deposit accounts and $163,000 in gain
on sale of investments, offset by a decrease of $98,000 in gain on sale of
loans. No significant change occurred in non-interest income for the three
months ended June 30, 1997 compared to the three months ended June 30, 1996.
9
<PAGE>
Management's Discussion and Analysis
of Financial Condition and Results of Operations (Continued)
- --------------------------------------------------------------------------------
Operating Expenses
Operating expenses increased $3,979,000 for the quarter and six months
ended June 30, 1997 compared to the quarter ended June 30, 1996 due to merger
expenses associated with the Family Bank acquisition which closed on June 30,
1997. Operating expenses, excluding the merger expenses, increased 781,000 or
14% for the three months ended June 30, 1997 compared to the three months ended
June 30, 1996. The increase in operating expenses is due primarily to increases
of $280,000 in employee compensation and benefits expenses, $193,000 in
occupancy and equipment expenses and $394,000 in other operating expenses offset
by a decrease of $101,000 in insurance expense. Other operating expenses
increased due primarily to non recurring expenses of $100,000 associated with
the start-up of the trust services division and $150,000 fixed asset write-off
associated with the relocation of a branch. The increase in employee
compensation and benefits expenses is due to the accrual of $480,000 for Stock
Appreciation Rights (SARs) which became "in-the-money" during the quarter ended
June 30, 1997 offset by non recurring payroll expenses of $80,000 in the quarter
ended June 30, 1996 associated with the absorption of the Banyan Bank
acquisition which closed in January 1996 and employee compensation savings as a
result of the elimination of certain positions which took place in June 1996.
Occupancy and equipment expenses increased for the three months ended June 30,
1997 compared to the three months ended June 30, 1996 due primarily to an
increase in depreciation expense of $100,000 and a one-time payment of $50,000
for early cancellation of a lease. The increase in depreciation expense is due
to an increase in equipment associated with the change in data processing
bureaus which took place in August 1996. Insurance expense decreased $101,000
for the three months ended June 30, 1997 compared to the three months ended June
30, 1996 due primarily to a decrease of approximately $ 65,000 in Federal
Deposit Insurance Corporation ("FDIC") premiums and $20,000 in other insurance
premiums. The FDIC premiums were reduced for all deposits effective January 1,
1997 after the one-time special Savings Insurance Association Fund assessment
made in September 1996 to recapitalize the fund.
Operating expenses, excluding merger costs, increased $626,000 or 6%
for the six months ended June 30, 1997 compared to the six months ended June 30,
1996. The increase in operating expenses is due primarily to increases of
$199,000 in employee compensation and benefits, $274,000 increase in occupancy
and equipment expenses and $307,000 in other operating expenses offset by a
decrease of $160,000 in insurance expense. Employee compensation and benefits
increased approximately $510,000 related to SARs accrual offset by $180,000 of
non recurring employee compensation expenses in the six months ended June 30,
1996 associated with the absorption of the Banyan Bank acquisition and employee
compensation savings as a result of the elimination of certain positions which
took place in June 1996. Occupancy and equipment expenses increased for the six
months ended June 30, 1997 compared to the six months ended June 30, 1996 due to
an increase in equipment associated with the change in data processing bureaus
which took place in August 1996 and a one-time payment of $50,000 for early
cancellation of a lease. Other operating expenses increased due primarily to non
recurring expenses of $100,000 associated with the start-up of the trust
services division and $150,000 fixed asset write-off associated with the
relocation of a branch. Insurance expense decreased for the six months ended
June 30, 1997 compared to the six months ended June 30, 1996 due to an
approximate savings of $130,000 in FDIC premiums, a decrease of approximately
$40,000 in other insurance premiums and a $50,000 FDIC premium refund received
in January 1997 offset by an increase in FDIC premiums associated with an
increased deposit base of approximately $40,000,000.
Provision for Income Taxes
Income tax expenses decreased $1,793,000 for the three months ended
June 30, 1997 compared to the three months ended June 30, 1996 due to a decrease
of $5,074,000 in income before taxes. Income taxes decreased $1,601,000 for the
six months ended June 30, 1997 compared to the six months ended June 30, 1996
due to a decrease of $4,436,000 in income before taxes. Income before income
taxes decreased for the three and six months ended June 30, 1997 compared to the
three and six months ended June 30, 1996 due primarily to merger expenses of
$3,979,000 associated with the Family Bank acquisition which closed on June 30,
1997.
10
<PAGE>
Liquidity, Sources of Capital and Capital Requirements
As a member of the Federal Home Loan Bank System, the Bank is subject
to regulations which require it to maintain "long term" liquidity ratios. The
majority of the liquid assets of the bank are investments available-for-sale,
deposits with the Federal Home Loan Bank of Atlanta and federal funds sold. The
Bank was in compliance with liquidity requirements during the six months ended
June 30, 1997.
On certain occasions, demand for loan funds may exceed cash available
from deposits. On such occasions, the Bank may borrow funds from the Federal
Home Loan Bank of Atlanta, draw on lines of credit with commercial banks and/or
enter into repurchase agreements on eligible investments.
Cash and cash equivalents decreased by approximately $11,000,000 during
the six months ended June 30, 1997. The decrease in cash is due primarily to
loan originations and purchases net of principal paydowns, of approximately
$50,000,000, dividend payments of approximately $3,000,000 and fixed asset
purchases of approximately $2,500,000 offset by approximately $22,500,000 in
loan sales and $15,5000,000 in an increase in FHLB advances and securities sold
under agreements to repurchase. A $16,000,000 purchase of 1-4 family residential
loans was made during the six months ended June 30, 1997 while the majority of
loan originations related to commercial business and commercial real estate
loans.
The following table shows the capital amounts and ratios of the Bank at
June 30, 1997
===============================================================================
(Dollars in thousands) Amount Ratio
- -------------------------------------------------------------------------------
Total risk based capital $52,346 12.3%
Tier 1 risk based capital $47,201 11.1%
Leverage capital $47,201 7.8%
===============================================================================
The Bank was in compliance with its' capital requirements at June 30,
1997.
Financial Condition
As of June 30, 1997, total assets increased approximately $18,000,000
or 3% from December 31, 1996. Loans-net increased approximately $34,000,000
which was funded by a decrease of approximately $11,000,000 in interest bearing
deposits in other institutions and federal funds sold, the sale of approximately
$8,000,000 of loans held for sale, an increase in FHLB advances of $11,000,000
and an increase in securities sold under agreements to repurchase of
approximately $4,000,000. The overall increase in total assets of approximately
$18,000,000 is primarily a result of an increase of $11,000,000 in FHLB advances
and a $4,000,000 increase in securities sold under agreements to repurchase.
11
<PAGE>
REPUBLIC SECURITY FINANCIAL CORPORATION
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.
Republic Security Financial Corporation
----------------------------------------
(Registrant)
Date: August 14, 1997 /s/ Carla H. Pollard
--------------- ---------------------------------------
Carla H. Pollard
Vice President/Controller
12
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are included herein:
Ex-3 (ii) - Amended and Restated By-Laws of Republic Security
Financial Corporation
Ex-11 - Statement regarding Computation of Earnings Per Share
(b) A report on Form 8-K was filed on July 10, 1997 for the merger with
Family Bank on June 30, 1997
F:\DOCS\10Q\1997\10Q-JUN.97
13
AMENDED AND RESTATED
BYLAWS
OF
REPUBLIC SECURITY FINANCIAL CORPORATION
(a Florida corporation)
F:\DOCS\10Q\1997\EXH3(II).J97
<PAGE>
INDEX
Page
ARTICLE I
Offices...........................................................- 1 -
Section 1.01. Principal Office................................- 1 -
Section 1.02. Registered Office...............................- 1 -
Section 1.03 Other Offices...................................- 1 -
ARTICLE II
Meetings of Shareholders..........................................- 1 -
Section 2.01. Annual Meeting..................................- 1 -
Section 2.02. Special Meetings................................- 1 -
Section 2.03. Place of Meetings...............................- 1 -
Section 2.04. Voting Lists....................................- 1 -
Section 2.05. Fixing of a Record Date.........................- 2 -
Section 2.06. Notice of Meetings..............................- 2 -
Section 2.07. Precondition to Delivery of
Notice of Special Meeting of
Shareholders Called by Shareholders.............- 2 -
Section 2.08. Quorum..........................................- 2 -
Section 2.09. Adjournment.....................................- 2 -
Section 2.10. Organization....................................- 3 -
Section 2.11. Voting..........................................- 3 -
Section 2.12. Proxies.........................................- 4 -
Section 2.13. Action by Shareholders Without a Meeting........- 4 -
ARTICLE III
Board of Directors................................................- 4 -
Section 3.01. Powers and Duties...............................- 4 -
Section 3.02. Qualification and Election......................- 5 -
Section 3.03. Number and Term of Office.......................- 5 -
Section 3.04. Organization....................................- 5 -
Section 3.05. Place of Meetings...............................- 5 -
Section 3.06. Annual Meetings.................................- 5 -
Section 3.07. Regular Meetings................................- 5 -
Section 3.08. Special Meetings................................- 5 -
Section 3.09. Action by Written Consent Without a Meeting.....- 5 -
Section 3.10. Conference Telephone Meetings...................- 5 -
Section 3.11. Quorum..........................................- 6 -
Section 3.12. Voting..........................................- 6 -
Section 3.13. Adjournment.....................................- 6 -
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Section 3.14. Compensation....................................- 6 -
------------
Section 3.15. Resignations....................................- 6 -
------------
Section 3.16. Vacancies.......................................- 6 -
---------
Section 3.17. Removal.........................................- 6 -
-------
Section 3.18. Executive and Other Committees..................- 6 -
------------------------------
ARTICLE IV
Notice and Waiver of Notice.......................................- 8 -
Section 4.01. Notice..........................................- 8 -
Section 4.02. Waiver of Notice................................- 8 -
ARTICLE V
Officers..........................................................- 8 -
Section 5.01. Number and Qualification........................- 8 -
Section 5.02. Election and Term of Office. ...................- 8 -
Section 5.03. Subordinate Officers, Committees and Agents.....- 8 -
Section 5.04. The Chairman of the Board. ....................- 8 -
Section 5.05. The President. ................................- 9 -
Section 5.06. The Vice Presidents.............................- 9 -
Section 5.07. The Secretary. ................................- 9 -
Section 5.08. The Treasurer. ................................- 9 -
Section 5.09. Salaries and Compensation. ....................- 9 -
Section 5.10. Resignations. .................................- 9 -
Section 5.11. Removal. .....................................- 10 -
Section 5.12. Vacancies. ...................................- 10 -
ARTICLE VI
Certificates of Stock, Transfer..................................- 10 -
Section 6.01. Share Certificates, Issuance. ................- 10 -
Section 6.02. Transfer. ....................................- 10 -
Section 6.03. Registered Shareholders. .....................- 10 -
Section 6.04. Lost, Destroyed or Mutilated Certificates. ...- 10 -
ARTICLE VII
Indemnification of Directors, Officers,
Employees and Agents .....................- 10 -
Section 7.01. Directors, Officers, Employees and Agents. ...- 10 -
Section 7.02. Expenses. ....................................- 11 -
Section 7.03. Determination of Standard of Conduct. ........- 11 -
Section 7.04. Advance Expenses. ............................- 11 -
Section 7.05. Benefit. .....................................- 11 -
Section 7.06. Insurance. ...................................- 12 -
Section 7.07. No Rights of Subrogation. ....................- 12 -
Section 7.08. Indemnification for Past Directors. ..........- 12 -
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<PAGE>
Section 7.09. Affiliates. ..................................- 12 -
----------
Section 7.10. Reliance and Non-Exclusivity. ................- 12 -
----------------------------
Section 7.11. Other Indemnifications. ......................- 12 -
----------------------
Section 7.12. Amendments. ..................................- 12 -
----------
ARTICLE VIII
Miscellaneous...................................................- 12 -
Section 8.01. Checks. .....................................- 12 -
Section 8.02. Dividends. ..................................- 12 -
Section 8.03. Deposits. ...................................- 13 -
Section 8.04. Fiscal Year. ................................- 13 -
Section 8.05. Severability. ...............................- 13 -
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ARTICLE I
Offices
Section 1.01. Principal Office. The principal office of the
corporation in the State of Florida, which may be the registered office, shall
be established at such place as the board of directors shall from time to time
determine.
Section 1.02. Registered Office. The registered office of
the corporation in the State of Florida shall be at the office of its registered
agent as stated in the articles of incorporation or as the board of directors
shall from time to time determine.
Section 1.03 Other Offices. The corporation may have
additional offices at such other places, either within or without the State of
Florida, as the board of directors may from time to time determine or the
business of the corporation may require.
ARTICLE II
Meetings of Shareholders
Section 2.01. Annual Meeting. The annual meeting of
shareholders shall be held after the close of each fiscal year on such date and
at such time as determined by the board of directors. The shareholders entitled
to vote at such meeting shall elect the directors and shall transact such other
business as may properly be brought before the meeting.
Section 2.02. Special Meetings. Special meetings of the
shareholders of the corporation may be called, for any purpose or purposes
permitted by law, by the board of directors on its own initiative and shall be
called by the board of directors upon written request by the chairman of the
board, president of the corporation, or, upon delivery to the secretary of one
or more written demands for the meeting describing the purpose or purposes for
which it is to be held, by the holders of not less than twenty-five percent of
all the shares entitled to be cast on any issue proposed to be considered at the
proposed special meeting. Notice of such meeting shall be given by the secretary
as provided herein. Only business within the purpose or purposes described in
the special meeting notice may be conducted at a special shareholders' meeting.
Section 2.03. Place of Meetings. All meetings of the
shareholders of the corporation shall be held at such place within or without
the State of Florida as shall be designated from time to time by the board of
directors and stated in the notice of such meeting or in a duly executed waiver
of notice thereof.
Section 2.04. Voting Lists. The officer or agent of the
corporation having charge of the stock transfer books for shares of the
corporation shall make, at least ten days before each meeting of shareholders, a
complete list of the shareholders entitled to vote at the meeting and any
adjournment thereof, arranged in alphabetical order, with the address of and the
number of shares held by each shareholder, which list shall be kept on file at
the place identified in the meeting notice in the city where the meeting will be
held or the corporation's principal place of business or at the office of its
registrar or transfer agent for a period of at least ten days prior to the
meeting, and shall be subject to inspection by any shareholder at any time
during usual business hours. Such list shall also be produced and kept open at
the time and place of the meeting, and shall be subject to the inspection of any
shareholder during the whole time of the meeting. The original share ledger or
transfer book, or a duplicate thereof, shall be prima facie evidence as to who
are the shareholders entitled to examine such list or share ledger or transfer
book, or to vote, in person or by proxy, at any meeting of the shareholders.
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<PAGE>
Section 2.05. Fixing of a Record Date. The board of
directors may fix in advance a date as the record date for any determination of
shareholders entitled to notice of, or to vote at, any meeting of shareholders,
or entitled to payment of a dividend or allotment of any rights or privileges,
such date in any case to be not more than seventy days and, in the case of a
meeting of shareholders, not less than ten days prior to the date on which the
particular action, requiring such determination of shareholders, is to be taken.
If no record date is fixed for the determination of
shareholders entitled to notice of, or to vote at, a meeting of shareholders, or
shareholders entitled to receive payment of a dividend, the date on which the
secretary mails the notice of the meeting or the date on which the resolution of
the board of directors declaring such dividend is adopted, as the case may be,
shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof, unless the board of
directors fixes a new record date under this section for the adjourned meeting.
The board of directors shall fix a new record date if the meeting is adjourned
to a date more than 120 days after the date fixed for the original meeting.
Section 2.06. Notice of Meetings. Written notice stating the
place, day and hour of every meeting of the shareholders shall be given by the
secretary to each shareholder entitled to vote at such meeting, either
personally or by first class mail, at least ten days, but not more than sixty
days, prior to the day named for the meeting. If mailed, such notice shall be
deemed to be delivered when deposited in the United States first-class mail
postage prepaid, addressed to the shareholder at the shareholder's address as it
appears on the stock transfer books of the corporation.
Section 2.07. Precondition to Delivery of Notice of Special
Meeting of Shareholders Called by Shareholders. The secretary shall inform
shareholders who have delivered a written request for a special meeting and
otherwise complied with Section 2.02 of the reasonably estimated costs of
preparing and mailing a notice of the meeting, and, on payment of these costs to
the corporation, the secretary shall deliver notice of such meeting to each
shareholder entitled thereto.
Section 2.08. Quorum. The presence, in person or by proxy,
of shareholders entitled to cast a majority of the votes which all shareholders
are entitled to cast shall constitute a quorum for such meeting. Treasury
shares, shares of this corporation's stock which are owned by another
corporation the majority of the voting stock of which is owned by this
corporation, and shares of this corporation's stock held by another corporation
in a fiduciary capacity for the benefit of this corporation shall not be counted
in determining the total number of outstanding shares for voting purposes at any
given time. After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof. When a specified item of business is required to be voted
on by any class or series of stock, a majority of the shares of such class or
series shall constitute a quorum for transaction of such item of business by
that class or series.
Section 2.09. Adjournment. When a meeting which is properly
called is adjourned to another time or place, it shall not be necessary to give
any notice of the adjourned meeting if the time and place to which the meeting
is adjourned are announced at the meeting at which the adjournment is taken, and
at the adjourned meeting any business may be transacted that might have been
transacted on the original date or place of the meeting. If, however, after the
adjournment the board of directors fixes a new record date for the adjourned
meeting, a notice of the adjourned meeting shall be given to each shareholder of
record on the new record date entitled to vote at such meeting.
F:\DOCS\10Q\1997\EXH3(II).J97
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<PAGE>
The holders of a majority of the shares represented, and who
would be entitled to vote at a meeting if a quorum were present, where a quorum
is not present, may adjourn such meeting from time to time.
Section 2.10. Organization. At every meeting of the
shareholders, the chairman of the board, if there be one, or in the case of a
vacancy in the office or absence of the chairman of the board, one of the
following officers present in the order stated: the vice chairman of the board,
if there be one, the president, the vice presidents in their order of rank and
then seniority, or a chairman chosen by the shareholders entitled to cast a
majority of the votes which all shareholders present in person or by proxy are
entitled to cast, shall act as chairman, and the secretary, or, in the
secretary's absence, an assistant secretary, or, in the absence of both the
secretary and any assistant secretaries, a person appointed by the chairman,
shall act as secretary.
Section 2.11. Voting. If a quorum is present at any meeting,
action on a matter (other than the election of directors) is approved if the
votes cast in favor exceed the votes cast in opposition, unless the question is
one for which, by express provision of the law or of the articles of
incorporation or these bylaws, a different vote is required, in which case such
express provision shall govern and control the decision of such question.
Except as may be otherwise provided in the articles of
incorporation, every shareholder of record shall have the right, at every
shareholders' meeting, to one vote for every share of stock of the corporation
standing in the shareholder's name on the books of the corporation. A
shareholder may vote either in person or by proxy.
Treasury shares, shares of this corporation's stock which
are owned, directly or indirectly, by another corporation the majority of the
voting stock of which is owned by this corporation, and shares of this
corporation's stock held by another person or corporation in a fiduciary
capacity for the benefit of this corporation shall not be entitled to vote at
any meeting of shareholders.
At each election for directors, every shareholder entitled
to vote for directors shall have the right to vote the number of shares owned by
the shareholder for as many persons as there are directors to be elected at that
time.
Shares standing in the name of another corporation, domestic
or foreign, may be voted by the officer, agent or proxy designated by the bylaws
of the corporate shareholder; or, in the absence of any applicable bylaw, by
such person as the board of directors of the corporate shareholder may
designate. Proof of such designation may be made by presentation of a certified
copy of the bylaws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation, by the
corporate shareholder, the chairman of the board, president, any vice president,
secretary and treasurer of the corporate shareholder shall be presumed to
possess, in that order, authority to vote such shares.
Shares held by an administrator, executor, guardian or
conservator may be voted by such person, either in person or by proxy, without a
transfer of such shares into the name of such person.
Shares standing in the name of a trustee may be voted by
such trustee, either in person or by proxy, but no trustee shall be entitled to
vote shares held by such trustee without a transfer of such shares into the name
of such trustee. Shares held by or under the control of a receiver, a trustee in
bankruptcy proceedings, or an assignee for the benefit of creditors may be voted
by such person or the name of such person's nominee, without the transfer
thereof into such person's name.
A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the name of the
pledgee, and thereafter the pledgee or the nominee of the pledgee shall be
entitled to vote the shares so transferred.
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<PAGE>
Section 2.12. Proxies. Every shareholder entitled to vote at
a meeting of shareholders or to express consent to corporate action in writing
without a meeting may authorize another person or persons to so act by proxy in
accordance with applicable laws.
Section 2.13. Action by Shareholders Without a Meeting.
Unless otherwise provided in the articles of incorporation, any action required
to be taken at any annual or special meeting of shareholders of the corporation,
or any action which may be taken at any annual or special meeting of the
shareholders, may be taken without a meeting, without prior notice and without a
vote, if one or more consents in writing, setting forth the action so taken,
shall be dated and signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted, and delivered to the corporation by delivery to its principal
office in Florida, its principal place of business, the corporate secretary, or
another officer or agent of the corporation having custody of the minute book.
If any class of shares is entitled to vote thereon as a class, such written
consent shall be required of the holders of a majority of the shares of such
class and of the total shares entitled to vote. No written consent shall be
effective to take the corporate action referred to therein unless, within sixty
days of the date of the earliest dated consent delivered in the manner set forth
above, written consents signed by the holders of the number of shares required
to take action are delivered to the corporation by delivery as set forth above.
ARTICLE III
Board of Directors
Section 3.01. Powers and Duties. All corporate powers shall
be exercised by or under the authority of, and the business and affairs of the
corporation shall be managed under the direction of, a board of directors,
except as may be otherwise provided in the Florida Business Corporation Act or
the articles of incorporation.
A director shall perform his or her duties as a director,
including duties as a member of any committee of the board of directors upon
which the director may serve, in good faith, in a manner the director reasonably
believes to be in the best interests of the corporation, and with such care as
an ordinarily prudent person in a like position would use under similar
circumstances. In performing his or her duties, a director shall be entitled to
rely on information, opinions, reports or statements, including financial
statements and other financial data, in each case prepared or presented by:
(1) one or more officers or employees of the corporation whom the director
reasonably believes to be reliable and competent in the matters presented,
(2) counsel, public accountants or other persons as to matters which the
director reasonably believes to be within such person's professional or expert
competence, or
(3) a committee of the board of directors upon which the director does not
serve, duly designated in accordance with provisions of the articles of
incorporation or these bylaws, as to matters within its designated authority,
which committee the director reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if the
director has knowledge concerning the matter in question that would cause such
reliance described in the preceding subsection to be unwarranted.
A person who performs his or her duties in compliance with this section
shall not be liable for any action taken as a director or any failure to take
any action.
A director of the corporation who is present at a meeting of the board of
directors at which action on any corporate matter is taken shall be presumed to
have assented to the action taken, unless the
F:\DOCS\10Q\1997\EXH3(II).J97
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<PAGE>
director votes against such action or abstains from voting in respect thereto
because of an asserted conflict of interest.
Section 3.02. Qualification and Election. Unless otherwise
provided in the articles of incorporation, directors need not be residents of
the State of Florida or shareholders in the corporation. Except in the case of
vacancies, directors shall be elected by the shareholders. Upon the demand of
any shareholder or a proxy at any meeting of shareholders for the election of
directors, the chairman of the meeting shall call for and shall afford a
reasonable opportunity for the making of nominations for the office of director.
If the board of directors is classified with respect to the power to elect
directors or with respect to the terms of directors and if, due to a vacancy or
vacancies, or otherwise, directors of more than one class are to be elected,
each class of directors to be elected at the meeting shall be nominated and
elected separate ly. The candidates receiving the greatest number of votes, up
to the number of directors to be elected, shall be elected directors.
Section 3.03. Number and Term of Office. The board of
directors shall consist of nine directors. The number of directors may be
increased or decreased from time to time by amendment to these bylaws, but no
decrease shall have the effect of shortening the term of any incumbent director.
Each director shall serve until the next annual meeting of the shareholders and
until his or her successor shall have been elected and qualified or until his or
her earlier resignation, removal from office or death.
Section 3.04. Organization. At every meeting of the board of
directors, the chairman of the board, if there be one, or in the absence of the
chairman of the board, the president of the corporation or a chairman chosen by
a majority of the directors present, shall preside, and the secretary or any
person appointed by the chairman of the meeting shall act as secretary of the
meeting.
Section 3.05. Place of Meetings. Meetings of the board of directors of the
corporation, regular or special, may be held either within or without the State
of Florida.
Section 3.06. Annual Meetings. The board of directors shall
hold an annual meeting each year immediately following the annual meeting of the
shareholders at the place where such meeting of the shareholders was held for
the purpose of election of officers and consideration of any other business that
may be properly brought before the meeting. Notice of such annual meetings need
not be given to either old or new members of the board of directors.
Section 3.07. Regular Meetings. If the board of directors
determines to hold regular meetings, such meetings shall be held on such dates
as designated by the board of directors. Notice of such regular meetings need
not be given to any member of the board of directors.
Section 3.08. Special Meetings. Special meetings of the board of directors
may be called by a majority of the directors, the chairman of the board or the
president on two days' prior written notice.
Section 3.09. Action by Written Consent Without a Meeting.
Any action of the board of directors or of any committee thereof, which is
required or permitted to be taken at a regular or special meeting, may be taken
without a meeting if a consent in writing, setting forth the action so to be
taken, signed by all of the members of the board of directors or of the
committee, as the case may be, is filed in the minutes of the proceedings of the
board of directors or committee.
Section 3.10. Conference Telephone Meetings. One or more
members of the board of directors may participate in meetings of the board of
directors or a committee of the board of directors by means of a conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in a meeting
pursuant to this section shall constitute presence in person at such meeting.
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<PAGE>
Section 3.11. Quorum. A majority of the directors in office
shall be present at each meeting in order to constitute a quorum for the
transaction of business. An interested director may be counted in determining
the presence of a quorum at a meeting of the board of directors which
authorizes, approves or ratifies a contract or transaction in which such
director has an interest.
Section 3.12. Voting. Except as otherwise specified in the
articles of incorporation or these bylaws or provided by statute, the acts of a
majority of the directors present at a meeting at which a quorum is present
shall be the acts of the board of directors.
Section 3.13. Adjournment. A majority of the directors
present, regardless of whether or not a quorum exists, may adjourn any meeting
of the board of directors, to another time and place and no notice of any
adjourned meeting need be given, other than by announcement at the meeting.
Section 3.14. Compensation. The board of directors shall
have the authority to fix the compensation of directors. Directors may be
reimbursed their expenses incurred in the performance of their duties as
directors. Directors may be provided with such retirement pensions and benefits
as the board of directors may determine from time to time.
Section 3.15. Resignations. Any director of the corporation
may resign at any time by giving written notice to the president or the
secretary of the corporation. Such resignation shall take effect at the date of
the receipt of such notice or at any later time specified therein and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 3.16. Vacancies. Any vacancy occurring in the board
of directors, including any vacancy created by reason of an increase in the
number of directors, may be filled by the affirmative vote of a majority of the
remaining directors, or by the shareholders in the manner provided in the
Florida Business Corporation Act. A director elected to fill a vacancy shall
hold office only until the next election of directors by the shareholders.
Section 3.17. Removal. The shareholders may remove one or
more directors from office, with or without cause, by a vote or written consent
of the holders of a majority of the shares then entitled to vote (unless the
articles of incorporation provide that directors may be removed only for cause).
In case the board of directors or any such class of the board of directors, or
any one or more directors be so removed, new directors may be elected at the
same meeting or by the same written consent.
Section 3.18. Executive and Other Committees. The board of
directors, by resolution adopted by a majority of the entire board of directors,
may designate from among its members an executive committee and one or more
other committees, each committee to consist of two or more directors. The board
of directors may designate as alternate members of any such committee, one or
more directors who may replace any absent or disqualified member at any meeting
of the committee.
The executive committee or such other such committee shall
have and exercise all of the authority of the board of directors to the extent
provided in the resolution designating the committee, except that no such
committee of the board of directors shall have the authority of the board to:
(1) approve or recommend to shareholders actions or proposals required by
law to be approved by shareholders;
(2) fill vacancies on the board of directors or any committee thereof;
(3) amend or repeal these bylaws;
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(4) authorize or approve the reacquisition of shares unless pursuant to a
general formula or method specified by the board of directors; or
(5) authorize or approve the issuance or sale of or contract for the sale
of shares or determine the designation and relative rights, preferences and
limitations of a voting group unless within limits specifically prescribed by
the board of directors.
A majority of the directors in office designated to a
committee, or directors designated to replace them as provided in this section,
shall be present at each meeting to constitute a quorum for the transaction of
business and the acts of a majority of the directors in office designated to a
committee or their replacements shall be the acts of the committee.
Each committee shall keep regular minutes of its proceedings
and report such proceedings periodically to the board of directors.
Sections 3.05, 3.08, 3.09, 3.10 and 3.11 shall be applicable to committees
of the board of directors.
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ARTICLE IV
Notice and Waiver of Notice
Section 4.01. Notice. Whenever written notice is required to
be given to any director under the provisions of the articles of incorporation,
these bylaws or the Florida Business Corporation Act, it shall be given by
personal delivery, facsimile transmission, delivery to an overnight courier
service or representative, deposit in the United States first-class mail, or by
certified or registered mail, addressed to the address of such person appearing
on the books of the corporation, or supplied by such person to the corporation
for the purpose of notice. A notice of a meeting shall specify the place, day
and hour of the meeting. Notices to shareholders shall be given as provided in
Section 2.06 hereof.
Section 4.02. Waiver of Notice. Whenever any notice is
required to be given under the Florida Business Corporation Act, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice. Except in the case of a special meeting of
shareholders, neither the business to be transacted at, nor the purpose of, the
meeting need be specified in the waiver of notice of such meeting.
Attendance of a person, either in person or by proxy, at any
meeting, shall constitute a waiver of notice of such meeting, in the manner
provided in the Florida Business Corporation Act unless: (a) in the case of a
shareholders meeting, (i) the shareholder objects at the beginning of the
meeting to holding the meeting or transacting business at the meeting or (ii)
with respect to a matter that is not within the purpose or purposes described in
the meeting notice, the shareholder objects when the matter is presented; and
(b) in the case of a directors' or committee meeting, the director states, at
the beginning of the meeting or promptly upon arrival at the meeting, any
objection to the transaction of business because the meeting is not lawfully
called or convened.
ARTICLE V
Officers
Section 5.01. Number and Qualification. The officers of the
corporation shall consist of such officers and agents as may be appointed by the
board of directors. One person may hold more than one office. Officers may but
need not be directors or shareholders of the corporation. The board of directors
may elect from among the members of the board of directors a chairman of the
board who, if elected, shall be an officer of the corporation. A duly appointed
officer may appoint one or more officers or assistant officers to the extent
authorized by the board of directors.
Section 5.02. Election and Term of Office. Except such
officers as may be elected pursuant to Section 5.03, the officers of the
corporation shall be appointed to hold office until the next annual
organizational meeting of directors and until a successor shall have been duly
elected and qualified, or until death, resignation or removal.
Section 5.03. Subordinate Officers, Committees and Agents.
The board of directors may from time to time elect such officers and appoint
such committees, employees or other agents as the board of directors deems the
business of the corporation may require, to hold office for such period, have
such authority, and perform such duties as are provided in these bylaws, or as
the board of directors may delegate.
Section 5.04. The Chairman of the Board. The chairman of the
board, if elected, shall be the chief executive officer of the corporation and
have general powers of supervision, direction and control over the business and
operations of the corporation, subject to the authority of the board of
directors. The chairman of the board shall preside at all meetings of the
shareholders and of the board of directors, and shall perform such other duties
as may from time to time be requested by the board of directors.
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Section 5.05. The President. The president shall be the
chief operating officer of the corporation and shall have general supervision,
direction and control over the business and operations of the corporation,
subject however, to the authority of the chairman of the board and the board of
directors. If the board of directors fails to elect a chairman of the board,
then the president shall also be the chief executive officer of the corporation.
The president shall sign, execute and acknowledge, in the name of the
corporation, deeds, mortgages, bonds, contracts or other instruments except in
cases where the signing and execution thereof shall be expressly delegated by
the board of directors, or by these bylaws, to some other officer or agent of
the corporation; and, in general, shall perform all duties incident to the
office of president and such other duties as from time to time may be assigned
by the chairman of the board and board of directors.
Section 5.06. The Vice Presidents. The vice presidents, if
any, shall perform duties as may from time to time be assigned to them by the
board of directors, the chairman of the board or the president.
Section 5.07. The Secretary. The secretary shall attend all
meetings of the board of directors and committees thereof and shall record the
time and place of holding of such meeting, whether regular or special, and if
special, how authorized, the notice given, the names of those present at
directors' meetings or the number of shares present or represented at
shareholders' meetings in books to be kept for that purpose; shall see that
notices are given and records and reports properly kept and filed by the
corporation as required by law; shall be the custodian of the seal of the
corporation and see that it is affixed to all documents to be executed on behalf
of the corporation under its seal; and, in general, shall perform all duties
incident to the office of secretary, and such other duties as may from time to
time be assigned by the board of directors, the chairman of the board or the
president.
Section 5.08. The Treasurer. The treasurer, if any, shall
have or provide for the custody of the funds or other property of the
corporation and shall keep a separate book account of the same to his credit as
treasurer; shall keep and maintain, or cause to be kept and maintained, adequate
and correct accounts of the properties and business transactions of the
corporation, including, but not limited to, accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital-surplus and shares; shall
collect and receive or provide for the collection and receipt of moneys earned
by or in any manner due to or received by the corporation; shall deposit all
funds in custody as treasurer in such banks or other places of deposit as the
board of directors may from time to time designate; shall, whenever so required
by the board of directors, render an accounting showing transactions as
treasurer and the financial condition of the corporation; and, in general, shall
discharge such other duties as may from time to time be assigned by the board of
directors, the chairman of the board or the president. The books of account
shall be open at all reasonable times to inspection by any director.
Section 5.09. Salaries and Compensation. The salaries, if
any, of the officers elected by the board of directors shall be fixed from time
to time by the board of directors or by such officer as may be designated by
resolution of the board of directors. The salaries or other compensation of any
officers, employees and agents elected, appointed or retained by an officer or
committee to which the board of directors has delegated such a power shall be
fixed from time to time by such officer or committee. No officer shall be
prevented from receiving such salary or other compensation by reason of the fact
that he or she is also a director of the corporation.
Section 5.10. Resignations. Any officer or agent may resign
at any time by giving written notice of resignation to the board of directors or
to the president or the secretary of the corporation. Any such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
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Section 5.11. Removal. Any officer, committee member,
employee or agent of the corporation may be removed, either for or without
cause, by the board of directors or other authority which elected or appointed
such officer, committee member or other agent.
Section 5.12. Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification or any other cause, shall be
filled by the board of directors or by the officer or committee to which the
power to fill such office has been delegated, as the case may be.
ARTICLE VI
Certificates of Stock, Transfer
Section 6.01. Share Certificates, Issuance. Every
shareholder shall be entitled to have a certificate representing all shares to
which the shareholder is entitled; and such certificate shall be signed (either
manually or in facsimile) by the chairman of the board, if any, or by the
president or a vice president and by the secretary or any assistant secretary of
the corporation and may be sealed with the corporate seal or a facsimile
thereof. In the event any officer who has signed, or whose facsimile signature
has been placed upon any share certificate shall have ceased to be such officer
because of death, resignation or otherwise, before the certificate is issued, it
may be issued with the same effect as if the officer had not ceased to be such
at the date of its issue. Certificates representing shares of the corporation
shall otherwise be in such form as provided by statute and approved by the board
of directors. Every certificate exchanged or returned to the corporation shall
be marked "CANCELED", with the date of cancellation.
Section 6.02. Transfer. Transfers of shares shall be made on the books of
the corporation upon surrender of the certificates therefor, endorsed by the
person named in the certificate or by an attorney lawfully constituted in
writing.
Section 6.03. Registered Shareholders. Except as otherwise
expressly set forth in these bylaws, the corporation shall be entitled to
recognize a person registered on its books in whose name any shares of the
corporation are registered as the absolute owner thereof with the exclusive
rights to receive dividends, and to vote such shares as owner. Except as
otherwise provided by law, the corporation shall not be bound to recognize any
equitable or other claim regardless of whether the corporation shall have
express or other notice thereof.
Section 6.04. Lost, Destroyed or Mutilated Certificates. The
holder of any shares of the corporation shall notify the corporation of any
loss, destruction or mutilation of the certificates therefor, and the board of
directors may, in its discretion, cause new certificates to be issued to the
holder, upon satisfactory proof of such loss, destruction or mutilation and, if
the board of directors shall so determine, the deposit of a bond in such form
and in such sum, and with such surety or sureties, as it may direct.
ARTICLE VII
Indemnification of Directors, Officers,
Employees and Agents
Section 7.01. Directors, Officers, Employees and Agents. The
corporation shall indemnify any person who was or is a party or is threatened to
be made a party (which shall include the giving of testimony or similar
involvement) to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by, or in the right of the corporation) by reason of the fact that he or she is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of any other corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees), judgments, fines, and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with such action, suit or proceeding, including any appeal thereof,
if he or she acted in
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good faith in a manner he or she reasonably believed to be in, or not opposed to
the best interests of the corporation, and with respect to any criminal action
or proceedings, had no reasonable cause to believe that his or her conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent shall
not create, of itself, a presumption that the person did not act in good faith
or in a manner which he or she reasonably believed to be in, or not opposed to,
the best interest of the corporation or, with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her conduct was
unlawful.
The corporation shall indemnify any person who was or is a
party, or is threatened to be made a party (which shall include the giving of
testimony or similar involvement), to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he or she is or was a director, officer,
employee or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement (to
the extent permitted by law), including any appeal thereof. Such indemnification
shall be authorized if such person acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable unless, and only to the extent that, the court in which such proceeding
was brought, or any other court of competent jurisdiction, shall determine upon
application that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
Section 7.02. Expenses. To the extent that a director,
officer, employee or agent of the corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to above, or
in any defense of any claim, issue or matter therein, the corporation shall
indemnify such person against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith.
Section 7.03. Determination of Standard of Conduct. Any
indemnification hereunder, unless pursuant to a determination by a court, shall
be made by the corporation as authorized upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because such person has met the applicable standard of conduct set
forth above. Such determination shall be made either (1) by the board of
directors by a majority vote of a quorum consisting of directors who were not
parties to such proceeding, (2) by majority vote of a committee duly designated
by the board of directors consisting of two or more directors not at the time
parties to the proceeding, (3) by the shareholders who were not parties to such
action, suit or proceedings, or (4) by independent legal counsel selected in
accordance with the provisions of the Florida Business Corporation Act in a
written opinion.
Section 7.04. Advance Expenses. Expenses including
attorney's fees incurred in defending any action, suit or proceeding may be paid
by the corporation in advance of the final disposition of such action, suit or
proceeding as authorized in the manner provided above or upon receipt of any
undertaking by or on behalf of the director, officer, employee or agent to repay
such amount, unless it shall ultimately be determined that he or she is not
entitled to be indemnified by the corporation as authorized herein.
Section 7.05. Benefit. The indemnification provided by this
Article VII shall be in addition to the indemnification rights provided pursuant
to the Florida Business Corporation Act and shall not be deemed exclusive of any
other rights to which person seeking indemnification may be entitled under any
by law, agreement, vote of shareholders or disinterested directors or otherwise,
both as to action in such person's official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent of the corporation and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
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Section 7.06. Insurance. The corporation shall be empowered
to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corpo ration, partnership, joint venture, trust or other enterprise
against liability asserted against such person and incurred by him or her in any
such capacity or arising out of his or her status as such, whether or not the
corporation would have the power to indemnify such person against such liability
under the provisions contained herein.
Section 7.07. No Rights of Subrogation. Indemnification
herein shall be a personal right and, the corporation shall have no liability
under this Article VII to any insurer or any person, corporation, partnership,
association, trust or other entity (other than the heirs, executors or
administrators of such per son) by reason of subrogation, assignment or
succession by any other means to the claim of any person to indemnification
hereunder.
Section 7.08. Indemnification for Past Directors.
Indemnification as provided in this section shall continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
Section 7.09. Affiliates. For the purposes of this Article
VII, references to "the corporation" include all constituent corporations
absorbed in a consolidation or merger, as well as the resulting or surviving
corporation, so that any person who is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise shall stand
in the same position under the provisions of this Article VII with respect to
the resulting or surviving corporation as such person would if he or she had
served the resulting or surviving corporation in the same capacity.
Section 7.10. Reliance and Non-Exclusivity. Each person who
shall act as an authorized representative of the corporation shall be deemed to
be doing so in reliance upon such rights of indemnification as are provided in
this Article VII.
Section 7.11. Other Indemnifications. The corporation shall
have the power to make any other or further indemnification, except an
indemnification against gross negligence or willful misconduct, under any bylaw,
agreement, vote of shareholders or disinterested directors, or otherwise, both
as to action in an official capacity and as to action in another capacity while
holding such office.
Section 7.12. Amendments. The provisions of this Article VII
relating to indemnification and to the advancement of expenses shall constitute
a contract between the corporation and each of its directors and officers which
may be modified as to any director or officer only with that person's consent or
as specifically provided in this section. Notwithstanding any other provision of
these bylaws relating to their amendment generally, any repeal or amendment of
this Article VII which is adverse to any director or officer shall apply to such
director or officer only on a prospective basis, and shall not limit the rights
of a director or officer to indemnification or to the advancement of expenses
with respect to any action or failure to act occurring prior to the time of such
repeal or amendment.
ARTICLE VIII
Miscellaneous
Section 8.01. Checks. All checks or demands for money and
notes of the corporation shall be signed by such officer or officers or such
other person or persons as the board of directors may designate from time to
time.
Section 8.02. Dividends. The board of directors, at any regular or special
meeting thereof, subject to any restrictions contained in the articles of
incorporation, may declare and pay dividends
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upon the shares of the corporation's stock in cash, property or the
corporation's shares in accordance with the Florida Business Corporation Act.
Section 8.03. Deposits. All funds of the corporation shall
be deposited from time to time to the credit of the corporation in such
financial institutions or other depositaries as the board of directors may
approve or designate.
Section 8.04. Fiscal Year. The fiscal year of the corporation shall end on
the 31st day of December in each year.
Section 8.05. Severability. The provisions of these bylaws
shall be separable each from any and all other provisions of these bylaws, and
if any such provision shall be adjudged to be invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provision hereof, or
the powers granted to this corporation by the articles of incorporation or
bylaws.
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EXHIBIT 11(a)
<TABLE>
<CAPTION>
STATEMENT 11. RE: Computation of Per Share Earnings
====================================================================================================================================
Three Months Ended June 30, Six Months Ended June
1997 1996 1997 1996
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<S> <C> <C> <C> <C>
PRIMARY EARNINGS:
Average shares outstanding 16,008 14,618 15,685 14,593
Net effect of dilutive stock options, and
warrants based on the modified
treasury stock method using average market price 908 950 900
- ------------------------------------------------------------------------------------------------------------------------------------
Total weighted average number of shares outstanding 16,008 15,526 16,635 15,493
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $(1,651) $1,630 $496 $3,331
Deduct preferred dividends (181) (252) (362) (504)
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Net income available to common shareholders $(1,832) $1,378 $134 $2,827
====================================================================================================================================
Earnings per share $(.11) $.09 $.01 $.18
====================================================================================================================================
<FN>
Note: Fully diluted earnings per share is not presented becuase it is the same as primary earnings per share.
</FN>
</TABLE>
