FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended September 30, 1997
__________________
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to
_____________
Commission file number 0-13423
_______
FNB Rochester Corp.
___________________
(Exact name of registrant as specified in its charter)
New York 16-1231984
_________ __________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
35 State St., Rochester. New York 14614
_________________________________ _________________
Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716) 546-3300
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes __X__ No ______.
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Class Outstanding at November 5, 1997
_____________________________ ________________________________
Common stock, $1.00 par value 3,586,998
<PAGE>
INDEX
Page No.
Part I Financial Information
Condensed consolidated balance sheets -
September 30, 1997 and December 31, 1996 3-4
Condensed consolidated statements of
income for the nine months and three months
ended September 30, 1997 and 1996 5
Condensed consolidated statements of cash
flows for the nine months ended September
30, 1997 and 1996 6-7
Notes to condensed consolidated financial
statements 8-10
Management's discussion and analysis of
financial condition and results of operations 11-14
Part II Other information 15-16
Index of Exhibits 18
<PAGE>
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
FNB ROCHESTER CORP. AND SUBSIDIARY
Condensed Consolidated Balance Sheets (unaudited)
(In thousands, except per share data)
September 30, December 31,
1997 1996
_____________ ____________
<S> <C> <C>
Assets
Cash and due from banks $20,044 $20,060
Interest-bearing deposits with other banks 1,110 1,121
Federal funds sold 1,600 1,500
Securities available-for-sale, at fair value 119,011 72,318
Securities held-to-maturity (fair value of
$27,128 in 1997 and $29,305 in 1996) 27,116 29,532
Loans:
Commercial 200,419 187,721
Mortgage 82,004 71,263
Home Equity 22,073 21,297
Consumer 24,066 23,153
______ ______
Total loans 328,562 303,434
Net deferred loan fees 270 226
Allowance for loan losses (5,526) (5,696)
_______ _______
Net loans 323,306 297,964
Premises and equipment, net 8,439 9,152
Accrued interest receivable 4,055 3,242
FHLB and FRB stock 1,655 1,516
Other assets 1,173 1,493
_____ ______
Total assets $507,509 $437,898
======= =======
Deposits:
Demand:
Non-interest bearing $ 66,503 $ 56,111
Interest bearing 65,182 63,702
Savings and money market 82,242 81,018
Certificates of deposit:
Under $100,000 145,038 141,504
$100,000 and over 100,954 62,436
_______ ______
Total deposits 459,919 404,771
Securities sold under agreement to repurchase
and short-term borrowings 10,680 786
Accrued interest payable and other liabilities 3,753 2,900
Long-term debt 210 210
___ ___
Total liabilities 474,562 408,667
_______ ______
Shareholders' equity:
Common stock, $1 par value; authorized
5,000,000 shares;
issued and outstanding 3,585,064 in 1997 and
3,571,563 in 1996
3,585 3,571
Additional paid in capital 13,207 13,035
Undivided profits 15,309 12,357
Unrealized net holding gain on securities
available-for-sale, net of taxes 846 268
___ ___
Total shareholders' equity 32,947 29,231
______ ______
Total liabilities and $ 507,509 $ 437,898
shareholders' equity ======= =======
See accompanying notes to condensed consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FNB ROCHESTER CORP. AND SUBSIDIARY
Condensed Consolidated Statements of Income (unaudited)
(In thousands, except for share data)
Nine Months ended Three months ended
September 30, September 30,
1997 1996 1997 1996
____ ____ ____ ____
<S> <C> <C> <C> <C>
Interest Income:
Interest fees on loans
Commercial $ 13,542 $ 12,603 $4,681 4,393
Mortgage 4,314 3,306 1,510 1,222
Home equity 1,471 1,403 503 478
Consumer 1,551 1,422 539 516
_____ _____ ____ ____
Total interest and fees
on loans 20,878 18,734 7,233 6,609
Federal funds sold and time
deposits 355 180 148 83
Securities 6,332 4,926 2,349 1,624
_____ _____ _____ _____
Total interest income 27,565 23,840 9,730 8,316
______ ______ _____ _____
Interest expense:
Savings, checking and
money market accounts 2,374 2,317 826 806
Certificates of deposit 9,721 7,474 3,411 2,651
Short-term borrowings and
other 174 104 112 22
___ ___ ___ __
Total interest expense 12,269 9,895 4,349 3,479
______ _____ _____ _____
Net interest income 15,296 13,945 5,381 4,837
Provision for loan losses - - - -
_ _ _ _
Net interest income
after provision for loan
losses 15,296 13,945 5,381 4,867
______ ______ _____ _____
Non-interest income:
Service charges on deposit
accounts 1,271 1,130 452 411
Credit card fees 537 547 163 198
Loan servicing fees 197 203 66 66
Other operating income 485 490 168 195
___ ___ ___ ___
Total non-interest income 2,490 2,370 849 870
_____ _____ ___ ___
Non-interest expense:
Salaries and employee
benefits 7,159 6,849 2,439 2,336
Occupancy 2,778 2,524 922 858
Marketing and public
relations 438 367 145 100
Office supplies, printing
and postage 467 453 153 139
Processing fees 724 746 225 253
Legal 165 186 51 60
Other 1,325 1,155 481 386
_____ _____ ___ ___
Total non-interest expenses 13,056 12,280 4,416 4,132
______ ______ _____ _____
Income before income taxes 4,730 4,035 1,814 1,575
Income tax expense 1,528 1,149 589 460
_____ _____ ___ ___
Net income $ 3,202 $ 2,886 $1,225 $ 1,115
===== ===== ===== =====
Weighted average
shares outstanding -
primary 3,734,593 3,570,014 3,751,830 3,570,563
========= ========= ========= =========
Net income per common
share - primary $ .86 $ .81 $ .33 $ .31
=== === === ===
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
FNB ROCHESTER CORP. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows (unaudited)
(In thousands)
<TABLE>
<CAPTION>
Nine months ended
September 30,
1997 1996
____ ____
<S> <C> <C>
Cash flows from operating activities:
Net income $3,202 $2,886
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,188 1,060
Amortization of goodwill - 79
Increase in mortgage loans held-for-sale (1,664) (1,234)
Increase in accrued interest receivable (813) (21)
Increase in other assets (57) (208)
Increase (decrease) in accrued interest
payable and other liabilities 1,032 (42)
_____ ____
Net cash provided by operating activities 2,888 2,520
_____ ____
Cash flows from investing activities:
Securities available-for-sale:
Purchase of securities (57,224) (13,493)
Proceeds from maturities 11,497 15,485
Proceeds from sales - 4,021
Securities held-to-maturity:
Purchase of securities (1,246) (2,816)
Proceeds from maturities 3,661 4,007
Loan origination and principal collection,
net (23,688) (44,973)
Capital expenditures, net (475) (2,933)
Increase in other assets - investing (139) (217)
___ ___
Net cash used by investing activities (67,614) (40,919)
Cash flows from financing activities:
Net increase in demand, savings and money
market accounts 13,096 10,764
Certificates of deposit accepted and
repaid, net 42,052 28,734
Increase in short-term borrowing and
securities sold under agreement to
repurchase 9,894 (1,986)
Increase in long-term debt - 210
Payment of common stock dividend (429) -
Employee common stock purchase and exercise
of option to purchase common stock 186 10
___ __
Net cash provided by financing
activities 64,799 37,732
______ ______
Increase (decrease) in cash and cash
equivalents 73 (667)
Cash and cash equivalents at beginning of
year 21,681 23,923
______ ______
Cash and cash equivalents at end of
period $21,754 $23,256
====== ======
The Company paid cash during the nine months ended September 30,
1997 and 1996 as follows:
$11,783 $9,778
Interest
Taxes 1,857 860
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
FNB ROCHESTER CORP. AND SUBSIDIARY
Notes to Condensed Consolidated Financial Statements (unaudited)
(1) Summary of Significant Accounting Policies
Basis of Presentation
FNB Rochester Corp. (the Company) operates as a bank holding
company. Its only subsidiary is First National Bank of
Rochester (the Bank). The consolidated financial statements
include the accounts of the Company and its wholly owned
subsidiary, the Bank. All material intercompany accounts
and transactions have been eliminated in the consolidation.
The financial information is prepared in conformity with
generally accepted accounting principles and such principles
are applied on a basis consistent with those reflected in
the December 31, 1996 Form 10-K Report of the Company filed
with the Securities and Exchange Commission. The financial
information included herein has been prepared by management
without audit by independent certified public accountants.
The information furnished includes all adjustments and
accruals, solely of a normal recurring nature, that are in
the opinion of management necessary for a fair presentation
of results for the interim period ended September 30, 1997.
Amounts in prior periods' financial statements are
reclassified whenever necessary to conform with current
presentation.
(2) Allowance for Loan Losses
Changes in the allowance for loan losses for the nine months
ended September 30, 1997 and 1996 are as follows:
1997 1996
______ _____
Balance at beginning of $5,696 $5,776
period
Provisions (recovery) for - -
loan losses
Loans charged off (376) (142)
Recoveries on loans 206 326
previously charged-off
Balance at end of period $5,526 $5,960
===== =====
The principal balance of loans not accruing interest totaled
$2,332,000 and $1,634,000 at September 30, 1997 and 1996
respectively and $1,419,000 at December 31, 1996.
At September 30, 1997 and 1996, the recorded investment in
loans that are considered to be impaired totaled $3,675,000
and $3,035,000, respectively. The average recorded
investments in impaired loans during the nine months ended
September 30, 1997 and 1996 was approximately $2,593,000 and
$243,000, respectively. For the nine months ended September
30, 1997, the Company recognized $171,000 in interest income
on the impaired loans during the period in which they were
considered impaired. No interest income was recognized on
impaired loans in the nine-month period ended September 30,
1996.
(3) Income per Common Share
Per share data is based upon the weighted average number of
common shares and equivalents (stock options) outstanding
during the period. Fully diluted per share data is not
applicable. The weighted average number of shares and
equivalents outstanding during the period ended September
30, 1997 and 1996 amounted to 3,734,593 and 3,570,014
respectively for the nine-month period and 3,751,830 and
3,570,563 for the three-month period.
In February 1997, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards
No. 128, Earnings Per Share (Statement 128). Statement 128
supersedes APB Opinion No. 15, Earnings Per Share (APB 15)
and specifies the computation, presentation, and disclosure
requirements for earnings per share (EPS) for entities with
publicly held common stock or potential common stock.
Statement 128 was issued to simplify the computation of EPS
and to make the U.S. standard more compatible with the EPS
standards of other countries and that of the International
Accounting Standards Committee. It replaces the
presentation of primary EPS with a presentation of basic EPS
and fully diluted EPS with diluted EPS. It also requires the
dual presentation of basic and diluted EPS on the face of
the income statement for all entities with complex capital
structures and requires a reconciliation of the numerator
and denominator of the basic EPS computation to the
numerator and denominator of the diluted EPS computation.
Basic EPS, unlike primary EPS, excludes dilution and is
computed by dividing income available to common stockholders
by the weighted-average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock
or resulted in the issuance of common stock that then shared
in the earnings of the entity. Diluted EPS is computed
similarly to fully diluted EPS under APB 15.
Statement 128 is effective for financial statements for both
interim and annual periods ending after December 15, 1997.
Earlier application is not permitted. After adoption, all
prior-period EPS data presented shall be restated to conform
with Statement 128. Management has determined that the
adoption of this Statement will not have a material impact
on the Company's stated earnings per share.
(4) Stock Option Plans
The Company has incentive stock option plans under which
options to acquire 325,000 shares of its common stock were
available to grant to key employees and options to acquire
25,000 shares of its common stock were available to grant
to directors. At September 30, 1997, options to purchase
323,600 shares were held by grantees under the plan. The
range of exercise prices of the options is $5.63 to $16.13
per share with an average exercise price of $7.50 per share.
At September 30, 1997, options to acquire 258,600 shares
were exercisable. The remaining options become exercisable
at various times through September 1999. As of September
30, 1997 options to acquire 4,350 shares have been
exercised.
On January 1, 1996, the Company adopted SFAS No. 123,
Accounting for Stock-Based Compensation. As disclosed in the
Company's Form 10-K for the period ended December 31, 1996,
the adoption of SFAS No. 123 did not have a material impact.
The Company declared a $.07 per share dividend on common
stock on June 24, 1997 payable July 31, 1997 to shareholders
of record July 15, 1997. The dividend increased $.02 per
share as compared to the $.05 per share dividend on common
stock declared in December 1996 and payable January 31,
1997. Dividends are expected to be declared semiannually.
The January 1997 dividend was the first dividend the
Company had declared since 1991.
(6) New Accounting Pronouncements
In February 1997 the Financial Accounting Standards Board
(FASB) issued Statement No. 129 entitled Disclosure of
Information About Capital Structure. The Statement applies
to all entities, public and nonpublic, that have issued
securities addressed by this Statement. This Statement is
effective for financial statements for the periods ending
after December 15, 1997. This Statement has no impact on
the Company since it contains no change in disclosure
requirements for entities that were previously subject to
the requirements of Opinions 10 and 15 and Statement No. 47.
In June 1997 FASB issued Statement No. 130 entitled
Reporting Comprehensive Income. Comprehensive Income is
defined as "the change in equity (net assets) of a business
enterprise during a period from transactions and other
events and circumstances from nonowner sources. It includes
all changes in equity during a period except those resulting
from investments by owners and distributions to owners".
The Statement is effective for fiscal years beginning after
December 15, 1997 and requires that items that meet the
definition of components of comprehensive income be reported
in a financial statement that is displayed as prominently as
other financial statements. While this Statement will
increase the Company's financial disclosures it will have no
impact on operating results.
FASB Statement No. 131 entitled Disclosures about Segments
of an Enterprise and Related Information was also issued in
June 1997. This Statement establishes standards for the way
that public business enterprises report information about
operating segments in annual financial statements and
requires that those enterprises report selected information
about operating segments in interim financial reports issued
to shareholders. It also establishes standards for related
disclosures about products, services geographic areas, and
major customers. This Statement may increase the Company's
financial disclosures but will have no impact on operating
results.
<PAGE>
FNB ROCHESTER CORP. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial
position and operating results during the periods included in the
accompanying condensed consolidated financial statements.
Management's discussion and analysis supplements management's
discussion and analysis for the year ended December 31, 1996
contained in the Company's Form 10-K for the period then ended
and includes certain known trends, events and uncertainties that
are reasonably expected to have a material effect on the
Company's Financial position or operating results.
OVERVIEW
Total assets increased $70 million, or 15.9% in the first nine
months of 1997. Loans increased $25.2 million, or 8.3% as
compared to December 31, 1996 and deposits increased $55.1
million, or 13.6%. The loan growth has been primarily in
commercial loans and residential mortgages. Because of the
reduced rate of growth in demand for loans as compared to deposit
growth, the Company increased investments in securities
available-for-sale by $46.7 million, or 64.6%, over the amount at
year end. Deposits increased to $460 million as compared to
$405 million at December 31, 1996. $38.5 million of the increase
was in certificates of deposit of $100,000 or more and of that
total $30 million was in public fund certificates. $14 million of
the public fund increase was the result of an increase in one
municipal relationship. Other deposit increases from December 31,
1996 were $10.4 million for demand, $1.5 million for interest
checking, $1.2 million for Savings and Money Market, and $3.5
million for certificates less than $100,000.
Net income for the nine- month and three-month periods ended
September 30, 1997 increased $316,000, or 10.9%, and $110,000, or
9.9%, respectively, as compared to the same periods in 1996.
Income per share increased to $.86, up $.05 in comparison to $.81
for the nine months ended September 30, 1996 and increased $.02
per share to $.33 for the three-month period. The increases in
both periods were primarily due to increased net interest income.
Net interest income increased $1,351,000, or 9.7% for the nine-
month period and $544,000, or 11.2% for the three-month period as
compared to the same periods in 1996. For the nine-month period
ended September 30, 1997, non-interest income increased $120,000,
or 5.1%, and non-interest expense increased $776,000, or 6.3%. As
in the first half of 1997, non-interest expense showed increases
in salaries and employee benefits and occupancy.
NET INTEREST INCOME
Commercial mortgage and residential mortgage lending have
provided much of the Company's loan growth. The increases in net
interest income in the nine-month and three-month periods ended
September 30, 1997 as compared to the same periods in 1996 are
primarily the result of that increased lending activity and
increased securities available-for-sale, with offsetting interest
expense from increased certificate of deposit volumes. Net
interest margin has remained fairly stable in 1997. The margin
was 4.54%, 4.51% and 4.56% for the three-month periods ended
September, June, and March 1997, respectively. The margin may be
expected to decline if deposits continue to grow primarily
through higher interest rate certificates of deposit and if
commercial loan demand remains at current levels so that deposit
growth is used primarily to fund residential mortgages and
securities-available-for-sale. Residential mortgages typically
have a lower interest rate than other types of loans and the
Company's securities investments typically carry interest rates
lower than loans. Increased loan volume resulted in interest and
fees on loans increasing $2,144,000, or 11.4%, for the nine-
month period ended September 30, 1997 as compared to the same
period in 1996. Interest and fee income increased $2,439,000
because of increased volumes and declined $295,000 due to lower
rates.
Average commercial loans increased $15.7 million, or 8.9%, from
the period ended September 30, 1996 to the period ended
September 30, 1997. The increased volume contributed $1,106,000
to income, which was partially offset by rate declines that
reduced income by $167,000. Average mortgage loans increased $18
million, or 30.4%. The increase in the mortgage portfolio was
primarily made up of 15 year fixed rate mortgages. The increase
in mortgage interest income of $1,008,000 was the result of the
increased volume. Average home equity loans and consumer loans
increased $3 million with an increase in income of $197,000.
Average securities increased $25 million and income from those
investments increased $1,406,000, or 28.5%. Because of the
additional deposits generated by our new banking offices, the
rate of loan growth has not kept pace with the deposit growth.
To maximize the earnings on those deposits, management has
purchased securities available-for-sale. To lessen both interest
rate risk and market risk, $21 million of the securities
purchased in the nine-month period have been variable rate. While
the variable rate securities typically carry a lower rate than
the fixed rate they have less market risk should the Company need
to liquidate them to fund loan growth or deposit outflows.
Interest expense increased $2,374,000, or 24%, for the nine-month
period ended September 30, 1997 as compared to the period ended
September 30, 1996. The net average balance total of savings,
interest checking, and money market categories have shown a
modest increase of $1,019,000, or .7% and the interest expense
associated with those deposits is relatively unchanged. Average
balances for certificates of deposit increased $49.8 million for
the nine-month period and the Bank's deposit growth in
certificates of deposit resulted in $2,087,000 additional
interest expense due to increased balances and $160,000 because
of increased rates.
PROVISION FOR LOAN LOSSES
The Bank provides for loan losses by a charge to current
operations. The provision is based upon discretionary adjustments
which, in the opinion of management, are necessary to bring the
allowance to an appropriate level considering the character of
the loan portfolio, current economic conditions, analyses of
specific loans, and historical loss experience.
The Bank had net charge-offs of $170,000 for the nine-month
period ended September 30, 1997 as compared to net recoveries of
$184,000 for the same period in 1996. Net charge-offs
(recoveries) (annualized) as a percent of average loans were .07%
and (.09)% for the nine months ended September 30, 1997 and 1996.
The ratios of the allowance for possible loan losses as a percent
of period end loans for the comparable periods were 1.68% and
1.98%, respectively. Non performing assets increased $927,000, or
38.2% to $3,354,000 at September 30, 1997 from $2,427,000 at
September 30, 1996. Management undertakes a quarterly analysis to
assess the adequacy of the allowance for possible loan losses
taking into account non-performing and delinquent loans,
internally criticized loans, historical trends, economic factors,
and overall credit administration. Based on this analysis, the
allowance is considered adequate at September 30, 1997 to absorb
anticipated losses. Management believes that the inherent risk
in the current portfolio has already been provided for, and
because of credit standards that the Bank has implemented, new
loans are expected to be of high quality. Based on anticipated
portfolio growth and possible adjustments to charge-off
projections, the need to resume a monthly provision is
continuously evaluated. At this time, it is expected that a
monthly provision will be resumed within the next three to six
months.
NON-INTEREST INCOME AND NON-INTEREST EXPENSE
Non-interest income of $2,490,000 for the first nine months of
1997 represents an increase of $120,000, or 5.1%, from $2,370,000
for the comparable period in 1996. The increase was primarily the
result of increases in service charges on deposit accounts.
Non-interest expense was $13,056,000 for the first nine months of
1997 as compared to $12,280,000 for the comparable period in
1996, an increase of $776,000, or 6.3%. The largest components of
non-interest expense for the nine-month and three-month period
ended September 30, 1997 were salaries and employee benefits and
occupancy. Salaries and employee benefits increased $310,000, or
4.5%, from $6,849,000 for the nine-month period in 1996 and
occupancy which increased $254,000, or 10.1%. Both increases
were caused primarily by expenses associated with new banking
offices as well as normal salary increases and promotions. While
operating expenses have continued to increase, the Company's
operating expense as a percent of average assets is declining.
The ratio has declined, from 5.18%, 4.28% and 4.02% for the
years ended December 31, 1994, 1995 and 1996 respectively, to
3.67% for nine-month period ended September 30, 1997.
PROVISION FOR INCOME TAXES
The provision for income tax was $1,528,000 for the period ended
September 30, 1997 as compared to $1,149,000 at September 30,
1996. The Company's effective tax rates for the periods were 32%
and 28% for 1997 and 1996 respectively. During both the periods
ended September 30, 1997 and 1996 the Company reduced its
effective tax rate by recognizing deductible temporary
differences for which a valuation allowance had previously been
established.
Income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and
liabilities and their respective tax basis and operating loss and
tax credit carry forwards. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income for the period that includes the enactment date.
The realization of deductible temporary differences depends on
the Company having sufficient taxable income within the carry
back period permitted by the tax law to allow for utilization of
deductible amounts. A valuation allowance has been established
for the portion of the Company's net deductible temporary
differences which are not expected to be realized.
CAPITAL ADEQUACY
Total shareholders' equity was $32,947,000 at September 30, 1997,
which represents an increase of $3,716,000, or 12.7% from
$29,231,000 at December 31, 1996. Shareholders' equity increased
primarily as a result of $3,202,000 in retained earnings offset
by dividends of $251,000 and an increase of $578,000 in the
unrealized net holding gain on securities available-for-sale, net
of taxes.
At September 30, 1997, the Company and its banking subsidiary
exceeded the minimum guidelines for Tier 1 and Total Risk-Based
Capital of 4% and 8%, respectively. The Company's ratios were
10.15% and 11.41% respectively, at September 30, 1997. Banking
organizations must also maintain a minimum Tier 1 Leverage Ratio
of 3% of assets, while banking organizations that are not top-
rated according to regulators' "Camels" ratings, must meet
leverage ratios of at least 100 basis points above the 3%
standard. The Company's Tier 1 Leverage Ratio at September 30,
1997 was 6.43%. At 5% the Company would be considered to be well
capitalized.
LIQUIDITY
Liquidity measures the ability to meet maturing obligations and
existing commitments, to withstand fluctuations in deposit
levels, to fund operations, and to provide for customers' credit
needs. Management carefully monitors its liquidity position and
seeks to maintain adequate liquidity to meet its needs. The
fundamental source of liquidity will continue to be deposits.
Available sources of asset liquidity include short-term
investments, loan repayments, and securities held in the
available-for-sale portfolio. Additionally, the Bank has the
ability to pledge securities to secure short-term borrowing. The
Bank is a member of the Federal Home Loan Bank which provides an
additional source of funding.
The vast majority of the assets of the Company are held by the
Bank. Dividends and cash advances to the Company from the Bank
are subject to standard bank regulatory constraints. An analysis
of projected expenses and cash flows indicates that the Company
has sufficient cash to meet its anticipated cash obligations
through 1997.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit Incorporation by
Reference or page in
sequential numbering
where exhibit may be
found:
(3.1) Certificate of Exhibits 4.2-4.5 to
Incorporation as Registration Statement
amended, of the Registrant No. 33-7244, filed July
22, 1986
(3.2) Amendment to Exhibit 3 to Form 10-Q
Certificate of for period ended
Incorporation of Registrant June 30, 1992
dated August 6, 1992
(3.3) By-laws of the Exhibit 3.3 to Annual
Registrant, as Report on Form 10-K
amended for the year ended
December 31, 1992
(27) Financial Data Page 19
Schedule
(b) Reports on Form 8-K:
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
FNB ROCHESTER CORP.
Date November 5, 1997 s\s Stacy C. Campbell
_____________________
Stacy C. Campbell
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer
and Duly Authorized Officer)
<PAGE>
INDEX OF EXHIBITS
Exhibit Incorporation by
Reference or page in
sequential numbering
where exhibit may be
found:
(3.1) Certificate of Exhibits 4.2-4.5 to
Incorporation as amended, of Registration Statement
the Registrant. No. 33-7244, filed July
22, 1986
(3.2) Amendment to Exhibit 3 to Form 10-Q
Certificate of Incorporation for period ended June 30,
of Registrant dated August 1992
6, 1992
(3.3) By-laws of the Exhibit 3.3 to Annual
Registrant, as amended. Report on Form 10-K for
the year ended December
31, 1992
(27) Financial Data Schedule Page 19
<PAGE>
Financial Data Schedules were filed electronically with the
Securities and Exchange Commission.
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 20,044
<INT-BEARING-DEPOSITS> 1,110
<FED-FUNDS-SOLD> 1,600
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 119,011
<INVESTMENTS-CARRYING> 27,116
<INVESTMENTS-MARKET> 27,128
<LOANS> 328,832
<ALLOWANCE> 5,526
<TOTAL-ASSETS> 507,509
<DEPOSITS> 459,919
<SHORT-TERM> 10,680
<LIABILITIES-OTHER> 3,753
<LONG-TERM> 210
0
0
<COMMON> 3,585
<OTHER-SE> 29,362
<TOTAL-LIABILITIES-AND-EQUITY> 507,509
<INTEREST-LOAN> 20,878
<INTEREST-INVEST> 6,332
<INTEREST-OTHER> 355
<INTEREST-TOTAL> 27,565
<INTEREST-DEPOSIT> 12,095
<INTEREST-EXPENSE> 12,269
<INTEREST-INCOME-NET> 15,296
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 13,056
<INCOME-PRETAX> 4,730
<INCOME-PRE-EXTRAORDINARY> 3,202
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,202
<EPS-PRIMARY> 0.86
<EPS-DILUTED> 0.86
<YIELD-ACTUAL> 4.54
<LOANS-NON> 2,332
<LOANS-PAST> 1,017
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 5,696
<CHARGE-OFFS> 376
<RECOVERIES> 206
<ALLOWANCE-CLOSE> 5,526
<ALLOWANCE-DOMESTIC> 5,526
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
