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Previous: COLUMBIA LEASE INCOME FUND A LP, 10-Q, 1996-05-14 |
Next: MILTOPE GROUP INC, 10-Q, 1996-05-14 |
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1996 Commission File Number 0-14550
NEW ENGLAND COMMUNITY BANCORP, INC.
DELAWARE 06-1116165
OLD WINDSOR MALL
P.O. BOX 130
WINDSOR, CONNECTICUT, 06095
Telephone: (860) 688-5251
Indicate by check mark whether 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 twelve months, and (2) has been subject to such filing
requirements for the past 90 days. YES ___X___ NO_______
The number of shares of common stock of the registrant outstanding as of May 13,
1996 was 3,084,309
The total number of pages in this report is 15
<PAGE>
NEW ENGLAND COMMUNITY BANCORP, INC.
TABLE OF CONTENTS
Part I. FINANCIAL INFORMATION Page No.
Item 1. Financial Statements:
Consolidated Balance Sheets - March 31, 1996 and 1995
and December 31, 1995 (unaudited)
Consolidated Statements of Income - three months ended
March 31, 1996 and 1995 (unaudited)
Consolidated Statements of Cash Flows - three months
ended March 31, 1996 and 1995 (unaudited)
Notes to Consolidated Condensed Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Default Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits, Financial Statement Schedules and Reports
on Form 8-K
Signatures
1
<PAGE>
NEW ENGLAND COMMUNITY BANCORP, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
<TABLE>
March 31, March 31, December 31,
(thousands of dollars) 1996 1995 1995
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C>
Cash and due from banks $ 15,738 $ 12,819 $ 14,495
Interest-bearing demand deposits
with other banks 55
Federal funds sold 8,300 5,325 9,075
-------- -------- --------
Cash and cash equivalents 24,038 18,144 23,625
Interest-bearing time deposits with
other banks 3,000
Investment securities:
Securities held-to-maturity 6,595 9,579 7,066
Securities available-for-sale 67,839 37,948 75,063
FHLBB Stock 1,176 810 1,176
Loans Outstanding 219,236 136,726 222,235
Less: allowance for loan losses (4,520) (2,374) (4,446)
-------- -------- --------
Net loans 214,716 134,352 217,789
Mortgages held-for-sale 2,046 63 788
Accrued interest receivable 2,444 1,389 2,538
Premises and equipment 7,290 5,769 6,960
Other real estate owned 720 373 728
Other assets 2,141 1,384 2,828
-------- -------- --------
TOTAL ASSETS $329,005 $209,811 $341,561
======== ======== ========
LIABILITIES
Deposits
Noninterest bearing $ 52,110 $ 37,982 $ 59,945
Interest bearing 241,737 151,694 247,216
-------- -------- --------
Total deposits 293,847 189,676 307,161
Short-term borrowings 1,151 257 540
Other liabilities 3,098 812 3,380
-------- -------- --------
TOTAL LIABILITIES 298,096 190,745 311,081
-------- -------- --------
SHAREHOLDERS' EQUITY:
Common stock, $.10 par value, March 31, 1995 authorized 3,000,000 shares,
outstanding 2,080,692; December 31, 1995 and March 31, 1996 authorized
10,000,000 shares, outstanding 3,084,309 308 208 308
Surplus 21,522 12,115 21,522
Retained earnings 9,230 7,328 8,492
Net unrealized (loss) gain on
securities available-for-sale (151) (585) 158
-------- -------- --------
TOTAL SHAREHOLDERS' EQUITY 30,909 19,066 30,480
-------- -------- --------
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY $329,005 $209,811 $341,561
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
NEW ENGLAND COMMUNITY BANCORP, INC.
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
<TABLE>
(thousands of dollars; except per share data)
Quarter ended March 31, 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Interest and dividend income:
<S> <C> <C>
Loans, including fees $5,419 $2,889
Investment securities:
Taxable interest 942 643
Interest exempt from federal income taxes 24 12
Dividends 170 30
Federal funds sold 86 111
------ ------
Total interest and dividend income 6,641 3,685
Interest expense:
Deposits 2,395 1,137
Borrowed funds 10 8
------ ------
Total interest expense 2,405 1,145
Net interest and dividend income 4,236 2,540
Provision for possible loan losses 532 130
------ ------
Net interest and dividend income after provision
for possible loan losses 3,704 2,410
------ ------
Noninterest income:
Service charges, fees and commissions 411 327
Investment securities losses (1) (3)
Gain on the sales of loans 20 6
Other 10 16
------
Total noninterest income 440 346
Noninterest expense:
Salaries and employee benefits 1,558 1,023
Occupancy 257 160
Furniture and equipment 187 163
Outside services 117 76
Postage and supplies 122 97
Insurance and assessments 36 148
Losses, writedowns, expenses - other real estate owned 47 63
Other 463 345
------ ------
Total noninterest expense 2,787 2,075
------ ------
Income before taxes 1,357 681
Income taxes 434 242
------ ------
NET INCOME $ 923 $ 439
====== ======
Net income per share $ 0.30 $ 0.21
Weighted average shares outstanding of common stock 3,084 2,081
------ ------
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
NEW ENGLAND COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
(thousands of dollars)
Three months ended March 31, 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Operating activities:
<S> <C> <C>
Net income 923 439
Adjustment for noncash charges (credits):
Provision for depreciation and amortization 67 109
Losses from sale or disposal and provisions to reduce
the carrying value of other real estate owned, net 10 47
Investment securities (losses) gains, net (1) 3
Accretion of discounts and amortization of
premiums on bonds, net 62 177
Provision for possible loan losses 532 130
Loss on sale of loans, net (6)
Decrease in accrued interest income
and other assets, net 421 991
Increase in loans held-for-sale (1,258) 0
(Decrease) Increase in accrued interest and
other liabilities, net (320) 267
------- -------
Net cash provided by operating activities 436 2,157
------- -------
Financing activities:
Net decrease in noninterest-bearing
accounts (7,835) (9,342)
Net (decrease) increase in interest-bearing
accounts (5,479) 2,145
Increase (decrease) in short-term borrowings, net 611 (543)
Cash dividends paid (170) (104)
------- -------
Net cash used for financing activities (12,873) (7,844)
------- -------
Investing activities:
Loans originated, net of principal collections 1,963 (5,012)
Proceeds from sales of loans 258 362
Decrease in interest-bearing time deposits 3,000
Purchases of securities available-for-sale (9,586) (4,644)
Proceeds from sales of securities
available-for-sale 6,008 1,524
Proceeds from maturities of securities
available-for-sale 10,947 1,500
Purchases of securities held-to-maturity (527) (287)
Proceeds from maturities of securities
held-to-maturity 925 2,450
Proceeds from sales of other real estate owned 259 324
Purchases of premises and equipment, net (397) (201)
------- -------
Net cash provided by (used for) investing activities 12,850 (3,984)
------- -------
Increase (decrease) in cash and cash equivalents 413 (9,671)
Cash and cash equivalents, beginning of period 23,625 27,815
------- -------
Cash and cash equivalents, end of period 24,038 18,144
======= =======
Schedule of noncash investing and financing activities:
Loans charged off, net of recoveries 511 320
Real estate acquired through foreclosure 267 159
Income tax paid 143
Income tax refund 300
Interest paid 2,511 1,156
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
NEW ENGLAND COMMUNITY BANCORP, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying condensed interim financial statements are unaudited and
include the accounts of New England Community Bancorp, Inc. (the "Company" or
"NECB") and its subsidiaries, New England Bank and Trust Company ("NEBT") and
The Equity Bank ("EQBK"). These financial statements reflect, in the opinion of
Management, all adjustments, consisting of only normal recurring adjustments,
necessary for a fair presentation of the Company's financial position and the
results of its operations and its cash flows for the periods presented. These
financial statements should be read in conjunction with the financial statements
and notes thereto included in the Company's 1995 Annual Report on Form 10-K.
NOTE 2 - PURCHASE ACCOUNTING
On November 30, 1995, the Company consummated a reorganization with EQBK by
issuing 1,003,617 shares of the Company's Common Stock in exchange for all of
the outstanding common shares (less 69,486 shares not exchanged by dissenting
shareholders) of EQBK. The merger was accounted for as a purchase, and thus, the
results of operations for EQBK are only included since the date of the
reorganization.
5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
FINANCIAL CONDITION
Total assets at March 31, 1996 were $329,005,000, a decrease of $12,556,000, or
3.7%, from $341,561,000 at December 31, 1995. Total deposits, which amounted to
$293,847,000 at March 31, 1996 and which constitute the primary funding source
of the Company's assets, decreased $13,314,000 or 4.3% from December 31, 1995 to
March 31, 1996, while accrued interest payable and other liabilities increased
$282,000. Federal funds sold decreased by $775,000 to $8,300,000 at March 31,
1996. Federal funds, overnight loans to other banks, represent excess reserves
which are the Company's most liquid assets and as such are available to meet
short term cash flow needs. During the first three months of 1996, loans
outstanding decreased $2,999,000 or 1.3% to $219,236,000. The decrease was
primarily the result of a moderation in loan demand coupled with commercial
borrowers paying down or paying off construction and other commercial loans.
Investment securities decreased 9.2% to $75,610,000 due to both maturities and
sales which, in part, were off-set by seasonal decreases in deposit balances.
Securities held-to-maturity decreased from $7,066,000 at December 31, 1995 to
$6,595,000 at March 31, 1996. This represents a decrease of $471,000 or 6.7%.
Securities available-for-sale decreased $7,224,000 or 9.6% from $75,063,000 to
$67,839,000 during the same period. Total equity capital was $30,909,000 at
March 31, 1996, an increase of $429,000 or 1.4%. The change included a $309,000
increase in net unrealized losses (net of related tax effect) on securities
available-for-sale and a $738,000 increase in retained earnings.
Securities held-to-maturity
Securities held-to-maturity are shown in the Company's balance sheets on an
amortized cost basis. Amortized cost is the original cost adjusted for the
effect of accumulated amortization of premiums and accretion of discounts.
<TABLE>
MARCH 31, 1996 DECEMBER 31, 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Amortized Amortized
Cost Fair Cost Fair
(in thousands) Basis Value Basis Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt securities issued by...
...the U.S. Treasury and
other U.S. government
agencies $4,503 $4,495 $5,501 $5,506
...states of the United
States and political
subdivisions of the
states 2,092 2,118 1,565 1,629
------ ------ ------ ------
$6,595 $6,613 $7,066 $7,135
====== ====== ====== ======
</TABLE>
Securities available-for-sale
Securities available-for-sale are shown in the Company's balance sheets at fair
value. The unrealized gain or loss resulting from such valuation, reduced by the
effect of income taxes, is reflected as a separately disclosed component of
shareholders' equity. At March 31, 1996, the net unrealized loss on securities
available-for-sale was $258,000 while at December 31, 1995 the net unrealized
gain was $270,000, representing an increase in net unrealized losses of
$528,000.
6
<PAGE>
<TABLE>
March 31, 1996 December 31, 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Amortized Amortized
Cost Fair Cost Fair
(in thousands) Basis Value Basis Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Marketable equity securities $12,832 $12,614 $15,115 $15,201
Debt securities issued by...
...the U.S. Treasury and other
U.S. government agencies 33,447 33,423 38,483 38,555
...states of the United States
and political subdivisions
of the states 251 251
Corporate debt securities 10,092 10,041 9,688 9,668
Mortgage-backed securities 11,726 11,761 11,256 11,388
------- ------- ------- --------
$68,097 $67,839 $74,793 $75,063
======= ======= ======= =======
</TABLE>
Nonperforming Assets
The following table sets forth information pertaining to the Company's
nonperforming assets and the level of the allowance for possible loan losses
relative to those assets.
<TABLE>
(in thousands) March 31, 1996 December 31, 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Nonaccrual loans $4,444 $4,725
Other real estate owned 720 728
------ ------
Total nonperforming assets $5,164 $5,453
------ ------
Loans past due in excess of ninety days
and accruing interest $ 273 $ 273
Ratio of nonperforming assets to total
loans and OREO 2.4% 2.5%
Ratio of nonperforming assets and loans
past due in excess of ninety days and
accruing interest to total loans
and OREO 2.5% 2.6%
Ratio of allowance for loan losses to
total loans 2.1% 2.0%
Ratio of allowance for loan losses to
nonperforming assets and loans in excess
of ninety days past due and accruing
interest 83.2% 77.6%
Ratio of nonperforming assets and loans
in excess of ninety days past due and
accruing interest to total
shareholders' equity 17.6% 18.8%
</TABLE>
Total nonperforming assets decreased $289,000 to $5,164,000 at March 31, 1996
from $5,453,000 at December 31, 1995. During this period nonperforming assets
were increased by $1,181,000 loans newly classified as nonaccruing, and
decreased by $259,000 from sales of foreclosed properties, $527,000 from loans
charged off and written-down, $416,000 loans returned to performing status and
$308,000 in repayments. Nonperforming loans may be returned to performing status
when they have regained compliance with their original terms and the borrower
demonstrates an ongoing ability to continue performing as agreed.
The Company's total allowance for possible loan losses was $4,520,000 at March
31, 1996, as compared to $4,446,000 at December 31, 1995. Activity in the
allowance for possible loan losses for the three months was as follows:
<TABLE>
(in thousands)
Three months ended march 31, 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Balance beginning of period $4,446 $2,565
Provisions charged to operations 532 130
Recoveries on loans previously charged-off 53 47
Loans charged-off (511) (368)
------ ------
Balance end of period $4,520 $2,374
====== ======
</TABLE>
Provisions for possible loan losses charged to operations for the first three
months of 1996 were $532,000, representing an increase of $402,000 from the same
period of 1995. EQBK's provision of $205,000 represents approximately one half
of this increase as it is included for the first time. The increase in the
provision also relates to anticipated loan growth, much of which may be
associated with expansion of NECB's market area. Management's assessment of the
adequacy of the allowance is based upon the composition of the loan portfolio,
past due experience, current economic conditions and other factors deemed
appropriate. Management analyzes the subsidiaries loan portfolios as part of its
risk management process to ascertain the potential for loss from possible
nonpayment by some of the Banks' borrowers as well as the risk of loss inherent
in the portfolio. Reserves are assigned to specific loans and classes of loans,
and then aggregated to determine the total level needed. The adequacy of the
allowance is also evaluated in light of prevailing economic conditions and other
factors.
CAPITAL
Under currently applicable Federal Reserve Board regulations, the Company must
maintain a minimum risk based capital ratio of 8.0% of which 4.0% must be Tier 1
capital and a minimum leverage capital ratio of between 4.0% and 5.0%. In
addition, under FDIC regulations, the Company's subsidiaries must meet these
same minimum risk-based and leverage capital ratios. These requirements are
minimum ratios and banks may be required to maintain higher ratios.
Total shareholders' equity of the Company at March 31, 1996 was $30,909,000
compared to $30,480,000 at December 31, 1995. The Company's Tier 1 leverage
capital ratio was 9.37% at March 31, 1996. The capital ratios of the Company and
each of its subsidiaries were in compliance with all applicable regulatory
requirements.
Along with the regulatory minimums, the table below summarizes the Company's
leverage and risk-based ratios as well as those of its subsidiaries at March 31,
1996:
<TABLE>
Minimum Level EQBK NEBT NECB
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Leverage 4% 8.72% 7.56% 9.37%
Tier 1 Risk-Based 4% 9.40% 11.02% 12.18%
Total Risk-Based 8% 10.65% 12.27% 13.43%
The FDIC Improvement Act (FDICIA) categorizes banks according to their capital
levels into one of five categories ranging from "well capitalized" to
"critically undercapitalized." Each category serves to determine a bank's
deposit insurance premium as well as any mandated restrictive regulatory
actions. As of March 31, 1996, NECB's subsidiary banks were categorized as "well
capitalized," which specifies for minimum Leverage, Tier 1, and Total Capital,
ratios of 5%, 6% and 10%, respectively.
</TABLE>
7
<PAGE>
LIQUIDITY
It is management's objective to ensure the continuous ability to meet cash needs
as they arise. Such needs may occur from time to time as a result of seasonal
declines in deposit levels, response to changes in interest rates paid on
deposits and interest rates charged for loans and fluctuations in the demand for
the Banks' various loan products. Accordingly, the Company maintains liquidity
that provides the flexibility to meet its cash needs. The liquidity objective is
achieved through the maintenance of readily marketable assets as well as a
balanced flow of asset maturities and prudent pricing on loan and deposit
agreements. Management has alternative sources of liquidity including repurchase
agreements, which provide the Company with flexibility in managing its liquidity
position. The maturities of investment securities and cash flows from the
repayments of outstanding loans are expected to provide the Company with
adequate liquidity over the coming months.
RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 1996
Net income for the three months ended March 31, 1996, was $923,000 or $0.30 per
share as compared to $439,000 or $0.21 per share for the same period of 1995. An
important factor in these results was the increase in net interest and dividend
income of $1,696,000 to $4,236,000 for the three months ended March 31, 1996,
from $2,540,000 for the same period one year earlier.
The increase resulted from two factors: 1) the inclusion of EQBK for the first
time, and, to a lesser degree, 2) the net interest margin (net yield on average
earning assets), increased during the first quarter of 1996. The net interest
margin, on a tax-equivalent basis, for the three months ended March 31, 1996 was
5.55% compared to 5.49% for the same period one year ago. The average rate paid
on interest bearing liabilities during the first quarter of 1996 was 3.99% an
increase of 0.80% from 3.19% paid in 1995. At the same time, the average rate
earned on earning assets rose by 0.73% to 8.67% in 1996.
Average Balance Sheets, Net Interest Income and Interest Rates
The table below presents the Company's average balance sheets (computed on a
daily basis), net interest income, and interest rates for the quarters ended
March 31, 1996 and March 31, 1995. Average loans outstanding include nonaccruing
loans. Interest income is presented on a tax-equivalent basis which reflects a
federal tax rate of 34% for all periods presented.
8
<PAGE>
<TABLE>
Quarter ended, MARCH 31, 1996 MARCH 31, 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Average Average Average Average
(in thousands) Balance Interest Rate Balance Interest Rate
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Federal funds sold $ 6,543 $ 86 5.29% $ 8,035 $112 5.65%
Interest-bearing time
deposits 2,407 42 7.02%
Investment securities:
Held-to-maturity 6,890 114 6.65% 11,070 172 6.30%
Available-for-sale 71,578 1,033 5.80% 35,259 531 6.11%
Mortgages held for sale 1,076 19 7.10% 51 1 7.95%
Loans 222,122 5,400 9.78% 134,731 2,888 8.69%
-------- ------ ------- -----
Total interest-earning
assets 310,616 6,694 8.67% 189,146 3,704 7.94%
Allowance for loan
losses (4,541) (2,368)
Cash & due from banks 12,937 9,141
Other assets 12,333 9,749
-------- -------
Total Assets $331,345 $205,668
======== =======
LIABILITIES
Regular savings
deposits $ 69,077 $354 2.06% $ 50,050 $278 2.25%
NOW account deposits 28,051 72 1.03% 20,917 64 1.24%
Money market deposits 4,949 14 1.14% 4,398 13 1.20%
-------- ------- -----
Total savings
deposits 102,077 440 1.73% 75,365 355 1.91%
Time deposits 139,467 1,955 5.64% 69,444 782 4.57%
Borrowed funds 897 10 4.48% 655 8 4.95%
-------- ------ ------- -----
Total interest bearing
liabilities 242,441 2,405 3.99% 145,464 1,145 3.19%
Demand deposits 54,653 40,725
Other liabilities 3,294 716
-------- -------
Total Liabilities 300,388 186,905
-------- -------
Equity 30,957 18,763
Total Liabilities
& Equity $331,345 $205,668
======== =======
Net interest income
(tax equivalent basis) $4,289 $2,559
Less adjustment for
Tax-exempt income (53) (19)
------ ------
Net interest income $4,236 $2,540
====== ======
Net interest spread 4.68% 4.75%
Net interest margin 5.55% 5.49%
</TABLE>
The fully taxable equivalent yield on earning assets was 8.67% for the first
quarter of 1996, increasing from 7.94% for the corresponding period in 1995. The
cost of interest bearing liabilities was 3.99% for the first quarter of 1996 as
compared to 3.19% for the first quarter of 1995. As a result, the net interest
margin, on a fully taxable equivalent basis was 5.55% for the first quarter of
1996 compared to 5.49% for the first quarter of 1995.
9
<PAGE>
RATE VOLUME ANALYSIS
The following table, which is presented on a tax-equivalent basis, reflects the
changes, for the quarter ended March 31, 1996 when compared to the quarter ended
March 31, 1995 in net interest income arising from changes in interest rates and
from asset and liability volume, including mix. The change in interest due to
both rate and volume has been allocated to rate and volume changes in proportion
to the relationship of the absolute dollar amounts of the changes in each.
<TABLE>
Change due to
Change in:
Increase -------------------
(in thousands) (Decrease) Rate Volume
- ------------------------------------------------------------------------------------------------------------------------------------
INTEREST EARNED ON:
<S> <C> <C> <C>
Federal funds sold $ (26) $ (7) $ (19)
Interest-bearing time deposits 42 0 42
Investment securities:
Held-to-maturity (58) 9 (67)
Available-for-sale 502 (28) 530
Mortgages held for sale 18 (0) 18
Loans 2,512 405 2,107
------ ----- ------
Total interest-earning assets $2,990 $ 380 $2,610
INTEREST PAID ON:
Regular savings deposits $ 76 $ (25) $ 101
NOW account deposits 8 (12) 20
Money market deposits 1 (1) 2
Total savings deposits 85 (38) 123
Time deposits 1,173 222 951
Borrowed funds 2 (1) 3
------ ----- ------
Total interest-bearing liabilities 1,260 183 1,077
------ ----- ------
Net interest income change $1,730 $ 197 $1,533
====== ===== ======
</TABLE>
Noninterest Income
Total noninterest income for the first quarter of 1996 was $440,000, an increase
of $94,000 from $346,000 for the same period one year ago. The primary reason
for this increase to noninterest income occurred was the inclusion of EQBK for
the first time.
Noninterest Expense
Noninterest expenses for the first quarter of 1996 were $2,787,000, an increase
of $712,000 from $2,075,000 for the corresponding period in 1995. Proportionate
increases reflecting the inclusion of EQBK for the first time were realized in
salaries and benefits, occupancy, outside services and postage-supplies. Modest
decreases during the period in insurance and assessments and OREO related
expenses were also realized during the period.
10
<PAGE>
Part II OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Default Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5 Other Information - None
Item 6. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Exhibits
Exhibit Number Exhibit
27 Financial Data Schedule
(b) Form 8-K. Current Reports. The following reports were filed with
the Securities and Exchange Commission during the quarter ended March 31, 1996:
(i) On January 5, 1996, NECB filed a Form 8-K/A with the SEC
which included financial information regarding the Reorganization with The
Equity Bank. This information was not readily available at the time of the
filing of the initial Form 8-K on December 14, 1995.
(ii) On January 11, 1996, NECB filed a Form 8-K with the SEC
which disclosed that the Boards of NECB, its subsidiary NEBT and Manchester
State bank ("MSB"), a Connecticut chartered commercial bank with its principal
place of business in Manchester, Connecticut, executed a Plan and Agreement
of Reorganization (the "Agreement").
Pursuant to the Agreement, upon consummation of the transaction, it is
anticipated that the shareholders of MSB will exchange each share of common
stock of MSB for the Reorganization consideration consisting of $35.20 payable
in cash and 5.493 shares of NECB's common stock. The Agreement is subject to
conditions such as receipt of regulatory approval and approval by the
shareholders of MSB. The Parties anticipate consummating the transaction
contemplated by the Agreement in mid-1996.
11
<PAGE>
NEW ENGLAND COMMUNITY BANCORP, INC.
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.
NEW ENGLAND COMMUNITY BANCORP, INC.
Date: May 13, 1996 By: S/S ANSON C. HALL
-----------------
(Anson C. Hall)
Vice President and Treasurer
(principal financial officer)
12
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-END> Mar-31-1996
<EXCHANGE-RATE> 1.000
<CASH> 15,738
<INT-BEARING-DEPOSITS> 241,737
<FED-FUNDS-SOLD> 8,300
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 69,275
<INVESTMENTS-MARKET> 68,205
<LOANS> 219,236
<ALLOWANCE> 4,520
<TOTAL-ASSETS> 329,005
<DEPOSITS> 293,847
<SHORT-TERM> 1,151
<LIABILITIES-OTHER> 3,098
<LONG-TERM> 0
0
0
<COMMON> 308
<OTHER-SE> 30,909
<TOTAL-LIABILITIES-AND-EQUITY> 329,005
<INTEREST-LOAN> 5,419
<INTEREST-INVEST> 1,136
<INTEREST-OTHER> 86
<INTEREST-TOTAL> 6,641
<INTEREST-DEPOSIT> 2,395
<INTEREST-EXPENSE> 2,405
<INTEREST-INCOME-NET> 4,236
<LOAN-LOSSES> 532
<SECURITIES-GAINS> (1)
<EXPENSE-OTHER> 2,787
<INCOME-PRETAX> 1,357
<INCOME-PRE-EXTRAORDINARY> 1,357
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 923
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0.30
<YIELD-ACTUAL> 8.67
<LOANS-NON> 4,444
<LOANS-PAST> 273
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 18,136
<ALLOWANCE-OPEN> 4,446
<CHARGE-OFFS> 511
<RECOVERIES> 53
<ALLOWANCE-CLOSE> 4,520
<ALLOWANCE-DOMESTIC> 4,520
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
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