UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1998
Commission file Number 2-94863
CANANDAIGUA NATIONAL CORPORATION
(Exact name of registrant as specified in its charter.)
NEW YORK 16-1234823
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
72 South Main Street, Canandaigua, New York 14424
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716) 394-4260
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date:
On March 31, 1998 there were 160,495 shares of the registrant's common
stock outstanding.
<PAGE>
PART I FINANCIAL INFORMATION
<TABLE>
CANANDAIGUA NATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
March 31, 1998 and 1997
(Dollars in thousands, except per share amounts)
<CAPTION>
March 31, December 31,
1998 1997
--------- ---------
<S> <C> <C>
ASSETS
Current assets
Cash and due from banks $23,818 $19,647
Securities:
Held to maturity -
U.S. Government 31,806 31,413
State & municipal obligations 34,102 34,273
Other securities 4,599 5,301
------- -------
70,507 70,987
Available-for-sale 394 394
------- -------
Total securities 70,901 71,381
------- -------
Loans:
Commercial, financial & agricultural 39,412 37,610
Residential mortgage 85,105 94,593
Commercial mortgage 76,238 74,228
Consumer-indirect 72,715 71,317
Consumer-other 15,363 15,245
Other loans 5,911 12,138
Loans held for sale 2,050 2,119
------- -------
Total loans 296,794 307,250
Less: Allowance for loan losses (3,168) (3,153)
------- -------
Loans - net 293,626 304,097
------- -------
Premises and equipment - net 11,131 11,184
Accrued interest receivable 2,593 2,372
FHLB and FRB stock 3,548 3,118
Other assets 7,415 7,143
------- -------
TOTAL ASSETS $413,032 $418,942
======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Deposits:
Non-interest bearing $ 59,308 $ 73,297
Interest bearing 265,231 251,464
------- -------
Total deposits 324,539 324,761
Borrowing from FHLB 45,061 50,667
Accrued interest payable and
other liabilities 2,397 2,582
------- -------
TOTAL LIABILITIES 371,997 378,010
------- -------
Stockholders' equity:
Common stock, $50 par value;
240,000 shares authorized;,
162,208 issued: 8,110 8,110
Capital surplus 8,489 8,489
Retained earnings 24,870 24,742
Treasury stock at cost (1,713 and
1,642 shares, respectively) (553) (528)
Accumulated other comprehensive
income 119 119
------- -------
TOTAL STOCKHOLDERS' EQUITY 41,035 40,932
------- -------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $413,032 $418,942
======= =======
Fair value of securities $ 71,302 $ 71,284
======= =======
<FN>
See notes to condensed consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
CANANDAIGUA NATIONAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
For the three month periods ended March 31, 1998 and 1997
(Dollars in thousands, except per share amounts)
<CAPTION>
Three months ended
March 31
------------------
1998 1997
------ ------
<S> <C> <C>
Interest income:
Loans, including fees $ 6,828 $ 6,100
Federal funds sold and others 33 4
Investment securities 994 999
------ ------
Total interest income 7,855 7,103
Interest expense:
Deposits 2,437 2,282
Borrowings 673 182
------ ------
Total interest expense 3,110 2,464
------ ------
Net interest income 4,745 4,639
Provision for loan losses 323 333
------ ------
Net interest income after
provision for loan losses 4,422 4,306
------ ------
Other income:
Service charges on
deposit accounts 311 399
Trust 511 382
Other 532 313
------ ------
Total other income 1,354 1,094
------ ------
Operating expenses:
Salaries & employee benefits 2,352 2,278
Occupancy 683 547
Stationery, supplies & postage 159 167
Other fees 52 52
Other 1,110 763
------ ------
Total operating expenses 4,356 3,807
------ ------
Income before income taxes 1,420 1,593
Provisions for income taxes 409 570
------ ------
NET INCOME $1,011 $1,023
====== ======
Basic earnings per share $ 6.30 $ 6.34
====== ======
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CANANDAIGUA NATIONAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited)
For the three month periods ended March 31, 1998 and 1997
(Dollars in thousands, except per share amount)
<CAPTION>
Accumulated
Additional Other
Common Paid in Undivided Treasury Comprehensive
Stock Capital Profits Stock Income Total
------ ------ ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1998 $ 8,110 8,489 24,742 (528) 119 40,932
----- ----- ------ --- --- ------
Comprehensive income:
Net income 1,011 1,011
----- ----- ------ --- --- ------
Comprehensive income 1,011 1,011
----- ----- ----- --- --- -----
Cash dividend - $5.50 per share (883) (883)
Purchase of 71 shares of treasury stock (25) (25)
----- ----- ------ --- --- ------
Balance at March 31, 1998 $ 8,110 8,489 24,870 (553) 119 41,035
===== ===== ====== === === ======
Balance at January 1, 1997 $ 8,110 8,489 22,616 (174) 78 39,119
----- ----- ------ --- --- ------
Comprehensive income:
Net income - - 1,023 - - 1,023
----- ----- ----- --- --- -----
Comprehensive income - - 1,023 - - 1,023
----- ----- ----- --- --- -----
Cash dividends - $4.75 - - (768) - (768)
Purchase of 480 shares of treasury stock (156) (156)
----- ----- ------ --- --- ------
Balance at March 31, 1997 $ 8,110 8,489 22,871 (330) 78 39,218
===== ===== ====== === === ======
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CANANDAIGUA NATIONAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
For the three month periods ended March 31, 1998 and 1997
(Dollars in thousands)
<CAPTION>
Three months ended
March 31,
---------------------
1998 1997
------ ------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 1,011 $ 1,023
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation 438 348
Accretion and amortization (34) (27)
Provision for loan losses 323 333
Originations of loans held for sale (8,023) (1,023)
Proceeds from sale of loans held for sale 8,092 1,064
(Increase) decrease in accrued interest
receivable (221) (377)
(Increase) decrease in other assets (1,067) (438)
Increase (decrease) in accrued interest
payable and other liabilities (185) 159
------- ------
Net cash from operating activities 334 1,062
------- ------
Cash flows from investing activities:
Proceeds from maturities of investments 10,522 9,442
Investment purchases (9,991) ( 9,514)
Loans made, net of principal payments 10,079 (10,746)
Fixed asset purchases, net (385) (588)
Purchase of FRB & FHLB stock (430) (992)
Proceeds from sale of other real estate 853 -
Investment in minority owned subsidiary ( 75) (555)
------- -------
Net cash provided (used)
by investing activities 10,573 (12,953)
------- -------
Cash flows from financing activities:
Net increase (decrease) in demand, savings
and short term deposits (8,860) 4,702
Proceeds from issuance of certificates of
deposit net of matured certificates 8,638 (221)
Dividends paid (883) (768)
Net advances from (repayments to) FHLB (5,606) 6,962
Purchase of treasury stock (25) (156)
------- -------
Net cash provided (used) by financing
activities (6,736) 10,519
------- -------
Net increase (decrease) in cash &
cash equivalents 4,171 (1,372)
Cash & cash equivalents - beginning of
period 19,647 19,173
------- -------
Cash & cash equivalents-end of period $ 23,818 $ 17,801
======= =======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $4,780 $2,464
Income Taxes $ 631 $ 365
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
CANANDAIGUA NATIONAL CORPORATION
AND CONSOLIDATED SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 1998
(1) Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and Article
10 of Regulation S-X and with generally accepted accounting principles for
interim financial information. Such principles are applied on a basis
consistent with those reflected in the December 31, 1997 Form 10-K Report
of the Company filed with the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. Management has prepared the financial information included
herein without audit by independent certified public accountants. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three-month period ended March 31, 1998 are not
necessarily indicative of the results that may be expected for the year
ended December 31, 1998. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended December 31, 1997.
(2) Comprehensive Income
On January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." This statement establishes standards for reporting
and display of comprehensive income and its components (revenues, expenses,
gains and losses) in a full set of general-purpose financial statements.
Comprehensive income includes a company's reported net income adjusted for
items that are currently accounted for as direct entries to stockholders'
equity, such as the mark to market adjustment on securities available for
sale. The Company's only sources of comprehensive income are net income and
changes in unrealized gains (losses), net of taxes, on available-for-sale
securities. Accumulated other comprehensive income represents the net
unrealized gains or losses on securities available for sale as of the
balance sheet date. The adoption of this statement resulted in no
reclassification of prior period amounts, because the Company has not
realized any gains on the sale of its available-for-sale securities.
(3) New Accounting Pronouncements
FASB Statement No. 131 entitled "Disclosures about Segments of an
Enterprise and Related Information" was issued in June 1997. This
Statement is effective for the Company beginning with its year end December
31, 1998 financial statements. The statement establishes standards for the
way public companies report information about operating segments in their
annual financial statements and requires that those companies 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.
FASB Statement No. 132 entitled "Employers' Disclosures about Pensions and
Other Post Retirement Benefits" was issued in February 1998. This
statement revises employers' disclosures about pension and other post
retirement benefit plans. It does not change the measurement or
recognition of these plans. The statement is effective for the Company's
December 31, 1998 year end financial reporting and will not impact the
Company's financial position or results of operations as the Company does
not sponsor any plans covered by this statement.
<PAGE>
CANANDAIGUA NATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
March 31, 1998
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, 1997 contained in the Company's Form 10-K 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 decreased $5.9 million or 1.4% in the first three months of
1998. Loans decreased $10.5 million or 3.4% while securities decreased $.5
million or 0.7%. During the same period, deposits decreased $.2 million or
0.1% and borrowings (from the FHLB) decreased $5.6 million or 11.1%. Funds
generated through loan paydowns and refinancings were used to reduce FHLB
borrowings during the period.
Net income for the three-month period ended March 31, 1998 declined $.01
million or 1.2% as compared to the same period in 1997. Basic income per
share decreased by $.04 or 0.6% over the same period. The decrease in net
income was a result of increased operating costs outpacing increases in net
interest and other operating income. A substantial portion of the
increased operating expenses was derived from one of the Company's mortgage
banking subsidiaries, which was not acquired until late 1997. For the
quarter ended March 31, 1998, net interest income increased $.1 million or
2.3% over the same quarter in 1997 and is reflective of the growth in
interest income from the Company's indirect automobile loan portfolio
offset by the growth in interest expense from FHLB borrowings during the
same period.
Results of Operations
As of March 31, 1998, total assets of the Company were $413.0 million, down
from $418.9 million at year end 1997. Securities showed a minor decrease
of $.5 million to $70.9 million. Net loans decreased $10.5 million to
$293.6 million, other assets rose $.3 million to $7.4 million, and cash and
due from banks increased $4.2 million to $23.8 million. The decline in
loans is primarily related to payoffs and refinancings of mortgage loans
held in portfolio and is a reaction to the continued low interest rate
environment for residential mortgage loans.
Total deposits at March 31, 1998 were $324.5 million and were down $.2
million from December 31, 1997. For the same period borrowings from FHLB
were down $5.6 million to $45.0 million. Other liabilities declined by $.2
million to $2.4 million. The decline in borrowings is a direct result of
the decline in loans.
For the first three months ending March 31, 1998, average interest earning
assets, increased $19.7 million to $375.3 million from $355.6 million at
December 31, 1997. The yields on these assets were 8.37% and 8.39%,
respectively. For the same period, average interest bearing liabilities
increased $23.7 million to $308.7 million from $285.0 at December 31, 1997.
Rates paid on these liabilities were 4.03% and 3.94%, respectively. This
11 basis point drop in interest spread had a negative impact on net
interest income. Combined with this drop in spread and a $4.0 million
increase in interest bearing liabilities (FHLB borrowings) over interest
earning assets, the Company's net interest margin declined to 5.06% for the
three months ended March 31, 1998 versus 5.23% for the year ended December
31, 1997.
Other income for the quarter ended March 31, 1998 was $1.4 million, an
increase of $.3 million or 23.8% over the same quarter in 1997. The
increase was reflected both in trust income, due to growth in assets under
management, and other operating income attributed to the Company's mortgage
banking subsidiaries.
Operating expenses increased $.5 million for the quarter ended March 31,
1998 to $4.3 million versus $3.8 million for the 1997 first quarter,
reflected mostly in other operating expenses. The increase in this
category for the period was due to the Company's acquisition of Home Town
Funding in late 1997, a net recovery on nonperforming assets in 1997 of $.1
million and increases in legal fees of $.1 million in 1998.
The effective income tax rate for the quarter ended March 31, 1998 was
28.8% versus 35.7% for the quarter ended March 31, 1997. This reduction in
rate is due to the Company's ability to use net operating losses generated
by its non-banking subsidiaries.
Allowance for Loan Losses and Non-Performing Assets
Allowance for Loan Losses:
Changes in the allowance for loan losses for the three months ended March
31, 1998 and 1997 are as follows:
1998 1997
----- -----
Balance at beginning of period $ 3,153 $ 2,675
Provision for loan losses 323 333
Loans charged off (419) (266)
Recoveries on loan previously charged off 111 73
----- -----
Balance at end of period $ 3,168 $ 2,815
===== =====
Allowance as a percentage of
total period end loans 1.07% 1.03%
===== =====
Allowance as a percentage of
non performing loans 83.90% 37.77%
===== =====
At March 31, 1998, the recorded investment in loans that are considered
impaired totaled $3.2 million as compared to $3.1 million at December 31,
1997 and $7.5 million at March 31, 1997. The average recorded investments
in impaired loans during the periods then ended was approximately $3.1
million and $9.4 million, respectively. For the three months ended March
31, 1998 and 1997 interest income recognized on the impaired loans was not
material.
Total non-performing loans decreased by $3.7 million to $3.8 million at
March 31, 1998 as compared to $7.5 million at March 31, 1997. A major
portion of the decrease was contributed by a $3.4 million reduction in non
accrual commercial real estate through the Company's successful workout in
mid 1997 of one large credit. Loans 90 days or more past due and accruing
have increased to $.5 million at March 31, 1998 from March 31, 1997.
However, since these loans continue to accrue interest, because management
considers principal and interest on these loans fully collectible,
management considers this trend positive in light of the reduction in total
non-performing loans.
Other real estate owned consists of eight parcels of property: one
residence for $7,000 and seven commercial properties for $1.7 million. The
growth in other real estate owned from the same period in 1997 is a result
of the Company's foreclosure on $ 2.1 million in real estate assets in May
1997. Since that time, the Company has reduced its exposure to this asset
by $1 million through a combination of sales and writedowns. The remaining
parcels and property have a carrying value of less than $.11 million each.
All properties have been recently appraised at values higher than their
carrying amount.
NON-PERFORMING ASSETS
(in thousands)
March 31,
1998 1997
----- -----
Loans past due 90 days or more and accruing:
Commercial, financial & agricultural $ 272 0
Real estate-commercial 18 0
Real estate-residential 203 0
Consumer 44 10
----- -----
Total past due 90 days or more
and accruing $ 537 10
----- -----
Loans in non-accrual status:
Commercial, financial & agricultural $ 1,151 $ 1,579
Real estate-commercial 1,390 4,812
Real estate-residential 698 988
Consumer 0 74
------ ------
Total non-accrual loans 3,239 7,453
------ ------
Total non-performing loans 3,776 7,463
------ ------
Other real estate owned
Commercial 1,652 852
Residential 7 275
------ ------
Total other real estate owned 1,659 1,127
------ ------
Total non-performing assets $ 5,435 $ 8,590
====== ======
Non performing loans to total period
end loans 1.27% 2.43%
====== ======
Non performing assets to total period
end loans and other real estate 1.82% 2.72%
====== ======
The Company has no restructured loans.
Liquidity
Liquidity is defined as the ability to generate adequate amounts of cash to
meet the demand for cash from depositors who wish to withdraw funds,
borrowers who require funds, and capital expansion. Liquidity is produced
by cash flows from operating, investing, and financing activities of the
Company.
For the three months ended March 31, 1998, net cash from operating
activities was $.3 million as compared to $1.1 million for the same period
in 1997. The decrease of $.8 million was primarily caused by an increase
in other assets related to the Company's growing indirect automobile
portfolio.
Cash flows provided by investing activities were $10.6 million versus cash
flows used of $12.9 million for the three months ended March 31, 1998 and
1997, respectively. The loan portfolio decreased by $10.1 million for the
first three months of 1998 as compared to an increase of $10.7 million for
the same period in 1997. The investment portfolio had a net increase of
$.5 million for the first three months of 1998 as compared to a net
increase of $.07 million for the first three months of 1997.
Cash flows used by financing activities were $6.7 million in 1998 versus
cash flow provided of $10.5 million in 1997. Major components contributing
to this change were a net decrease of $8.9 million in demand deposits,
savings and short-term deposits, an increase in time deposits of $8.6
million and a decrease in borrowings from FHLB of $5.6 million. The Company
has been actively pricing some of its liabilities in an attempt to grow
deposit levels in certain maturity ranges.
<PAGE>
Interest Rate Sensitivity and Asset / Liability Management Review
As of March 31, 1998, the Company's three-month gap is a negative $154.8
million, which is $40 million higher than one year ago. While loans in
this bucket have declined $11 million, interest bearing liabilities have
risen $30 million. FHLB borrowings are up $23 million and short term
certificates of deposit rose $13 million.
The 12 month gap is a negative $157.4 million up from a year ago's negative
$119.2 million, again due primarily to the FHLB borrowings.
Gap continues to be positive in the 1 - 5 year range at $146.3 million, as
a major portion of the loan portfolio falls into that bucket, while only
10% of interest bearing liabilities are in the bucket.
In continuing the Company's active asset liability management, we have
identified a program of certificate of deposit sales and are pursuing its
establishment. The Company is also considering pursuing a means to market
a subordinated debenture issuance.
<PAGE>
Interest Rate Sensitivity Gap
As of March 31, 1998
(dollars in thousands)
0-3 4-12 1-5 Over 5
Months Months Years Years
------- ------ ------- ------
Loans $ 88,068 4,453 146,272 58,001
Investment portfolio 5,594 19,336 35,766 13,753
------- ------ ------- ------
Interest-earning assets 93,662 23,789 182,038 71,754
------- ------ ------- ------
Certificate of deposits 65,247 26,395 30,584 --
Savings 61,629 -- -- --
Royal blue money market 17,313 -- -- --
Now & Super Now 37,464 -- -- --
Money Market 26,599 -- -- --
Borrowing from FHLB 40,200 -- 4,861 --
------- ------ ------- ------
Interest-bearing liabilities 248,452 26,395 35,715 0
------- ------ ------- ------
Interest sensitivity gap (154,790) (2,606) 146,323 71,754
======= ====== ======= ======
Rate Sensitive Assets to
Rate Sensitive
Liabilities 0.38 .90 5.10
==== ==== ====
<PAGE>
Capital Adequacy
Total stockholders' equity was $41.0 million at March 31, 1998, which
represents an increase of $.1 million or .2% from $40.9 million at December
31, 1997. Stockholders' equity increased by $1.0 million due to net
income, but was offset by dividends of $.9 million and purchases of
treasury stock of $.03 million for the three month period ended March 31,
1998.
At March 31, 1998 the Company and its banking subsidiary exceeded the
minimum regulatory guidelines for all capital ratios (Tier 1 - 4% and Total
Risk-Based Capital - 8%). The Company and Bank also exceeded the minimum
regulatory guideline for leverage ratio of 5% for "well-capitalized"
institutions. The table below illustrates the Corporation's regulatory
capital ratios at March 31, 1998, under current requirements. (The Bank's
ratios do not differ materially from the Company's):
March 31, 1998
(dollars in thousands)
--------------------
Tier 1 Capital $ 40,703
Tier 2 Capital $ 3,168
Total Qualifying Capital $ 43,871
Total Risk Adjusted Total Assets $297,701
Tier 1 Risk Based Capital Ratio 13.67%
Total Risk Based Capital Ratio 14.74%
Leverage Ratio (Tier 1 capital divided
by Total Assets less Goodwill) 9.94%
The ratios above are indicative of the Corporation's strong capital
position.
Dividends Per Share and Earnings Per Share
The semi-annual dividend payable February 1, 1998 was $5.50 versus $4.75
for the same period in 1997.
Basic earnings per common share is based upon the weighted average number
of common shares and equivalents (stock options) outstanding during the
period. Since there are no potentially dilutive securities outstanding at
March 31, 1998, diluted earnings per share is not presented. The weighted
average number of common shares outstanding for the three month periods
ended March 31, 1998 and 1997 were 160,565 and 161,303, respectively. Net
income used in the calculation of basic earnings per share is net income
shown on the condensed consolidated statements of income for the respective
periods.
<PAGE>
INDEX
CANANDAIGUA NATIONAL CORPORATION
AND CONSOLIDATED SUBSIDIARY
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed consolidated balance sheets at March 31, 1998 and
December 31, 1997.
Condensed consolidated statements of income for the three month
periods ended March 31, 1998 and 1997.
Condensed consolidated statements of stockholders' equity for the
three month periods ended March 31, 1998 and 1997.
Condensed consolidated statements of cash flows for the three
month periods ended March 31, 1998, and 1997.
Notes to condensed consolidated financial statements at
March 31, 1998.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 3. Qualitative and Quantitative Disclosures about Market Risk
This information is incorporated by reference in Part I, Item 2,
Liquidity section.
PART II. OTHER INFORMATION
Item 1. Legal proceedings
Item 2. Changes in securities
Item 3. Defaults upon senior securities
Item 4. Submission of matters to a Vote of security holders
Item 5. Other information
Item 6. Exhibits and reports on form 8-K
SIGNATURES
CANANADIAGUA NATIONAL CORPORATION
AND CONSOLIDATED SUBSIDIARY
PART II. OTHER INFORMATION
Item 1. Legal proceedings - None
Item 2. Changes in securities
Item 3. Defaults upon senior securities - None
Item 4. Submission of matters to a vote of security holders
(a) The annual meeting of stockholders of Canandaigua National
Corporation was held on March 11, 1998 for the following purpose:
(1) Three directors were elected for a three-year term and
votes were cast as follows:
<TABLE>
<CAPTION>
Votes
Name For Withheld Abstain Against
____ ------- -------- ------- -------
<S> <C> <C> <C> <C>
Robert G. Sheridan 108,361 460 0 0
Patricia A. Boland 108,331 490 0 0
Alan J. Stone. 108,361 460 0 0
</TABLE>
(2) Shareholders approved the adoption of the Canandaigua National
Corporation Stock Option Plan. Votes were cast as follows:
<TABLE>
<CAPTION>
Votes
For Withheld Abstain Against
------- -------- ------ --------
<S> <C> <C> <C> <C>
100,339 0 4,854 3,628
</TABLE>
Item 5. Other information - None
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - None
<PAGE>
CANANDAIGUA NATIONAL CORPORATION
AND CONSOLIDATED SUBSIDIARY
SIGNATURE
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.
CANANDAIGUA NATIONAL CORPORATION
(Registrant)
May 15, 1998 George W. Hamlin, IV
Date George W. Hamlin, IV
President
May 15, 1998 Gregory S. MacKay
Date Gregory S. MacKay
Treasurer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-01-1998
<PERIOD-END> Mar-31-1998
<CASH> 23,556
<INT-BEARING-DEPOSITS> 262
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 394
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<COMMON> 8,110
0
0
<OTHER-SE> 32,925
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<INTEREST-TOTAL> 7,855
<INTEREST-DEPOSIT> 2,437
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<EPS-PRIMARY> 6.30
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<YIELD-ACTUAL> 8.37
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<ALLOWANCE-CLOSE> 2,168
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
