<PAGE> 1
FORM 10-Q -- QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 34-26589, eff. 4/12/89)
United States Securities and Exchange Commission
FORM 10-Q
(MARK ONE)
[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934.
For the period ended March 31, 1999
----------------------------
[ ] 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: 0-13655
-------------------------------------------------------------------
Security Banc Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 31-1133284
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
40 South Limestone Street, Springfield, OH 45502
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(937) 324-6920
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
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.
X Yes No
----- -----
Indicate the number of shares outstanding of each of the registrant's classes of
common stock.
Class Outstanding at April 4, 1999
- -------------------------------- ----------------------------
Common Stock, $1.5625 Par Value 12,174,162
Page 1
<PAGE> 2
SECURITY BANC CORPORATION AND SUBSIDIARIES
<TABLE>
INDEX
<CAPTION>
PAGE NO.
<S> <C>
Part I - Financial Information
Item 1 - Financial Statements:
Consolidated Condensed Balance Sheets
March 31, 1999 and December 31, l998. 3
Consolidated Condensed Statements of Income
for the three (3) months ended March 31, 1999
and March 31, 1998. 4
Consolidated Condensed Statements of Cash
Flows for the three (3) months ended March 31,
1999 and March 31, 1998. 5
Consolidated Condensed Statements of Shareholders
Equity for the three (3) months ended March 31, 1998
and March 31, 1999. 6
Notes to Consolidated Condensed Financial Statements. 7
Item 2 - Management's Discussion and Analysis of
Condition and Results of Operations 8-14
Part II - Other Information 15
Signature 16
</TABLE>
Page 2
<PAGE> 3
PART I ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
SECURITY BANC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31 Dec 31
1999 1998
---- ----
(in thousands)
<S> <C> <C>
ASSETS
Cash and due from banks $ 27,621 $ 34,052
Federal funds sold 24,150 21,350
-------- --------
TOTAL CASH AND CASH EQUIVALENT 51,771 55,402
-------- --------
Interest bearing deposits with other banks 1,560 2,700
Investments (Market Value $233,467 @3-31-99,
$167,365 @ 12-31-98) 233,529 167,324
Loans: Commercial and agricultural 295,098 285,958
Real estate and mortgage 255,473 252,609
Consumer 75,832 78,375
-------- --------
TOTAL LOANS 626,403 616,942
Less: Allowance for Loan Losses (6,733) (6,883)
-------- --------
NET LOANS 619,670 610,059
Premises and Equipment 9,153 9,224
Other Assets 40,380 38,791
-------- --------
TOTAL ASSETS $956,063 $883,500
======== ========
LIABILITIES
Non-interest bearing deposits $127,551 $131,285
Interest bearing demand deposits 153,634 148,462
Savings deposits 156,436 154,876
Time deposits, $100,000 and over 45,199 44,794
Other time deposits 224,269 229,436
-------- --------
TOTAL DEPOSITS 707,089 708,853
Fed funds purchased and securities sold
under agreement to repurchase 25,794 28,993
Federal Home Loan Bank Term Advances 97,916 22,816
Other liabilities 5,785 4,709
-------- --------
TOTAL LIABILITIES $836,584 $765,371
-------- --------
SHAREHOLDERS'S EQUITY
Common Stock (Par Value $1.5625) $ 19,786 $ 19,768
Shares authorized 18,000,000
Shares issued 12,662,952 - 1999
Surplus 22,221 22,084
Retained earnings 82,235 79,756
Accumulated other comprehensive income (1,251) (121)
Less: Treasury Stock, 488,790 shares, 1999 3,512 3,358
-------- --------
TOTAL SHAREHOLDERS' EQUITY 119,479 118,129
-------- --------
TOTAL LIABILITIES &
SHAREHOLDER'S EQUITY $956,063 $883,500
======== ========
</TABLE>
See notes to Consolidated Condensed Financial Statements
Page 3
<PAGE> 4
PART 1 ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
SECURITY BANC CORPORATION
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31 March 31
1999 1998
---- ----
(in thousands except
per share data)
<S> <C> <C>
Interest Income $16,628 $15,693
Interest Expense 6,496 5,982
------- -------
NET INTEREST INCOME 10,132 9,711
Provision for loan losses 300 200
------- -------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 9,832 9,511
OTHER OPERATING INCOME
Trust Income 471 360
Service charges on deposit accounts 758 758
Securities, Gains (Losses) 20 44
Other charges, rents and fees 735 712
------- -------
TOTAL OTHER OPERATING INCOME 1,984 1,874
OPERATING EXPENSES
Salaries and employee benefits 2,905 2,785
Equipment and occupancy expense 670 664
Other operating expense 2,216 2,295
------- -------
TOTAL OPERATING EXPENSE 5,791 5,744
INCOME BEFORE TAXES 6,025 5,641
Income taxes (See Note B) 1,964 1,924
------- -------
NET INCOME $ 4,061 $ 3,717
======= =======
Basic earnings per share $ .33 $ .31
Diluted earnings per share $ .33 $ .31
Cash dividends per share $ .13 $ .105
Weighted average shares outstanding 12,171,132 12,131,750
</TABLE>
See notes to Consolidated Condensed Financial Statements.
Page 4
<PAGE> 5
PART 1 ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
SECURITY BANC CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<CAPTION>
March 31 March 31
1999 1998
---- ----
(IN THOUSANDS)
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income ................................................... $ 4,061 $ 3,717
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation ............................................. 289 266
(Gain)/Loss on sale of the following:
Investment Securities available for sale ............... (20) (44)
Other Assets ........................................... (11) (7)
Provision for loan losses ................................ 300 200
Amortization and accretion, net .......................... 14 (108)
Amortization and core deposit intangible ................. 168 168
Change in other operating assets and liabilities, net .... (5,719) (5,628)
-------- --------
Total Adjustments ....................... (4,979) (5,153)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES .............................. $ (918) $ (1,436)
Cash Flows From Investing Activities:
Net decrease in interest bearing deposits with other banks ... 1,140 0
Proceeds from maturities and sales of Investment securities
available for sale ......................................... 11,464 7,524
Proceeds from maturities of Investments held to maturity ..... 1,510 4,355
Purchase of:
Investment securities available for sale ................... (79,490) (4,450)
Investment securities held to maturity ..................... (1,425) 0
Increase in loans ............................................ (8,745) (811)
Proceeds from sale of other assets ........................... 4,459 5,532
Capital expenditures ......................................... (181) (416)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES ........................ (71,268) 11,734
Cash Flows from Financing Activities:
Net increase in demand deposits, NOW accounts and
savings accounts ........................................... 8,941 4,235
Net (decrease) increase in certificates of deposit ........... (10,705) 1,497
Net increase (decrease) in short-term borrowed funds ......... 1,900 (12,972)
Net Increase in other borrowed money ......................... 70,000 0
Net purchase and sale of treasury stock ...................... (154) 0
Dividends paid ............................................... (1,582) (1,274)
Proceeds from exercise of stock options ...................... 155 29
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES .................... 68,555 (8,485)
Net (decrease) increase in cash and cash equivalents ................... (3,631) 1,813
Cash and cash equivalents at beginning of year ......................... 55,402 85,698
-------- --------
Cash and cash equivalents at March 31 .................................. $ 51,771 $ 87,511
</TABLE>
See Notes to Consolidated Financial Statements.
Page 5
<PAGE> 6
<TABLE>
SECURITY BANC CORORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY (UNAUDITED)
<CAPTION>
Accumulated
Treasury Other
Common Retained Stock Comprehensive Comprehensive
(dollars in thousands, except per share amounts) Stock Surplus Earnings at Cost Income Income
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1997 $19,707 $21,831 $70,149 ($3,193) $242
Net Income 3,717 3,717
Other comprehensive income:
Net unrealized gains on securities available for sale
net of income taxes of $28 52 52
------
Total comprehensive income 3,769
======
Cash dividends on common shares ($.105 per share) (1,274)
Exercise of stock options 6 23
===================================================================================================================================
BALANCE AT MARCH 31, 1998 19,713 21,854 72,592 (3,193) 294
===================================================================================================================================
BALANCE AT DECEMBER 31, 1998 19,768 22,084 79,756 (3,358) (121)
Net Income 4,061 4,061
Other comprehensive income:
Net unrealized (losses) on securities available for sale
net of income taxes of $608 (1,130) (1,130)
------
Total comprehensive income 2,931
======
Cash dividends on Common Shares ($.13 per share) (1,582)
Exercise of stock options 18 137
Purchase of treasury stock (154)
===================================================================================================================================
BALANCE AT MARCH 31, 1999 19,786 22,221 82,235 (3,512) (1,251)
===================================================================================================================================
</TABLE>
See Notes to Consolidated Financial Statements (Unaudited)
Page 6
<PAGE> 7
SECURITY BANC CORPORATION
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - Preparation
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments consisting of normal re-occurring items necessary to
present fairly the financial condition of the company as of March 31, 1999 and
the results of operations and cash flows for the three month periods ended March
31, 1999 and March 31, 1998.
NOTE B - TAXES
The effective tax rate of 33% is lower than the statutory 35% because of
investments made in tax exempt municipal securities. The subsidiaries of
Security Banc Corporation have approximately $26,871,000 invested in tax exempt
municipal securities.
NOTE C - Common Share Information
All common share information is adjusted for the 2-for-1 stock split effective
May 29, 1998.
Page 7
<PAGE> 8
SECURITY BANC CORPORATION
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 Registrant's financial condition and results of
operations during the periods included in the consolidated financial statements
enclosed with this filing.
From time to time, the Corporation may publish forward-looking statements
relating to such matters as anticipated financial performance, business
prospects, new banking and financial service products and similar matters. The
Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. In order to comply with the terms of the safe
harbor, Corporation notes that a variety of factors could cause its actual
results and experiences to differ materially from the anticipated results or
other expectations expressed in its forward-looking statements. These risks and
uncertainties include, with limitation, changes in interest rates, developments
in the economies served by the Corporation, changes in anticipated credit
quality trends and changes in accounting, tax or regulatory practices or
requirements.
ECONOMIC OUTLOOK
The continued strength of the economy remains a surprise to many economists. The
index of leading economic indicators rose in February indicating stable
conditions over the next six months. The index's trend over the last year has
continued to improve. The manufacturing sector appears to be rebounding as
domestic demand for goods has stayed strong and export orders have improved. The
outlook for the entire year, however appears to favor a slight slowdown. The
trade deficit is expected to deteriorate as many of the US's trading partners
experience economic problems. While consumer spending and borrowing remain
brisk, an eventual decrease is expected. Corporate spending on investments and
hiring plans will be affected by the squeeze on profits. The agricultural
economy is experiencing sustained softness in crop and hog prices which raise
concern about the future health of farming.
With slower growth and low inflation, the Federal Reserve has chosen to hold
interest rates steady. Rate moves in either direction could trigger a negative
reaction. A rise in rates would effect the stock market and negatively impact
consumer confidence, thus initiating a slowdown. A drop in rates could increase
demand and inflation and cause the economy to overheat rapidly.
Locally the economy continues to prosper. New capital investment appears to be
steady and unemployment rates, while increasing, remain low.
YEAR 2000 COMPLIANCE
Management formed, in July 1997, a "Year 2000 Committee" to initiate the process
of preparing its computer systems and applications for the Year 2000. The
process involves identifying and remediating data recognition problems in
computer systems and software and other operating equipment that could be caused
by the date change from December 31, 1999 to January 1, 2000.
The Year 2000 Committee has identified "Mission Critical" components for
Information Technology systems, Non-information Technology systems, and business
processes. Information Technology includes, for example, systems that service
loan and deposit customers. Non-information Technology systems include security
systems, elevators, utilities, and voice/data communications. An application,
system, or process is Mission Critical if it is vital to the successful
continuance of a core business activity.
The Corporation's progress towards meeting the Plan's goals for both Information
Technology systems and Non-information Technology systems, which follows a five
phase approach recommended by federal bank regulators, is as follows:
<TABLE>
<CAPTION>
PHASE COMPLETE DATE**
----- -------- ------
<S> <C> <C>
MISSION CRITICAL
Awareness 100% October, 1997
Assessment 100% February, 1998
Renovation 100% December, 1998
Testing/Validation 100% March 31, 1999
Implementation 50%* June 30, 1999
</TABLE>
Page 8
<PAGE> 9
The Year 2000 Committee is working with significant customers, vendors, and
business counterparties to monitor the progress of their Year 2000 efforts,
Management believes it has an effective plan in place to resolve the Year 2000
issue in a timely manner and, thus far, activities have tracked in accordance
with the original plan. Management is in the process of modifying its existing
business continuity plans and is also developing contingency plans to address
potential risks in the event of Year 2000 failures, including non-compliance by
third parties. Despite Corporation's efforts to date to remediate affected
systems and develop contingency plans for potential risks, management has not
yet completed all activities associated with resolving its Year 2000 issues.
Management does not expect the year 2000 compliance expenses to be material to
the Company's future earnings. The Company expects its year 2000 date conversion
project to be completed on a timely basis.
**Date completed or estimated date of completion.
*Status as of May 1, 1999.
RESULTS OF OPERATIONS
Net income was $4,061,000 for the first three months of 1999 compared to
$3,717,000 for the same period of 1998. Basic earnings per share were $.33 for
the first three months, a 6% increase over last year's $.31. Diluted earnings
per share were $.33 for the first three months, a 6% increase over last year's
$.31.
Total assets were $956,063,000 at March 31, 1999 compared to 1998's assets of
$834,764,000. For the first three months of 1999, return on average equity was
13.60% and return on average assets was 1.75%.
Interest and fees on loans increased to $13,291, 000 for the three months ended
March 31, 1999 compared to $12,845,000 for the three months ending March 31,
1998. Average loans were $620,245,000 and $562,923,000 at March 31, 1999 and
1997 respectively, a 10% increase.
Income from securities increased to $2,801,000 from $2,103,000 for the three
months ended March 31, 1999 and 1998 respectively. The average outstanding for
securities were $192,298,000 and $147,426,000 at March 31, 1999 and 1998
respectively, a 30% increase.
Interest income from Fed Funds sold and other interest bearing assets increased
to $536,000 at March 31, 1999 compared to $858,000 for the three months ended
March 31, 1999. The average outstanding for Fed Funds and interest bearing
deposits were $43,547,000 and $61,679,000 at March 31, 1999 and 1998
respectively, a 29% decrease.
Interest bearing liabilities average outstanding at March 31, 1999 were
$675,581,000 compared to $604,073,000 at March 31, 1998 Interest expense
increased to $6,496,000 at March 31, 1999 from $6,095,000 at March 31, 1998 a 7%
increase.
Net interest income on a fully taxable equivalent basis for the first three
months of 1999 was $10,309,000 compared to the $9,825,000 realized in the same
period of 1998.
Market value per share was $41.50 at March 31, 1999 as compared to $28.625 at
March 31, 1998. Book value per share was $9.81 at March 31, 1999 and $9.17 at
March 31, 1998. The efficiency ratio was 46% and 48% respectively for March 31,
1999 and March 31, 1998.
Page 9
<PAGE> 10
PART 1 ITEM 2 (CONT'D.)
<TABLE>
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
<CAPTION>
For Period Ending March 31
1999 (000's) 1998
---- ----
<S> <C> <C>
Balance at beginning of period 6,883 6,254
Charge-offs:
Domestic:
Commercial, financial and agriculture (278) (25)
Real estate -- construction
Real estate -- mortgage (0) (284)
Installment loans to individuals (278) (247)
Lease financing 0 0
------ ------
(556) (556)
Recoveries:
Domestic:
Commercial, financial and agriculture 16 792
Real estate -- construction
Real estate -- mortgage 0 16
Installment loans to individuals 0 70
Lease financing 54 0
------ ------
70 878
Net charge-offs (486) 322
Other adjustments 36 0
Additions charged to operations 300 200
------ ------
Balance at end of period $6,773 $6,776
Ratio of net charge-offs during the period of average loans
outstanding during the period. (.08%) .06%
</TABLE>
Beginning in 1995, the Company adopted Financial Accounting Standards Board
Statement No. 114, "Accounting by Creditors for Impairment of a Loan". Under the
new standard, the allowance for credit losses related to loans that are
identified for evaluation in accordance with Statement 114 is based on
discounted cash flows using the loan's initial effective interest rate or the
fair value of the collateral for certain collateral dependent loans. Prior to
1995, the allowance for credit losses related to these loans was based on
undiscounted cash flows or the fair value of the collateral for collateral
dependent loans. The following table presents data concerning loans at risk at
the end of each period. (000s).
<TABLE>
<CAPTION>
December 31
March 31, ----------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Non-accrual loans $1,915 $2,154 $3,417 $4,123 $2,772
Accruing loans past due
90 days or more 1,726 1,371 1,537 1,709 1,543
Restructured loans 320 322 333 0 0
Other real estate owned 1,499 1,531 258 256 0
</TABLE>
Total other operating income was $1,984,000 and $1,874,000 during the first
three months of 1999 and 1998 respectively. Trust income increased 31%. There
was a no increase in service charges on deposits, and a 3% increase in other
charges, rents and fees. Total securities gains for the first three months of
1999 were $20,000 or $13,000 after tax. Total securities gains for the same
period of 1998 were $44,000 or $29,000 after tax.
Page 10
<PAGE> 11
PART 1 ITEM 2 - PAGE 2
SECURITY BANC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Total operating expenses increased $47,000 during the first three months, 1%
over the similar period of 1998. Salaries, wages and employee benefits increased
4% over 1998. Equipment and net occupancy expenses during the first three months
were $670,000 and $664,000 for 1999 and 1998 respectively, which reflects a 1%
increase. Other operating expenses decreased $78,000 compared to 1998.
The Corporation continues to look for opportunities to maximize Other Income and
reduce Other Expense, thus enhancing the efficiency ratio.
MATERIAL CHANGES IN FINANCIAL CONDITION
The material changes (5% or greater) on the consolidated condensed balance
sheets are:
Cash and due from Banks - (decrease of 19%) because of decrease
in cash letter settlement.
Federal Funds Sold - (increase of 13%) because of excess cash on hand not
invested in securities.
Interest bearing deposits with other banks - (decrease of 42%) because of
maturity.
Investments - (increase of 40%) due to purchase of $70,000,000 GNMA's.
Fed funds purchased and securities sold under agreement to repurchase -
(decrease of 11%) due to decrease of repurchase agreements.
FHLB Advances (increase of 329%) because $70,000,000 borrowed to purchase
GNMA's
Other liabilities - (increase 23%) due to increase in interest payable
and FIT payable.
Other Comprehensive Income - (decrease 934%) - due to FASB 115 on
securities available for sale.
Treasury stock - (increase 5%) due to repurchase of common shares.
CAPITAL RESOURCES
The table below illustrates the Company's subsidiary banks regulatory
capital ratios at March 31, 1999 under the year end 1992 requirements:
(000s)
<TABLE>
<S> <C>
Tier 1 Capital $108,908
Tier 2 Capital 6,733
--------
TOTAL QUALIFYING CAPITAL $115,641
--------
Risk Adjusted Total Assets (including off balance exposures) $608,636
========
Tier 1 Risk-Based Capital Ratio 17.89%
Total Risk-Based Capital Ratio 19.00%
Tier 1 Leverage Ratio 11.56%
</TABLE>
LIQUIDITY
The subsidiaries of the Corporation Static Gap analysis is presented on
pages 11, 12, and 13.
Page 11
<PAGE> 12
<TABLE>
SECURITY NATIONAL "NEXT FOUR QUARTERS"
ASSET/LIABILITY MANAGEMENT
STATIC GAP ANALYSIS (000S)
<CAPTION>
IMMEDIATELY
ADJUSTABLE END OF 6/99 END OF 9/99 END OF 12/99 END OF 3/00
RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE
------- ---- ------- ---- ------- ---- ------- ---- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total Investment Securities 43 5.43% 0 0.00% 35,000 5.87% 9,654 5.64% 75 4.00%
Total Short Term Investment 24,200 4.63% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Net Loans 67,589 8.27% 37,879 8.73% 23,041 8.89% 18,162 8.76% 16,131 8.84%
Total Earning Assets 91,832 7.31% 37,879 8.73% 58,041 7.07% 27,816 7.68% 16,206 8.81%
Total Non-Earning Assets 1,069 9.45% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Assets 92,901 7.33% 37,879 8.73% 58,041 7.07% 27,816 7.68% 16,206 8.81%
Total Noninterest Bearing Deposits 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Interest Bearing Deposits 34,390 4.44% 58,975 4.67% 34,540 4.32% 22,673 3.80% 23,175 4.02%
Total Deposits 34,390 4.44% 58,975 4.67% 34,540 4.32% 22,673 3.80% 23,175 4.02%
Total Other Interest Bearing Liabilities 24,144 3.99% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Other Liabilities 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities 58,534 4.25% 58,975 4.67% 34,540 4.32% 22,673 3.80% 23,175 4.02%
Total Equity Capital 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities and Capital 58,534 4.25% 58,975 4.67% 34,540 4.32% 22,673 3.80% 23,175 4.02%
Interval GAP 34,366 (21,096) 23,501 5,143 (6,969)
Cumulative GAP 34,366 13,271 36,772 41,915 34,946
Interval GAP/Total Assets 5.53% (3.40%) 3.78% 0.83% (1.12%)
Cumulative GAP/Total Assets 5.53% 2.14% 5.92% 6.75% 5.63%
Interval GAP/ Earning Assets 5.69% (3.64%) 4.05% 0.89% (1.20%)
Cumulative GAP/Earning Assets 5.69% 2.05% 6.10% 6.99% 5.79%
Interval Spread: Earning Assets 3.09% 4.07% 2.75% 3.87% 4.79%
Interval Spread: Total Assets 3.08% 4.07% 2.75% 3.87% 4.79%
</TABLE>
Page 12
<PAGE> 13
<TABLE>
THIRD SAVINGS "NEXT FOUR QUARTERS"
ASSET/LIABILITY MANAGEMENT
STATIC GAP ANALYSIS (000S)
<CAPTION>
IMMEDIATELY
ADJUSTABLE END OF 6/99 END OF 9/99 END OF 12/99 END OF 3/00
RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE
------- ---- ------- ---- ------- ---- ------- ---- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total Investment Securities 1,500 6.85% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Short Term Investment 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Net Loans 30,510 8.79% 9,604 8.21% 10,100 8.19% 8,311 7.96% 9,366 7.90%
Total Earning Assets 32,010 8.70% 9,604 8.21% 10,100 8.19% 8,311 7.96% 9,366 7.90%
Total Non-Earning Assets 266 9.44% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Assets 32,276 8.71% 9,604 8.21% 10,100 8.19% 8,311 7.96% 9,366 7.90%
Total Noninterest Bearing Deposits 0 0.00% 3,009 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Interest Bearing Deposits 2,009 4.75% 17,625 5.44% 20,920 5.29% 12,906 5.01% 8,871 4.94%
Total Deposits 2,009 4.75% 20,634 4.65% 20,920 5.29% 12,906 5.01% 8,871 4.94%
Total Other Interest Bearing Liabilities 0 0.00% 5,500 4.96% 0 0.00% 0 0.00% 237 7.40%
Total Other Liabilities 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities 2,009 4.75% 26,134 4.71% 20,920 5.29% 12,906 5.01% 9,108 5.00%
Total Equity Capital 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities and Capital 2,009 4.75% 26,134 4.71% 20,920 5.29% 12,906 5.01% 9,108 5.00%
Interval GAP 30,267 (16,530) (10,820) (4,595) 258
Cumulative GAP 30,267 13,737 2,918 (1,677) (1,420)
Interval GAP/Total Assets 17.17% (9.38%) (6.14%) (2.61%) 0.15%
Cumulative GAP/Total Assets 17.17% 7.79% 1.65% (0.95%) (0.81%)
Interval GAP/Earning Assets 18.96% (8.54%) (6.84%) (2.90%) 0.16%
Cumulative GAP/Earning Assets 18.96% 10.41% 3.58% 0.67% 0.84%
Interval Spread: Earning Assets 3.95% 2.88% 2.90% 2.96% 2.90%
Interval Spread: Total Assets 3.96% 3.50% 2.90% 2.96% 2.90%
</TABLE>
Page 13
<PAGE> 14
<TABLE>
CITIZENS NATIONAL "NEXT FOUR QUARTERS"
ASSET/LIABILITY MANAGEMENT
STATIC GAP ANALYSIS (000S)
<CAPTION>
IMMEDIATELY
ADJUSTABLE END OF 6/99 END OF 9/99 END OF 12/99 END OF 3/00
RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE
------- ---- ------- ---- ------- ---- ------- ---- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total Investment Securities 0 0.00% 6,500 5.75% 3,510 5.97% 1,107 5.03% 4,500 5.84%
Total Short Term Investment 1,950 4.80% 0 0.00% 0 0.00% 500 5.13% 1,060 5.50%
Net Loans 11,504 8.70% 2,386 8.22% 11,990 8.19% 4,148 8.90% 7,778 8.63%
Total Earning Assets 13,454 8.13% 8,886 6.41% 15,500 7.69% 5,755 7.83% 13,338 7.44%
Total Non-Earning Assets 580 8.14% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Assets 14,034 8.13% 8,886 6.41% 15,500 7.69% 5,755 7.83% 13,338 7.44%
Total Noninterest Bearing Deposits 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Interest Bearing Deposits 0 0.00% 34,269 2.78% 9,191 4.90% 6,936 5.17% 33,694 2.99%
Total Deposits 0 0.00% 34,269 2.78% 9,191 4.90% 6,936 5.17% 33,694 2.99%
Total Other Interest Bearing Liabilities 458 4.75% 3,189 4.48% 0 0.00% 0 0.00% 0 0.00%
Total Other Liabilities 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities 458 4.75% 37,458 2.93% 9,191 4.90% 6,936 5.17% 33,694 2.99%
Total Equity Capital 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities and Capital 458 4.75% 37,458 2.93% 9,191 4.90% 6,936 5.17% 33,694 2.99%
Interval GAP 13,576 (28,572) 6,309 (1,181) (20,356)
Cumulative GAP 13,576 (14,996) (8,687) (9,868) (30,224)
Interval GAP/Total Assets 8.48% (17.86%) 3.94% (0.74%) (12.72%)
Cumulative GAP/Total Assets 8.48% (9.37%) (5.43%) (6.17%) (18.89%)
Interval GAP/Earning Assets 8.59% (19.54%) 4.31% (0.81%) (13.92%)
Cumulative GAP/Earning Assets 8.59% (10.96%) (6.64%) (7.45%) (21.37%)
Interval Spread: Earning Assets 3.66% 3.49% 2.79% 2.66% 4.45%
Interval Spread: Total Assets 3.38% 3.49% 2.79% 2.66% 4.45%
</TABLE>
Page 14
<PAGE> 15
SECURITY BANC CORPORATION
PART II - OTHER INFORMATION
ITEM 1 Legal Proceedings Inapplicable
ITEM 2 Changes in Securities Inapplicable
ITEM 3 Defaults upon Senior Securities Inapplicable
ITEM 4 Submission of Matters to a Vote Inapplicable
of Security Holders
ITEM 5 Other Information Inapplicable
ITEM 6 Exhibits and Reports on Form 8-K Financial Data Schedule
as required under Article 9
of Regulation S-X
Page 15
<PAGE> 16
SECURITY BANC CORPORATION
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.
SECURITY BANC CORPORATION
By /s/ Thomas L. Miller
-------------------------------------
Thomas L. Miller
Vice President/Controller
By /s/ J. William Stapleton
-------------------------------------
J. William Stapleton
Executive Vice President/CFO
May 8, 1999
Page 16
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 27,621
<INT-BEARING-DEPOSITS> 1,560
<FED-FUNDS-SOLD> 24,150
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 204,437
<INVESTMENTS-CARRYING> 29,092
<INVESTMENTS-MARKET> 29,030
<LOANS> 626,403
<ALLOWANCE> 6,733
<TOTAL-ASSETS> 956,063
<DEPOSITS> 707,089
<SHORT-TERM> 31,531
<LIABILITIES-OTHER> 5,785
<LONG-TERM> 92,179
0
0
<COMMON> 19,786
<OTHER-SE> 99,693
<TOTAL-LIABILITIES-AND-EQUITY> 956,063
<INTEREST-LOAN> 13,291
<INTEREST-INVEST> 2,801
<INTEREST-OTHER> 536
<INTEREST-TOTAL> 16,628
<INTEREST-DEPOSIT> 5,440
<INTEREST-EXPENSE> 6,496
<INTEREST-INCOME-NET> 10,132
<LOAN-LOSSES> 300
<SECURITIES-GAINS> 20
<EXPENSE-OTHER> 5,791
<INCOME-PRETAX> 6,025
<INCOME-PRE-EXTRAORDINARY> 6,025
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,061
<EPS-PRIMARY> .33
<EPS-DILUTED> .33
<YIELD-ACTUAL> 7.93
<LOANS-NON> 1,915
<LOANS-PAST> 1,726
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 8,489
<ALLOWANCE-OPEN> 6,883
<CHARGE-OFFS> 556
<RECOVERIES> 70
<ALLOWANCE-CLOSE> 6,773
<ALLOWANCE-DOMESTIC> 4,352
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,381
</TABLE>
