<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 June 30, 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 ofregistrant 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 July 14, 1999
- ------------------------------- ----------------------------
Common Stock, $1.5625 Par Value 12,180,450
Page 1
<PAGE> 2
<TABLE>
SECURITY BANC CORPORATION AND SUBSIDIARIES
INDEX
<CAPTION>
PAGE NO.
<S> <C> <C> <C>
Part I - Financial Information
Item 1 - Financial Statements:
Consolidated Condensed Balance Sheets
June 30, 1999 and December 31, l998. 3
Consolidated Condensed Statements of Income
for the three (3) months ended June 30, 1999
and June 30, 1998. 4
Consolidated Condensed Statement of Income for the six (6)
months ended June 30, 1999 and June 30, 1998. 5
Consolidated Condensed Statements of Cash 6
Flows for the six (6) months ended June 30,
1999 and June 30, 1998.
Consolidated Condensed Statements of Shareholders Equity for 7
the six (6) months ended June 30, 1998 and June 30, 1999.
Notes to Consolidated Condensed Financial 8
Statements.
Item 2 - Management's Discussion and Analysis of
Condition and Results of Operations 9-15
Part II - Other Information 16
Signature 17
</TABLE>
Page 2
<PAGE> 3
PART I ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
SECURITY BANC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
June 30 Dec 31
1999 1998
---- ----
(in thousands)
<S> <C> <C>
ASSETS
Cash and due from banks $ 40,549 $ 34,052
Federal funds sold 300 21,350
-------- --------
TOTAL CASH AND CASH EQUIVALENT 40,849 55,402
-------- --------
Interest bearing deposits with other banks 1,560 2,700
Investments (Market Value $224,635 @ 6-30-99,
$167,365 @ 12-31-98) 225,718 167,324
Loans: Commercial and agricultural 300,898 285,958
Real estate and mortgage 257,350 252,609
Consumer 76,615 78,375
-------- --------
TOTAL LOANS 634,863 616,942
Less: Allowance for Loan Losses (6,817) (6,883)
-------- --------
NET LOANS 628,046 610,059
Premises and Equipment 9,149 9,224
Other Assets 42,843 38,791
-------- --------
TOTAL ASSETS $948,165 $883,500
======== ========
LIABILITIES
Non-interest bearing deposits $121,190 $131,285
Interest bearing demand deposits 135,487 148,462
Savings deposits 158,593 154,876
Time deposits, $100,000 and over 42,418 44,794
Other time deposits 218,184 229,436
-------- --------
TOTAL DEPOSITS 675,872 708,853
Fed funds purchased and securities sold
under agreement to repurchase 26,365 28,993
Federal Home Loan Bank Term Advances 121,368 22,816
Other liabilities 5,679 4,709
-------- --------
TOTAL LIABILITIES $829,284 $765,371
-------- --------
SHAREHOLDERS'S EQUITY
Common Stock (Par Value $1.5625) $ 19,796 $ 19,768
Shares authorized 18,000,000
Shares issued 12,669,832 - 1999
Surplus 22,286 22,084
Retained earnings 85,005 79,756
Accumulated other comprehensive income (4,670) (121)
Less: Treasury Stock, 489,382 shares, 1999 (3,536) (3,358)
-------- --------
TOTAL SHAREHOLDERS' EQUITY 118,881 118,129
-------- --------
TOTAL LIABILITIES &
SHAREHOLDER'S EQUITY $948,165 $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
June 30 June 30
1999 1998
---- ----
(in thousands except
per share data)
<S> <C> <C>
Interest Income $17,155 $16,029
Interest Expense 6,729 6,052
------- -------
NET INTEREST INCOME 10,426 9,977
Provision for loan losses 300 200
------- -------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 10,126 9,777
OTHER OPERATING INCOME
Trust Income 467 426
Service charges on deposit accounts 793 801
Securities, Gains (Losses) 21 42
Other charges, rents and fees 763 763
------- -------
TOTAL OTHER OPERATING INCOME 2,044 2,032
OPERATING EXPENSES
Salaries and employee benefits 2,884 2,814
Equipment and occupancy expense 663 675
Other operating expense 2,151 2,231
------- -------
TOTAL OPERATING EXPENSE 5,698 5,720
INCOME BEFORE TAXES 6,472 6,089
Income taxes (See Note B) 2,119 2,086
------- -------
NET INCOME $ 4,353 $ 4,003
======= =======
Basic earnings per share $ .36 $ .33
Diluted earnings per share $ .36 $ .33
Cash dividends per share $ .13 $ .12
Weighted average shares outstanding 12,177,121 12,138,413
</TABLE>
See notes to Consolidated Condensed Financial Statements.
Page 4
<PAGE> 5
PART 1 ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
SECURITY BANC CORPORATION
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(UNAUDITED)
<CAPTION>
Six Months Ended
June 30 June 30
1999 1998
---- ----
(in thousands except
per share data)
<S> <C> <C>
Interest Income $33,783 $31,722
Interest Expense 13,225 12,034
------- -------
NET INTEREST INCOME 20,558 19,688
Provision for loan losses 600 400
------- -------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 19,958 19,288
OTHER OPERATING INCOME
Trust Income 938 786
Service charges on deposit accounts 1,551 1,559
Securities, Gains (Losses) 41 86
Other charges, rents and fees 1,498 1,475
------- -------
TOTAL OTHER OPERATING INCOME 4,028 3,906
OPERATING EXPENSES
Salaries and employee benefits 5,789 5,599
Equipment and occupancy expense 1,333 1,339
Other operating expense 4,367 4,525
------- -------
TOTAL OPERATING EXPENSE 11,489 11,463
INCOME BEFORE TAXES 12,497 11,731
Income taxes (See Note B) 4,083 4,010
------- -------
NET INCOME $ 8,414 $ 7,721
======= =======
Basic earnings per share $ .69 $ .64
Diluted earnings per share $ .69 $ .63
Cash dividends per share $ .26 $ .225
Weighted average shares outstanding 12,174,143 12,135,100
</TABLE>
See notes to Consolidated Condensed Financial Statements.
Page 5
<PAGE> 6
PART 1 ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
SECURITY BANC CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<CAPTION>
June 30 June 30
1999 1998
---- ----
(IN THOUSANDS)
--------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 8,414 $ 7,721
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 558 537
(Gain)/Loss on sale of the following:
Investment Securities available for sale (41) (86)
Other Assets (13) (15)
Provision for loan losses 600 400
Amortization and accretion, net (89) (229)
Amortization and core deposit intangible 335 337
Change in other operating assets and liabilities, net (10,205) (13,384)
-------- --------
Total Adjustments (8,855) (12,440)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ (441) $ (4,719)
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 15,721 11,286
Proceeds from maturities of Investments held to maturity 1,698 8,284
Purchase of:
Investment securities available for sale (81,264) (6,919)
Investment securities held to maturity (1,425) (1,500)
Increase in loans (19,383) (25,115)
Proceeds from sale of other assets 10,042 11,978
Capital expenditures (466) (944)
Purchase of Insurance Policies (6) (7)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (73,943) (2,937)
Cash Flows from Financing Activities:
Net (decrease) increase in demand deposits, NOW accounts and
savings accounts (19,354) 13,432
Net decrease in certificates of deposit (13,627) (3,238)
Net increase (decrease) in short-term borrowed funds 10,925 (14,282)
Net Increase in other borrowed money 85,000 0
Net purchase and sale of treasury stock (178) 0
Dividends paid (3,165) (2,731)
Proceeds from exercise of stock options 230 118
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 59,831 (6,701)
Net decrease in cash and cash equivalents (14,553) (14,357)
Cash and cash equivalents at beginning of year 55,402 85,698
-------- --------
Cash and cash equivalents at June 30 $ 40,849 $ 71,341
</TABLE>
See Notes to Consolidated Financial Statements.
Page 6
<PAGE> 7
<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 7,721 7,721
Other comprehensive income:
Net unrealized gains on securities available for sale
net of income taxes of $2 (3) (3)
------
Total comprehensive income 7,718
======
Cash dividends on common shares ($.225 per share) (2,731)
Exercise of stock options 15 103
==================================================================================================================================
BALANCE AT June 30, 1998 19,722 21,934 75,139 (3,193) 239
==================================================================================================================================
BALANCE AT DECEMBER 31, 1998 19,768 22,084 79,756 (3,358) (121)
Net Income 8,414 8,414
Other comprehensive income:
Net unrealized (losses) on securities available for sale
net of income taxes of $2,449 (4,549) (4,549)
------
Total comprehensive income 3,865
======
Cash dividends on Common Shares ($.26 per share) (3,165)
Exercise of stock options 28 202
Purchase of treasury stock (178)
==================================================================================================================================
BALANCE AT June 30, 1999 19,796 22,286 85,005 (3,536) (4,670)
==================================================================================================================================
</TABLE>
See Notes to Consolidated Financial Statements (Unaudited)
Page 7
<PAGE> 8
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 June 30, 1999 and
the results of operations and cash flows for the six month periods ended June
30, 1999 and June 30, 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 $26,854,000 invested in tax exempt
municipal securities.
Page 8
<PAGE> 9
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 economy continues its strong performance. GDP is solid at an annualized 4.3%
while inflation remains low at 2% and unemployment stable at 4%. Most forecasts
call for continued prosperity through the next twelve months.
The driving force of the economy continues to be consumer spending. Consumer
confidence reached a new cyclical peak in June. While consumers are less bullish
on the current situation, the expectations for the next six months are good.
Confidence is bolstered by the strong job market, the strength of the stock
market and low inflation.
Consumer consumption is leading to two negative trends, increasing debt load and
decreasing savings levels. Household debt is expanding at a double digit pace,
the fastest since the late 1980s. Debt service ratios continue to climb as
consumers leverage their assets. The reduction in savings levels indicates that
consumers will not be in a position to maintain debt service in the event of
worsening economic conditions.
The Federal Reserve is intent on controlling economic growth, inflation, and
consumer spending. Recently, rates were increased by 25 basis points in an
effort to dampen activity; additional moves during the second half of 1999 are
anticipated.
Locally, the economy continues to follow the national trend. Numerous companies
continue to expand, unemployment is low, and year-to-date earnings remain stable
for most businesses.
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 70%* September 30, 1999
</TABLE>
Page 9
<PAGE> 10
The Year 2000 Committee is working with significant customers, vendors, and
business counterparts 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 August 1, 1999.
RESULTS OF OPERATIONS
Net income was $8,414,000 for the first six months of 1999 compared to
$7,721,000 for the same period of 1998. Basic earnings per share were $.69 for
the first six months, a 7% increase over last year's $.64. Diluted earnings per
share were $.69 for the first six months, a 10% increase over last year's $.63.
Total assets were $948,165,000 at June 30, 1999 compared to 1998's assets of
$838,892,000. For the first six months of 1999, return on average equity was
14.03% and return on average assets was 1.79%.
Interest and fees on loans increased to $26,813, 000 for the six months ended
June 30, 1999 compared to $26,038,000 for the six months ending June 30, 1998.
Average loans were $626,227,000 and $570,475,000 at June 30, 1999 and 1998
respectively, a 10% increase.
Income from securities increased to $6,324,000 from $4,151,000 for the six
months ended June 30, 1999 and 1998 respectively. The average outstanding for
securities were $210,634,000 and $141,996,000 at June 30, 1999 and 1998
respectively, a 48% increase.
Interest income from Fed Funds sold and other interest bearing assets decreased
to $646,000 at June 30, 1999 compared to $1,534,000 for the six months ended
June 30, 1999. The average outstanding for Fed Funds and interest bearing
deposits were $25,931,000 and $54,346,000 at June 30, 1999 and 1998
respectively, a 52% decrease.
Interest bearing liabilities average outstanding at June 30, 1999 were
$812,910,000 compared to $717,480,000 at June 30, 1998. Interest expense
increased to $13,225,000 at June 30, 1999 from $12,034,000 at June 30, 1998 a
10% increase.
Net interest income on a fully taxable equivalent basis for the first six months
of 1999 was $20,912,000 compared to the $19,878,000 realized in the same period
of 1998.
Market value per share was $34.50 at June 30, 1999 as compared to $30.50 at June
30, 1998. Book value per share was $9.76 at June 30, 1999 and $9.38 at June 30,
1998. The efficiency ratio was 45% and 47% respectively for June 30, 1999 and
June 30, 1998.
Page 10
<PAGE> 11
PART 1 ITEM 2 (CONT'D.)
<TABLE>
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
<CAPTION>
For Period Ending June 30
1999 (000's) 1998
---- ----
<S> <C> <C>
Balance at beginning of period $6,883 $6,254
Charge-offs:
Domestic:
Commercial, financial and agriculture (333) (26)
Real estate -- construction
Real estate - mortgage (0) (284)
Installment loans to individuals (524) (453)
Lease financing 0 0
------ ------
(857) (763)
Recoveries:
Domestic:
Commercial, financial and agriculture 21 822
Real estate -- construction 0 0
Real estate -- mortgage 7 50
Installment loans to individuals 126 154
Lease financing 0 0
------ ------
154 1026
Net charge-offs (703) 263
Other adjustments 37 0
Additions charged to operations 600 400
------ ------
Balance at end of period $6,817 $6,917
Ratio of net charge-offs during the period of average loans
outstanding during the period. (.11%) .05%
</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
June 30, ----------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Non-accrual loans $2,477 $2,477 $3,417 $4,123 $2,772
Accruing loans past due
90 days or more 2,077 1,077 1,537 1,709 1,543
Restructured loans 317 317 333 0 0
Other real estate owned 1,722 1,772 258 256 0
</TABLE>
Total other operating income was $4,028,000 and $3,906,000 during the first six
months of 1999 and 1998 respectively. Trust income increased 19%. There was a 1%
decrease in service charges on deposits, and a 2% increase in other charges,
rents and fees. Total securities gains for the first six months of 1999 were
$41,000 or $27,000 after tax. Total securities gains for the same period of 1998
were $86,000 or $56,000 after tax.
Page 11
<PAGE> 12
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 $26,000 during the first six months, .23%
over the similar period of 1998. Salaries, wages and employee benefits increased
3% over 1998. Equipment and net occupancy expenses during the first six months
were $1,333,000 and $1,339,000 for 1999 and 1998 respectively, which reflects a
.45% decrease. Other operating expenses decreased $158,000 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 - (increase of 19%) because of anticipated cash
demand.
Federal Funds Sold - (decrease of 99%) because of loan demand and
investing in securities.
Interest bearing deposits with other banks - (decrease of 42%) because of
maturity.
Investments - (increase of 35%) due to purchase of $70,000,000 GNMA's.
Fed funds purchased and securities sold under agreement to repurchase -
(decrease of 9%) due to decrease of repurchase agreements.
FHLB Advances (increase of 432%) because $70,000,000 borrowed to purchase
GNMA's
Other liabilities - (increase 21%) due to increase in interest payable
and FIT payable.
Other Comprehensive Income - (decrease 3,760%) - 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 June 30, 1999 under the year end 1992 requirements:
(000s)
<TABLE>
<S> <C>
Tier 1 Capital $111,896
Tier 2 Capital 6,817
--------
TOTAL QUALIFYING CAPITAL $118,713
--------
Risk Adjusted Total Assets (including off balance exposures) $629,345
========
Tier 1 Risk-Based Capital Ratio 17.78%
Total Risk-Based Capital Ratio 18.86%
Tier 1 Leverage Ratio 11.87%
</TABLE>
LIQUIDITY
The subsidiaries of the Corporation Static Gap analysis is presented on
pages 13, 14, and 15.
Page 12
<PAGE> 13
<TABLE>
THIRD SAVINGS "NEXT FOUR QUARTERS"
ASSET/LIABILITY MANAGEMENT
STATIC GAP ANALYSIS (000s)
<CAPTION>
IMMEDIATELY ADJUSTABLE END 0F 9/99 END OF 12/99 END OF 3/00 END OF 6/00
RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE
------- ---- ------- ---- ------- ---- ------- ---- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total Investment Securities 1,867 6.89% 0 0.00% 0 0.00% 0 0.00% 380 6.66%
Total Short Term Investment 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Net Loans 32,282 8.74% 5,430 8.46% 9,900 7.78% 8,311 8.01% 9,830 7.99%
Total Earning Assets 34,149 8.64% 5,430 8.46% 9,900 7.78% 8,311 8.01% 10,210 7.94%
Total Non-Earning Assets 214 9.48% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Assets 34,363 8.65% 5,430 8.46% 9,900 7.78% 8,311 8.01% 10,210 7.94%
Total Noninterest Bearing Deposits 0 0.00% 3,378 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Interest Bearing Deposits 1,918 4.75% 25,073 4.92% 17,327 4.51% 11,767 4.34% 11,541 4.17%
Total Deposits 1,918 4.75% 28,451 4.33% 17,327 4.51% 11,767 4.34% 11,541 4.17%
Total Other Interest Bearing Liabilities 0 0.00% 9,000 4.96% 0 0.00% 234 7.40% 337 7.40%
Total Other Liabilities 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities 1,918 4.75% 37,451 4.48% 17,327 4.51% 12,001 4.40% 11,878 4.27%
Total Equity Capital 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities and Capital 1,918 4.75% 37,451 4.48% 17,327 4.51% 12,001 4.40% 11,878 4.27%
Interval GAP 32,446 (32,021) (7,427) (13,689) (1,668)
Cumulative GAP 32,446 424 (7,003) (10,693) (12,361)
Interval GAP/Total Assets 17.83% (17.60%) (4.08%) (2.03%) (0.92%)
Cumulative GAP/Total Assets 17.83% 0.23% (3.85%) (5.88%) (6.79%)
Interval GAP/Earning Assets 19.71% (17.51%) (4.54%) (2.26%) (1.02%)
Cumulative GAP/Earning Assets 19.71% 2.19% (2.35%) (4.60%) (5.62%)
Interval Spread: Earning Assets 3.89% 3.54% 3.27% 3.61% 3.68%
Interval Spread: Total Assets 3.90% 3.98% 3.27% 3.61% 3.68%
</TABLE>
Page 13
<PAGE> 14
<TABLE>
CITIZENS NATIONAL "NEXT FOUR QUARTERS"
ASSET/LIABILITY MANAGEMENT
STATIC GAP ANALYSIS (000s)
<CAPTION>
IMMEDIATELY ADJUSTABLE END 0F 9/99 END OF 12/99 END OF 3/00 END OF 6/00
RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE
------- ---- ------- ---- ------- ---- ------- ---- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total Investment Securities 5,500 5.72% 3,510 5.97% 1,107 5.03% 3,500 5.81% 25 7.13%
Total Short Term Investment 0 0.00% 0 0.00% 500 5.13% 1,060 5.50% 0 0.00%
Net Loans 18,377 8.74% 6,176 8.32% 6,085 8.72% 7,023 7.77% 1,934 8.46%
Total Earning Assets 23,877 8.04% 9,686 7.47% 7,692 7.95% 11,583 6.97% 1,959 8.44%
Total Non-Earning Assets 1,251 9.46% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Assets 25,128 8.11% 9,686 7.47% 7,692 7.95% 11,583 6.97% 1,959 8.44%
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% 36,205 3.01% 8,932 4.84% 6,865 4.90% 34,122 3.25%
Total Deposits 0 0.00% 36,205 3.01% 8,932 4.84% 6,865 4.90% 34,122 3.25%
Total Other Interest Bearing Liabilities 1,320 5.45% 315 3.96% 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 1,320 5.45% 36,519 3.02% 8,932 4.84% 6,865 4.90% 34,122 3.25%
Total Equity Capital 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities and Capital 1,320 5.45% 36,519 3.02% 8,932 4.84% 6,865 4.90% 34,122 3.25%
Interval GAP 23,808 (26,833) (1,240) 4,718 (32,163)
Cumulative GAP 23,808 (3,025) (4,265) 453 (31,710)
Interval GAP/Total Assets 14.75% (16.62%) (0.77%) 2.92% (19.92%)
Cumulative GAP/Total Assets 14.75% (1.87%) (2.64%) 0.28% (19.64%)
Interval GAP/Earning Assets 15.67% (18.68%) (0.86%) 3.28% (22.39%)
Cumulative GAP/Earning Assets 15.67% (3.00%) (3.86%) (0.58%) (22.97%)
Interval Spread: Earning Assets 2.60% 4.45% 3.11% 2.07% 5.19%
Interval Spread: Total Assets 2.66% 4.45% 3.11% 2.07% 5.19%
</TABLE>
Page 14
<PAGE> 15
<TABLE>
SECURITY NATIONAL "NEXT FOUR QUARTERS"
ASSET/LIABILITY MANAGEMENT
STATIC GAP ANALYSIS (000s)
<CAPTION>
IMMEDIATELY ADJUSTABLE END 0F 9/99 END OF 12/99 END OF 3/00 END OF 6/00
RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE
------- ---- ------- ---- ------- ---- ------- ---- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total Investment Securities 38 5.43% 1,500 6.74% 1,775 6.30% 1,575 6.61% 1,500 6.74%
Total Short Term Investment 300 4.54% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Net Loans 67,908 8.47% 35,826 8.80% 19,158 8.86% 16,103 8.94% 19,748 8.50%
Total Earning Assets 68,246 8.45% 37,326 8.71% 20,933 8.64% 17,678 8.74% 21,248 8.38%
Total Non-Earning Assets 1,012 9.37% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Assets 69,257 8.46% 37,326 8.71% 20,933 8.64% 17,678 8.74% 21,248 8.38%
Total Noninterest Bearing Deposits 0 0.00% 0 0.00% 0 0.00% 0 0.00% 8,900 0.00%
Total Interest Bearing Deposits 4,680 3.52% 74,777 3.51% 40,781 3.87% 19,712 4.78% 21,404 4.72%
Total Deposits 4,680 3.52% 74,777 3.51% 40,781 3.87% 19,712 4.78% 30,304 3.34%
Total Other Interest Bearing Liabilities 24,730 4.30% 0 0.00% 0 0.00% 15,000 5.35% 0 0.00%
Total Other Liabilities 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities 29,411 4.17% 74,777 3.51% 40,781 3.87% 34,712 5.03% 30,304 3.34%
Total Equity Capital 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities and Capital 29,411 4.17% 74,777 3.51% 40,781 3.87% 34,712 5.03% 30,304 3.34%
Interval GAP 39,847 (37,451) (19,848) (17,034) (9,056)
Cumulative GAP 39,847 2,396 (17,453) (34,486) (43,542)
Interval GAP/Total Assets 6.59% (6.20%) (3.28%) (2.82%) (1.50%)
Cumulative GAP/Total Assets 6.59% 0.40% (2.89%) (5.71%) (7.21%)
Interval GAP/ Earning Assets 7.04% (6.79%) (3.60%) (3.09%) (0.03%)
Cumulative GAP/Earning Assets 7.04% 0.25% (3.35%) (6.44%) (6.47%)
Interval Spread: Earning Assets 4.26% 5.20% 4.77% 3.71% 3.66%
Interval Spread: Total Assets 4.29% 5.20% 4.77% 3.71% 5.04%
</TABLE>
Page 15
<PAGE> 16
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 of Security Holders Inapplicable
The annual meeting of Shareholders of Security Banc Corporation was held in
Springfield, Ohio on April 20, 1999.
Four Directors of Class II were elected to serve until the Annual Meeting of
Shareholders of 2002.
ITEM 5 Other Information Inapplicable
ITEM 6. Exhibits and Reports on Form 8-K 27 - Financial Data Schedule as
required under Article 9 of
Regulation S-X No reports on
Form 8K have been filed during
the quarter for which this
report is filed.
Page 16
<PAGE> 17
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
August 9, 1999
Page 17
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 40,549
<INT-BEARING-DEPOSITS> 1,560
<FED-FUNDS-SOLD> 300
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 196,833
<INVESTMENTS-CARRYING> 26,885
<INVESTMENTS-MARKET> 27,802
<LOANS> 634,863
<ALLOWANCE> 6,817
<TOTAL-ASSETS> 948,165
<DEPOSITS> 675,872
<SHORT-TERM> 50,933
<LIABILITIES-OTHER> 5,679
<LONG-TERM> 96,800
0
0
<COMMON> 19,796
<OTHER-SE> 99,085
<TOTAL-LIABILITIES-AND-EQUITY> 948,165
<INTEREST-LOAN> 26,813
<INTEREST-INVEST> 6,324
<INTEREST-OTHER> 646
<INTEREST-TOTAL> 33,783
<INTEREST-DEPOSIT> 10,622
<INTEREST-EXPENSE> 13,225
<INTEREST-INCOME-NET> 20,558
<LOAN-LOSSES> 600
<SECURITIES-GAINS> 41
<EXPENSE-OTHER> 11,489
<INCOME-PRETAX> 12,497
<INCOME-PRE-EXTRAORDINARY> 12,497
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,414
<EPS-BASIC> .69
<EPS-DILUTED> .69
<YIELD-ACTUAL> 7.95
<LOANS-NON> 2,477
<LOANS-PAST> 2,077
<LOANS-TROUBLED> 317
<LOANS-PROBLEM> 5,930
<ALLOWANCE-OPEN> 6,883
<CHARGE-OFFS> 857
<RECOVERIES> 154
<ALLOWANCE-CLOSE> 6,817
<ALLOWANCE-DOMESTIC> 4,215
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,602
</TABLE>
