FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
___________________
For Quarter Ended March 31, 2000 Commission file number: 2-96350
CNB Corporation
(Exact name of registrant as specified in its charter)
South Carolina 57-0792402
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 320, Conway, South Carolina 29528
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code): (843) 248-5721
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 .
The number of shares outstanding of the issuer's $10.00 par value common stock
as of March 31, 2000 was 596,494.
<PAGE>
CNB Corporation
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets as of March 31, 2000, 1
December 31, 1999 and March 31, 1999
Consolidated Statement of Income for the Three Months 2
Ended March 31, 2000 and 1999
Consolidated Statement of Comprehensive Income 3
for the Three Months Ended March 31, 2000 and 1999
Consolidated Statement of Changes in Stockholders' 4
Equity for the Three Months Ended March 31, 2000
and 1999
Consolidated Statement of Cash Flows for the Three Months 5
Ended March 31, 2000 and 1999
Notes to Consolidated Financial Statements 6-13
Item 2. Management's Discussion and Analysis of Financial 14-21
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 22
SIGNATURE 23
<PAGE>
CNB Corporation and Subsidiary
Consolidated Balance Sheets
(All Dollar Amounts, Except Per Share Data, in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31, March 31,
2000 1999 1999
ASSETS:
<S> <C> <C> <C>
Cash and due from banks $ 18,237 $ 20,259 $ 16,086
Interest bearing deposits with banks 0 0 0
Investment Securities 49,912 54,868 58,876
(Fair values of $49,283 at
March 31, 2000, $54,430 at
December 31, 1999, and $59,715
at March 31, 1999)
Securities Available for Sale 89,614 89,151 82,973
(Amortized cost of $91,650 at
March 31, 2000, $90,834 at
December 31, 1999, and $82,937
at March 31, 1999)
Federal Funds sold and securities
purchased under agreement
to resell 8,650 11,150 37,175
Loans:
Gross Loans 276,054 267,416 239,609
Less unearned income (188) (275) (811)
Loans, net of unearned income 275,866 267,141 238,798
Less reserve for possible
loan losses 3,675 (3,451) (3,199)
Net loans 272,191 263,690 235,599
Bank premises and equipment 8,905 8,504 7,326
Other assets 8,752 8,080 7,149
Total assets 456,261 455,702 445,184
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits:
Non-interest bearing 79,187 72,728 74,496
Interest-bearing 298,614 302,775 292,610
Total deposits 377,801 375,503 367,106
Federal funds purchased and
securities sold under agreement
to repurchase 28,195 27,477 32,257
Other short-term borrowings 1,608 3,809 1,131
Other liabilities 3,531 5,201 2,394
Total liabilities 411,135 411,990 402,888
Stockholders' equity:
Common stock, par value $10 per
share: Authorized 1,500,000 in
2000 and 1999; issued 598,681
1n 2000 and 1999 5,987 5,987 5,987
Surplus 24,556 24,546 24,545
Undivided Profits 16,033 14,467 11,876
Net Unrealized Holding (1,221) (1,011) 22
Gains (Losses) on
Available-For-Sale Securities
Less: Treasury stock (229) (277) (134)
Total stockholders' equity 45,126 43,712 42,296
Total liabilities
and stockholders' equity 456,261 455,702 445,184
</TABLE>
1
<PAGE>
CNB Corporation and Subsidiary
Consolidated Statement of Income
(All Dollar Amounts, Except Per Share Data, in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
Interest Income:
<S> <C> <C>
Interest and fees on loans $ 6,133 $ 5,097
Interest on investment securities:
Taxable investment securities 1,865 1,929
Tax-exempt investment securities 193 180
Other securities 0 0
Interest on federal funds sold and securities
purchased under agreement to resell 110 282
Total interest income 8,301 7,488
Interest Expense:
Interest on deposits 3,065 2,809
Interest on federal funds purchased and securities
sold under agreement to repurchase 329 337
Interest on other short-term borrowings 26 14
Total interest expense 3,420 3,160
Net interest income 4,881 4,328
Provision for possible loan losses 240 150
Net interest income after provision for possible
loan losses 4,641 4,178
Other income:
Service charges on deposit accounts 683 612
Gains/(Losses) on securities 0 0
Other operating income 344 294
Total other income 1,027 906
Other expenses:
Salaries and employee benefits 2,031 1,843
Occupancy expense 451 389
Other operating expenses 850 730
Total operating expenses 3,332 2,962
Income before income taxes 2,336 2,122
Income tax provision 771 694
Net Income 1,565 1,428
Per share data:
Net income per weighted average shares outstanding $ 2.62 $ 2.39
Cash dividend paid per share $ 0 $ 0
Book value per actual number of shares outstanding $ 75.65 $ 70.81
Weighted average number of shares outstanding 596,588 597,180
Actual number of shares outstanding 596,494 597,321
</TABLE>
2
<PAGE>
CNB Corporation and Subsidiary
Consolidated Statements of Comprehensive Income
(All Dollar Amounts, Except Per Share Data, in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended
March 31,
2000 1999
<S> <C> <C>
Net Income $1,565 $1,428
Other comprehensive income, net of tax
Unrealized gains/(losses)
on securities:
Unrealized holding gains/(losses) (210) (403)
during period
Net Comprehensive Income $1,355 $1,025
</TABLE>
3
<PAGE>
CNB Corporation and Subsidiary
Consolidated Statement of Changes in Stockholders' Equity
(All Dollar Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
<S> <C> <C>
Common Stock:
($10 par value; 1,500,000 shares authorized)
Balance, January 1 5,987 5,987
Issuance of Common Stock None None
Balance at end of period 5,987 5,987
Surplus:
Balance, January 1 24,546 24,538
Issuance of Common Stock None None
Gain on sale of treasury stock 10 7
Balance at end of period 24,556 24,545
Undivided profits:
Balance, January 1 14,467 10,448
Net Income 1,565 1,428
Cash dividends declared None None
Balance at end of period 16,033 11,876
Net unrealized holding gains/(losses) on
Available-for-sale securities:
Balance, January 1 (1,011) 425
Change in net unrealized gains/(Losses) (210) (403)
Balance at end of period (1,221) 22
Treasury stock:
Balance, January 1
(2,722 shares in 2000; 2,066 shares in 1999) (277) (197)
Purchase of treasury stock (46) (63)
Reissue of treasury stock 94 126
Balance at end of period
(2,187 shares in 2000; 1,360 shares in 1999) (229) (134)
Total stockholders' equity 45,126 42,296
</TABLE>
Note: Columns may not add due to rounding
4
<PAGE>
CNB CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the three-month period ended March 31,
2000 1999
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 1,565 $ 1,428
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation 131 131
Provision for loan losses 240 150
Provision for deferred income taxes (291) (656)
Loss (gain) on sale of investment
securities 0 0
(Increase) decrease in accrued interest
receivable (346) (135)
(Increase) decrease in other assets (35) (65)
(Decrease) increase in other liabilities 249 (695)
Net cash provided by operating
activities 1,513 158
INVESTING ACTIVITIES
Proceeds from sale of investment securities
available for sale 0 0
Proceeds from maturities of investment
securities held to maturity 4,956 2,642
Proceeds from maturities of investment
securities available for sale 1,000 5,609
Purchase of investment securities held to
Maturity 0 (870)
Purchase of investment securities
available for sale (1,463) (8,000)
Decrease (increase) in interest-bearing
deposits in banks 0 0
(Increase) decrease in federal funds sold 2,500 (10,075)
(Increase) decrease in loans (8,725) (9,669)
Premises and equipment expenditures (532) (199)
Net cash provided by (used for)
investing activities (2,264) (20,562)
FINANCING ACTIVITIES
Dividends paid (2,086) (2,090)
Increase (Decrease) in deposits 2,298 20,994
(Decrease) increase in securities sold
under repurchase agreement 718 (261)
(Decrease) increase in other
short-term borrowings (2,201) (17)
Net cash provided by (used for)
financing activities (1,271) 18,626
Net increase (decrease) in cash
and due from banks (2,022) (1,778)
CASH AND DUE FROM BANKS, BEGINNING OF YEAR 20,259 17,864
CASH AND DUE FROM BANKS, MARCH 31, 2000 AND 1999 $18,237 $ 16,086
CASH PAID (RECEIVED) FOR:
Interest $ 3,808 $ 3,545
Income taxes $ 29 $ 530
</TABLE> 5
<PAGE>
CNB CORPORATION AND SUBSIDIARY (The "Corporation")
CNB CORPORATION (The "Parent")
THE CONWAY NATIONAL BANK (The "Bank")
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All Dollar Amounts in Thousands)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Net income per share - Net income per share is computed on the basis of the
weighted average number of common shares outstanding, 596,588 for the
three-month period ended March 31, 2000 and 597,180 for the three-month period
ended March 31, 1999.
NOTE 2 - RESTRICTIONS ON CASH AND DUE FROM BANKS
The Bank is required to maintain average reserve balances either at the Bank or
on deposit with the Federal Reserve Bank. The average amount of these reserve
balances for the three-month period ended March 31, 2000 and for the years ended
December 31, 1999 and 1998 were approximately $8,517, $8,300, and $6,839,
respectively.
6
<PAGE>
NOTE 3 - INVESTMENT SECURITIES
Investment securities with a par value of approximately $79,205 at March 31,
2000 and $82,325 at December 31, 1999 were pledged to secure public deposits and
for other purposes required by law.
The following summaries reflect the book value, unrealized gains and losses,
approximate market value, and tax-equivalent yields of investment securities at
March 31, 1999 and at December 31, 1999.
<TABLE>
<CAPTION>
March 31, 2000
Book Unrealized Holding Fair
Value Gains Losses Value Yield(1)
<S> <C> <C> <C> <C> <C>
AVAILABLE FOR SALE
United States Treasury
Within one year $ 4,988 $ 4 $ 12 $ 4,980 6.38%
One to five years 11,104 - 184 10,920 6.05
16,092 4 196 15,900 6.15
Federal agencies
Within one year 16,437 2 76 16,363 5.92
One to five years 55,723 - 1,758 53,965 5.78
72,160 2 1,834 70,328 5.81
State, county and
municipal
One to five years 260 - 1 259 6.81
Six to ten years 1,132 - 9 1,123 6.96
After ten years 612 - 2 610 7.57
2,004 - 12 1,992 7.13
Other Securities(Equity) 1,394 - - 1,394 -
Total available for sale $91,650 $ 6 $2,042 $89,614 5.90%
HELD TO MATURITY
United States Treasury
Within one year 1,010 - 19 991 5.76
1,010 - 19 991 5.76
Federal agencies
Within one year 10,592 2 36 10,558 6.27
One to five years 24,184 6 451 23,739 6.38
34,776 8 487 34,297 6.35
State, county and
municipal
Within one year 1,660 13 - 1,673 8.19%
One to five years 7,920 23 76 7,867 6.40
Six to ten years 4,387 12 93 4,306 6.57
After ten years 159 - 10 149 6.09
14,126 48 179 13,995 6.66
Total held to maturity $49,912 $ 56 $ 685 $49,283 6.42%
</TABLE>
(1) Tax equivalent adjustment based on a 34% tax rate
As of the quarter ended March 31, 2000, the Bank did not hold any securities of
an issuer that exceeded 10% of stockholders' equity. The net unrealized holding
gains/(losses) on available-for-sale securities component of capital is $(1,221)
as of March 31, 2000.
7
<PAGE>
NOTE 3 - INVESTMENT SECURITIES (Continued)
<TABLE>
<CAPTION>
December 31, 1999
Book Unrealized Fair
Value Gains Losses Value Yield(1)
<S> <C> <C> <C> <C> <C>
AVAILABLE FOR SALE
United States Treasury
Within one year $ 4,984 $ 11 $ 10 $ 4,985 6.38%
One to five years 10,117 - 114 10,003 5.99%
15,101 11 124 14,988 6.12%
Federal agencies
Within one year 11,461 - 38 11,423 5.96%
One to five years 61,746 5 1,533 60,218 5.79%
73,207 5 1,571 71,641 5.82%
State, county and
municipal
Six to ten years 1,132 1 5 1,128 6.96%
Other - restricted
Federal Reserve
Bank and FHLB Stock 1,394 - - 1,394 6.96%
Total available for sale $90,834 $ 17 $ 1,700 $89,151 5.80%
HELD TO MATURITY
United States Treasury
Within one year 3,000 5 - 3,005 6.54%
One to five years 1,012 - 14 998 5.76%
4,012 5 14 4,003 6.35%
Federal agencies
Within one year 7,613 - 11 7,602 6.30%
One to five years 28,188 25 368 27,845 6.36%
35,801 25 379 35,447 6.35%
State, county and
municipal
Within one year 1,759 12 - 1,771 8.60%
One to five years 8,342 42 49 8,335 6.50%
Six to ten years 4,315 17 78 4,254 6.69%
After ten years 639 1 20 620 5.56%
15,055 72 147 14,980 6.76%
Total held to maturity $54,868 $ 102 $ 540 $54,430 6.46%
</TABLE>
(1) Tax equivalent adjustment based on a 34% tax rate
As of the quarter ended December 31, 1999, the Bank did not hold any securities
of an issuer that exceeded 10% of stockholders' equity. The net unrealized
holding gains/(losses) on available-for-sale securities component of capital is
$(1,011) as of December 31, 1999.
8
<PAGE>
NOTE 4 - LOANS AND ALLOWANCE FOR LOAN LOSSES
The following is a summary of loans at March 31, 2000 and December 31, 1999
by major classification:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
<S> <C> <C>
Real estate loans - mortgage $ 170,230 $ 163,614
- construction 20,973 21,013
Commercial and industrial loans 47,294 45,742
Loans to individuals for household,
family and other consumer expenditures 34,271 33,864
Agriculture 1,666 1,447
All other loans, including overdrafts 1,620 1,736
Gross loans 276,054 267,416
Less unearned income (188) (275)
Less reserve for loan losses (3,675) (3,451)
Net loans 272,191 263,690
</TABLE>
9
<PAGE>
NOTE 4 - LOANS AND ALLOWANCE FOR LOAN LOSSES, continued
Changes in the reserve for loan losses for the quarter ended March 31, 2000
and 1999 and the year ended December 31, 1999 are summarized as follows:
<TABLE>
<CAPTION>
Quarter Ended
March 31, December 31,
2000 1999 1999
<S> <C> <C> <C>
Balance, beginning of period $ 3,451 $ 3,132 $ 3,132
Charge-offs:
Commercial, financial, and agricultural 14 23 254
Real Estate - construction and mortgage 2 0 3
Loans to individuals 79 143 559
Total charge-offs $ 95 $ 166 $ 816
Recoveries:
Commercial, financial, and agricultural $ 18 $ 34 $ 103
Real Estate - construction and mortgage 10 0 21
Loans to individuals 51 49 216
Total recoveries $ 79 $ 83 $ 340
Net charge-offs/(recoveries) $ 16 $ 83 $ 476
Additions charge to operations $ 240 $ 150 $ 795
Balance, end of period $ 3,675 $ 3,199 $ 3,451
Ratio of net charge-offs during the period
to average loans outstanding during the
period .02% .04% .19%
</TABLE>
The entire balance is available to absorb future loan losses.
At March 31, 2000 and December 31, 1999 loans on which no interest was being
accrued totalled approximately $365 and $527, respectively; foreclosed real
estate totalled $0 and $0, respectively; and loans 90 days past due and still
accruing totalled $157 and $142, respectively.
OTHER INTEREST-BEARING ASSETS
The Bank maintained an investment in an executive life insurance program through
Confederation Life Insurance and Annuity Company, Inc. During 1994 the Michigan
Insurance Commission seized control of this United States Corporation due to a
similar action by the Canadian regulatory authorities over the company's parent
corporation, Confederation Life Insurance Company. Regulatory oversight began
as concerns regarding investment losses of the parent corporation developed
during 1993 and 1994. Management determined that any impairment of the
approximate $2,100,000 cash surrender value of the policies was remote due to
the financial stability of the U.S. subsidiary. Subsequently, on October 23,
1996, a plan of Rehabilitation for Confederation Life Insurance Company (U.S.)
was confirmed by the State of Michigan in the Circuit Court for the County of
Ingham. The plan provided for the assumption of
company owned life insurance policies (COLI), such as the Bank's, to be assumed
by Pacific Mutual Life Insurance Company. Under the agreement, holders of COLI
policies had the option to have a policy reinsured by Pacific Mutual which was
expected to have the same account value and substantially the same contract
terms as the original policy or to receive the liquidation or "opt-out" value of
the policy.
The Bank's independent external auditors revisited the facts and circumstances
regarding the investment in the COLI program and read the related guidance in
SFAS No. 5 and SAB Topic 5(Y). There continues to be no significant
uncertainties requiring the recognition of a loss contingency.
The Bank's COLI policies were reinsured by Pacific Mutual during the third
quarter of 1997. Management received permission from the Office of the
Comptroller of the Currency to return this asset to accrual status and to adjust
the carrying value during the first quarter of 1998 with the total cash
surrender values totalling approximately $85,000 above the carrying value on the
bank's books.
As of March 31, 2000, the Company does not have any interest-bearing assets that
would be required to be disclosed under Item III.C.1. or 2. if such assets were
loans.
10
<PAGE>
NOTE 5 - PREMISES AND EQUIPMENT
Property at March 31, 2000 and December 31, 1999 is summarized as follows:
March 31, December 31,
2000 1999
Land and buildings $ 10,463 $ 10,460
Furniture, fixtures and equipment 5,680 5,635
Construction in progress 953 469
$ 17,096 $ 16,564
Less accumulated depreciation and
amortization 8,191 8,060
$ 8,905 $ 8,504
Depreciation and amortization of bank premises and equipment charged to
operating expense was $131 for the quarter ended March 31, 2000 and $576 for the
year ended December 31, 1999.
NOTE 6 - CERTIFICATES OF DEPOSIT IN EXCESS OF $100,000
At March 31, 2000 and December 31, 1999, certificates of deposit of
$100,000 or more included in time deposits totalled approximately $64,033 and
$71,309 respectively. Interest expense on these deposits was approximately $924
for the quarter ended March 31, 2000 and $3,513 for the year ended December 31,
1999.
NOTE 7 - SECURITIES SOLD UNDER REPURCHASE AGREEMENTS
At March 31, 2000 and December 31, 1999, securities sold under repurchase
agreements totalled $28,195 and $27,477. U.S. Government securities with a book
value of $32,679 ($32,049 market value) and $34,588 ($34,121 market value),
respectively, are used as collateral for the agreements. The weighted-average
interest rate of these agreements was 4.59 percent and 4.34 percent at March 31,
2000 and December 31, 1999.
NOTE 8 - LINES OF CREDIT
At March 31, 2000, the Bank had unused short-term lines of credit to
purchase Federal Funds from unrelated banks totalling $23,000. These lines of
credit are available on a one to seven day basis for general corporate purposes
of the Bank. All of the lenders have reserved the right to withdraw these lines
at their option.
The Bank has a demand note through the U.S. Treasury, Tax and Loan system
with the Federal Reserve Bank of Richmond. The Bank may borrow up to $7,000
under the arrangement at a variable interest rate. The note is secured by U.S.
Treasury and Agency Securities with a market value of $7,763 at March 31, 2000.
The amount outstanding under the note totalled $1,608 and $3,809 at March 31,
2000 and December 31, 1999, respectively.
The Bank also has a line of credit from the Federal Home Loan Bank of
Atlanta for $67,000 secured by a lien on the Bank's 1-4 family mortgages.
Allowable terms range from overnight to twenty years at varying rates set daily
by the FHLB. At March 31, 2000, no borrowings were outstanding under the
agreement.
NOTE 9 - INCOME TAXES
Income tax expense for the quarter ended March 31, 2000 and March 31, 1999
on pretax income of $2,336 and $2,122 totalled $771 and $694, respectively. The
provision for federal income taxes is calculated by applying the 34% statutory
federal income tax rate and increasing or reducing this amount due to any
tax-exempt interest, state bank tax (net of federal benefit), business credits,
surtax exemption, tax preferences, alternative minimum tax calculations, or
other factor. A summary of income tax components and a reconciliation of income
taxes to the federal statutory rate is included in fiscal year-end reports.
Effective January 1, 1992, the Company adopted the provisions of Statement
of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income
Taxes". SFAS 109 replaces SFAS 96 beginning in 1993, with early implementation
permitted. The impact of the adoption of SFAS 109 is not considered to be
material.
11
<PAGE>
NOTE 10 - COMMITMENTS AND CONTINGENT LIABILITIES
From time to time the bank subsidiary is a party to various litigation,
both as plaintiff and as defendant, arising from its normal operations. No
material losses are anticipated in connection with any of these matters at March
31, 2000.
Also, in the normal course of business, the bank subsidiary has outstanding
commitments to extend credit and other contingent liabilities, which are not
reflected in the accompanying financial statements. At March 31, 2000,
commitments to extend credit totalled $26,843; financial standby letters of
credit totalled $205; and performance standby letters of credit totalled $683.
In the opinion of management, no material losses or liabilities are expected as
a result of these transactions.
NOTE 11 - EMPLOYEE BENEFIT PLAN
The Bank has a defined contribution pension plan covering all employees who
have attained age twenty-one and have a minimum of one year of service. Upon
ongoing approval of the Board of Directors, the Bank matches one-hundred percent
of employee contributions up to three percent of employee salary deferred and
fifty percent of employee contributions in excess of three percent and up to
five percent of salary deferred. The Board of Directors may also make
discretionary contributions to the Plan. For the quarter ended March 31, 2000
and years ended December 31, 1999, 1998 and 1997, $112, $423, $378, and $361,
respectively, was charged to operations under the plan.
NOTE 12 - REGULATORY MATTERS
The Bank is subject to various regulatory capital requirements administered
by the federal banking agencies. Failure to meet minimum capital requirements
can initiate certain mandatory -and possibly additional discretionary - actions
by regulators that, if undertaken, could have a direct material effect on the
financial statements. The regulations require the Bank to meet specific capital
adequacy guidelines that involve quantitative measures of assets, liabilities,
and certain off-balance-sheet items as calculated under regulatory accounting
practices. The capital classification is also subject to qualitative judgments
by the regulators about components, risk weightings, and other factors.
Quantitative measures established by regulation to ensure capital adequacy
require the maintenance of minimum amounts and ratios (set forth in the table
below) of Tier I capital to adjusted total assets (Leverage Capital ratio) and
minimum ratios of Tier I and total capital to risk-weighted assets. To be
considered adequately capitalized under the regulatory framework for prompt
corrective action, the Bank must maintain minimum Tier I leverage, Tier I
risk-based and total risked-based ratios as set forth in the table. The Bank's
actual capital ratios are also presented in the table below as of March 31,
2000:
To be
well capitalized
For under prompt
capital adequacy corrective action
purposes provisions
Actual Minimum Minimum
Amount Ratio Amount Ratio Amount Ratio
Total Capital (to risk $46,920 16.36% $22,940 8.0% $28,675 10.0%
weighted assets)
Tier I Capital (to risk 43,336 15.11 11,470 4.0 17,205 6.0
weighted assets)
Tier I Capital (to avg. 43,336 9.59 18,070 4.0 22,588 5.0
assets)
12
<PAGE>
NOTE 13 - CONDENSED FINANCIAL INFORMATION
Following is condensed financial information of CNB Corporation (parent
company only):
CONDENSED BALANCE SHEET
MARCH 31, 2000
(Unaudited)
ASSETS
Cash $ 2,188
Investment in subsidiary 42,115
Fixed assets 786
Other assets 37
$ 45,126
LIABILITIES AND STOCKHOLDERS' EQUITY
Other liability $ 0
Stockholders' equity 45,126
$ 45,126
CONDENSED STATEMENT OF INCOME
For the three-month period ended March 31, 2000
(Unaudited)
EQUITY IN NET INCOME OF SUBSIDIARY $ 1,591
OTHER INCOME 1
OTHER EXPENSES (27)
Net Income $ 1,565
DISCUSSION OF FORWARD-LOOKING STATEMENTS
Information in the enclosed report, other than historical information, may
contain forward-looking statements that involve risks and uncertainties,
including, but not limited to, timing of certain business initiatives of the
Company, the Company's interest rate risk condition, and future regulatory
actions of the Comptroller of the Currency and Federal Reserve System. It is
important to note that the Company's actual results may differ materially and
adversely from those discussed in forward-looking statements.
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Management's Discussion and Analysis is provided to afford a clearer
understanding of the major elements of the corporation's results of operations,
financial condition, liquidity, and capital resources. The following discussion
should be read in conjunction with the corporation's financial statements and
notes thereto and other detailed information appearing elsewhere in this report.
In addition, the results of operations for the interim periods shown in this
report are not necessarily indicative of results to be expected for the fiscal
year. In the opinion of management, the information contained herein reflects
all adjustments necessary to make the results of operations for the interim
periods a fair statement of such operations. All such adjustments are of a
normal and recurring nature.
DISTRIBUTION OF ASSETS AND LIABILITIES
The Company maintains a conservative approach in determining the distribution of
assets and liabilities. Loans, net of unearned income, have increased 15.5%
from $238,798 at March 31, 1999 to $275,866 at March 31, 2000 and have decreased
as a percentage of total assets from 53.6% to 60.5% over the same period as loan
demand has strengthened in our market. Securities and federal funds sold have
decreased as a percentage of total assets from 40.2% at March 31, 1999 to 32.4%
at March 31, 2000 as we have utilized funds in the lending area. This level of
investments and federal funds sold provides for a more than adequate supply of
secondary liquidity. Management has sought to build the deposit base with
stable, relatively non-interest-sensitive deposits by offering the small to
medium deposit account holders a wide array of deposit instruments at
competitive rates. Non-interest-bearing demand deposits increased as a
percentage of total assets from 16.7% at March 31, 1999 to 17.4% at March 31,
2000. However, as more customers, both business and personal, are attracted to
interest-bearing deposit accounts, we expect the percentage of demand deposits
to decline over the long-term. Interest-bearing deposits have decreased
slightly from 65.7% of total assets at March 31, 1999 to 65.4% at March 31, 2000
while securities sold under agreement to repurchase have decreased from 7.2% to
6.2% over the same period.
The following table sets forth the percentage relationship to total assets of
significant component's of the corporation's balance sheet as of March 31, 2000
and 1999:
<TABLE>
<CAPTION>
March 31,
<S> <C> <C>
Assets: 2000 1999
Earning assets:
Loans, net of unearned income 60.5% 53.6%
Investment securities 10.9 13.2
Securities Available for Sale 19.6 18.6
Federal funds sold and securities purchased
under agreement to resell 1.9 8.4
Other earning assets - -
Total earning assets 92.9 93.8
Other assets 7.1 6.2
Total assets 100.0% 100.0%
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Interest-bearing deposits 65.4% 65.7%
Federal funds purchased and securities sold
under agreement to repurchase 6.2 7.2
Other short-term borrowings .4 .3
Total interest-bearing liabilities 72.0 73.2
Noninterest-bearing deposits 17.4 16.7
Other liabilities .7 .6
Stockholders' equity 9.9 9.5
Total liabilities and stockholders' equity 100.0% 100.0%
</TABLE>
14
<PAGE>
RESULTS OF OPERATION
CNB Corporation experienced earnings for the three-month period ended March 31,
2000 and 1999 of $1,565 and $1,428, respectively, resulting in a return on
average assets of 1.38% and 1.32% and a return on average stockholders' equity
of 14.04% and 13.68%.
The earnings were primarily attributable to net interest margins in each period
(see Net Income-Net Interest Income). Other factors include management's
ongoing effort to maintain other income at adequate levels (see Net Income -
Other Income) and to control other expenses (see Net Income - Other Expenses).
This level of earnings, coupled with a conservative dividend policy, have
supplied the necessary capital funds to support the growth in total assets.
Total assets have increased $11,077 or 2.5% from $445,184 at March 31, 1999 to
$456,261 at March 31, 2000. The following table sets forth the financial
highlights for the three-month periods ending March 31, 2000 and March 31, 1999:
CNB Corporation
CNB Corporation and Subsidiary
FINANCIAL HIGHLIGHTS
(All Dollar Amounts, Except Per Share Data, in Thousands)
Three-Month Period Ended March 31,
<TABLE>
<CAPTION>
Percent
Increase
2000 1999 (Decrease)
<S> <C> <C> <C>
Net interest income after provision for
loan losses 4,641 4,178 11.1%
Income before income taxes 2,336 2,122 10.1
Net Income 1,565 1,428 9.6
Per Share 2.62 2.39 9.6
Cash dividends declared 0 0 0
Per Share 0 0 0
Total assets 456,421 445,184 2.5%
Total deposits 377,801 367,106 2.9
Loans, net of unearned income 275,866 238,798 15.5
Investment securities 139,526 141,849 (1.6)
Stockholders' equity 45,126 42,296 6.7
Book value per share 75.65 70.81 6.8
Ratios (1):
Annualized return on average total assets 1.38% 1.32% 4.5%
Annualized return on average stockholders'
Equity 14.04% 13.68% 2.6%
</TABLE>
(1) For the three-month period ended March 31, 2000 and March 31, 1999,
average total assets amounted to $452,584 and $432,937 with average
stockholders' equity totaling $44,587 and $41,754, respectively.
15
<PAGE>
NET INCOME
Net Interest Income - Earnings are dependent to a large degree on net interest
income, defined as the difference between gross interest and fees earned on
earning assets, primarily loans and securities, and interest paid on deposits
and borrowed funds. Net interest income is effected by the interest rates
earned or paid and by volume changes in loans, securities, deposits, and
borrowed funds.
Interest rates paid on deposits and borrowed funds and earned on loans and
investments have generally followed the fluctuations in market interest rates in
2000 and 1999. However, fluctuations in market interest rates do not
necessarily have a significant impact on net interest income, depending on the
bank's rate sensitivity position. A rate sensitive asset (RSA) is any loan or
investment that can be repriced either up or down in interest rate within a
certain time interval. A rate sensitive liability (RSL) is an interest paying
deposit or other liability that can be repriced either up or down in interest
rate within a certain time interval. When a proper balance between RSA and RSL
exists, market interest rate fluctuations should not have a significant impact
on earnings. The larger the imbalance, the greater the interest rate risk
assumed by the bank and the greater the positive or negative impact of interest
rate fluctuations on earnings. The bank seeks to manage its assets and
liabilities in a manner that will limit interest rate risk and thus stabilize
longrun earning power. Management believes that a rise or fall in interest
rates will not materially effect earnings.
The Bank has maintained adequate net interest margins for the three-month period
ended March 31, 2000 and 1999 by earning satisfactory yields on loans and
investments and funding these assets with a favorable deposit mix containing a
significant level of noninterest-bearing demand deposits.
Fully-tax-equivalent net interest income showed a 12.6% increase from $4,421 for
the three-month period ended March 31, 1999 to $4,980 for the three-month period
ended March 31, 2000. During the same period, total fully-tax-equivalent
interest income increased by 10.8% from $7,581 to $8,400 and total interest
expense increased by 8.2% from $3,160 to $3,420. Fully-tax-equivalent net
interest income as a percentage of total earning assets has shown an increase of
.32% from 4.38% for the three-month period ended March 31, 1999 to 4.70% for the
three-month period ended March 31, 2000.
The tables on the following two pages present selected financial data and an
analysis of net interest income.
16
<PAGE>
CNB Corporation and Subsidiary
Selected Financial Data
<TABLE>
<CAPTION>
Three Months Ended 3/31/00 Three Months Ended 3/31/99
Avg. Interest Avg. Ann. Avg. Interest Avg.Ann.
Balance Income/ Yield or Balance Income/ Yield or
Expense(1) Rate Expense(1) Rate
<S> <C> <C> <C> <C> <C> <C>
Assets:
Earning assets:
Loans, net of unearned income $271,873 $ 6,133 9.02% $233,549 $ 5,097 8.73%
Securities:
Taxable 127,973 1,865 5.83 131,690 1,929 5.86
Tax-exempt 16,203 292 7.21 14,746 273 7.41
Federal funds sold and
securities purchased under
agreement to resell 7,993 110 5.50 24,074 282 4.69
Other earning assets 0 0 - 0 0 -
Total earning assets 424,042 8,400 7.92 404,059 7,581 7.50
Other assets 28,542 28,878
Total assets $452,584 $432,937
Liabilities and stockholder equity
Interest-bearing liabilities:
Interest-bearing deposits $301,199 3,065 4.07 $286,315 $ 2,809 3.92
Federal funds purchased and
securities sold under
agreement to repurchase 29,012 329 4.54 33,127 337 4.07
Other short-term borrowings 1,595 26 6.52 1,064 14 5.26
Total interest-bearing
liabilities $331,806 $ 3,420 4.12 $320,506 $ 3,160 3.94
Noninterest-bearing deposits 72,895 66,471
Other liabilities 3,296 4,206
Stockholders' equity 44,587 41,754
Total liabilities and
stockholders' equity $452,584 $432,937
Net interest income as a percent
of total earning assets $424,042 $ 4,980 4.70 $404,059 $ 4,421 4.38
(1) Tax-equivalent adjustment
based on a 34% tax rate $ 99 $ 93
Ratios:
Annualized return on average total assets 1.38 1.32
Annualized return on average stockholders' equity 14.04 13.68
Cash dividends declared as a percent of net income 0 0
Average stockholders' equity as a percent of:
Average total assets 9.85 9.64
Average total deposits 11.92 11.84
Average loans, net of unearned income 16.40 17.88
Average earning assets as a percent of
average total assets 93.69 93.33
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
CNB Corporation and Subsidiary
Rate/Volume Variance Analysis
For the Three Months Ended March 31, 2000 and 1999
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Change
Average Average Interest Interest Change Change Due To
Volume Volume Yield/Rate Yield/Rate Earned/Paid Earned/Paid Due to Due To Rate X
2000 1999 2000 (1) 1999 (1) 2000 (1) 1999 (1) Variance Rate Volume Volume
Earning Assets:
Loans, Net of unearned
income (2) 271,873 233,549 9.02% 8.73% 6,133 5,097 1,036 169 836 31
Investment securities:
Taxable 127,973 131,690 5.83% 5.86% 1,865 1,929 (64) (10) (54) -
Tax-exempt 16,203 14,746 7.21% 7.41% 292 273 19 (7) 27 (1)
Federal funds sold and
securities purchased under
agreement to resell 7,993 24,074 5.50% 4.69% 110 282 (172) 48 (189) (31)
Other earning assets 0 0 - - 0 0 0 - - -
Total Earning Assets 424,042 404,059 7.92% 7.50% 8,400 7,581 819 200 620 (1)
Interest-bearing Liabilities:
Interest-bearing deposits 301,199 286,315 4.07% 3.92% 3,065 2,809 256 107 145 4
Federal funds purchased and
securities sold under
agreement to repurchase 29,012 33,127 4.54% 4.07% 329 337 (8) 39 (42) (5)
Other short-term borrowings 1,595 1,064 6.52% 5.26% 26 14 12 3 7 2
Total Interest-bearing
Liabilities 331,806 320,506 4.12% 3.94% 3,420 3,160 260 149 110 1
Interest-free Funds
Supporting Earning Assets 92,236 83,553
Total Funds Supporting
Earning Assets 424,042 404,059 3.22% 3.12% 3,420 3,160 260 149 110 1
Interest Rate Spread 3.80% 3.56%
Impact of Non-interest-
bearing Funds on Net Yield
on Earning Assets .90% .82%
Net Yield on Earning Assets 4.70% 4.38% 4,980 4,421
</TABLE>
(1) Tax-equivalent adjustment based on a 34% tax rate.
(2) Includes non-accruing loans which does not have a material effect on the
Net Yield on Earning Assets.
18
<PAGE>
NET INCOME (continued)
Provision for Possible Loan Losses - It is the policy of the bank to maintain
the reserve for possible loan losses at the greater of 1.20% of net loans or the
percentage based on the actual loan loss experience over the previous five
years. In addition, management may increase the reserve to a level above these
guidelines to cover potential losses identified in the portfolio.
The provision for possible loan losses was $240 for the three-month period ended
March 31, 2000 and $150 for the three-month period ended March 31, 1999. Net
loan charge-offs totalled $16 for the three-month period ended March 31, 2000
and $83 for the same period in 1999.
The reserve for possible loan losses as a percentage of net loans was 1.35% at
March 31, 2000 and 1.36% at March 31, 1999. The provision for possible loan
losses increased from $150 during the first quarter of 1999 to $240 during the
first quarter of 2000 due to an increase in the rate of loan growth.
Securities Transactions - The bank had no security sales during the first
quarter of 2000 or 1999. At March 31, 2000, December 31, 1999, and March 31,
1999 market value appreciation/(depreciation) in the investment portfolio
totalled $(2,665), $(2,121), and $875, respectively. As indicated, market
values have decreased due to higher market interest rates.
Other Income - Other income, net of any gains/losses on security transactions,
increased by 13.4% from $906 for the three-month period ended March 31, 1999 to
$1,027 for the three-month period ended March 31, 2000 primarily due to an
increase in deposit account volumes and higher merchant discount income.
Other Expenses - Other expenses increased by 12.5% from $2,962 for the
three-month period ended March 31, 1999 to $3,332 for the three-month period
ended March 31, 2000. The major components of other expenses are salaries and
employee benefits which increased 10.2% from $1,843 to $2,031; occupancy expense
which increased 15.9% from $389 to $451; and other operating expenses which
increased by 16.4% from $730 to $850. The increase in the three-month period
ended March 31, 2000 salaries and employee benefits was due to the staffing of
the new "Murrells Inlet Office" which opened in April, 2000 and the increased
costs of providing employee benefits, particularly health insurance coverage.
Occupancy expense was also impacted by costs associated with the new office.
Other operating expenses have increased due to higher credit card department
related costs to support the growth in merchant discount income.
Income Taxes - Provisions for income taxes increased 11.1% from $694 for the
three-month period ended March 31, 1999 to $771 for the three-month period ended
March 31, 2000. Income before income taxes less interest of tax-exempt
investment securities increased by 10.4% from $1,942 for the three-month period
ended March 31, 1999 to $2,143 for the same period in 2000. State tax liability
increased as income before income taxes increased 10.1% from $2,122 to $2,336
during the same period.
LIQUIDITY
The bank's liquidity position is primarily dependent on short-term demands for
funds caused by customer credit needs and deposit withdrawals and upon the
liquidity of bank assets to meet these needs. The bank's liquidity sources
include cash and due from banks, federal funds sold, and short-term investments.
In addition, the bank has established federal funds lines of credit from
correspondent banks and has the ability to borrow funds from the Federal Reserve
System and the Federal Home Loan Bank of Atlanta. Management feels that
short-term and long-term liquidity sources are more than adequate to meet
funding needs.
19
<PAGE>
CAPITAL RESOURCES
Total stockholders' equity was $45,126, $43,712, $41,201, and $37,717 at March
31, 2000, December 31, 1999, December 31, 1998, and December 31, 1997,
representing 9.89%, 9.59%, 9.66%, and 9.90% of total assets, respectively. At
March 31, 2000, the Bank exceeds quantitative measures established by regulation
to ensure capital adequacy (see NOTE 12 - REGULATORY MATTERS). Capital is
considered sufficient by management to meet current and prospective capital
requirements and to support anticipated growth in bank operations.
The Company paid an approximate 25% stock dividend on September 12, 1997. The
Board increased the $3.00 per share annual cash dividend paid at year-end 1997
to $3.50 per share at year-end 1998 and 1999 which increased the cash dividend
payout ratio and cash dividend yield.
EFFECTS OF REGULATORY ACTION
The Federal Deposit Insurance Corporation (FDIC) reduced FDIC insurance premium
rates during the third quarter of 1995 which has had a positive effect on
subsequent earnings and should favorably impact future year's income. Effective
March 11, 2000, the Gramm-Leach-Bliley Act of 1999 allows bank holding companies
to elect to be treated as financial holding companies which may engage in a
broad range of securities, insurance, and other financial activities. At this
time, neither the Company nor the Bank plan to enter these new lines of
business. The management of the Company and the Bank is not aware of any
current recommendations by the regulatory authorities which, if they were to be
implemented, would have a material effect on liquidity, capital resources, or
operations.
ACCOUNTING ISSUES
In an effort to simplify the current standards in the United States for
computing earnings per share ("EPS") and make them more compatible with
international standards, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 128, "Earnings per Share" in February 1997. SFAS 128
applies to entities with publicly traded common stock or potential common
stock and is effective for financial statements for periods ending after
December 15, 1997, including interim periods. SFAS 128 simplifies the
standards for computing EPS previously found in APB Opinion 15, "Earnings
per Share." It replaces the presentation of primary EPS with a presentation
of basic EPS. It also requires dual presentation of basic and diluted EPS
on the face of the income statement for all companies with complex capital
structures and requires a reconciliation of the numerator and denominator of
the basic EPS computation to the numerator and denominator of the diluted
EPS computation. The Company does not have any dilutive common stock or
equivalents and accordingly the adoption of SFAS had no effect on earnings
per share computations.
The FASB also issued SFAS No. 129, "Disclosure of Information about Capital
Structure" in February 1997. The purpose of SFAS 129 is to consolidate
existing disclosure requirements for ease of retrieval. SFAS 129 contains
no change in disclosure requirements for companies that were subject to the
previously existing requirements. It applies to all entities and is
effective for Financial Statements for periods ending after December 15,
1997.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income." SFAS 130 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. SFAS 130
requires that all items that are required to be recognized under accounting
standards as components of comprehensive income be reported in a financial
statement that is displayed with the same prominence as other financial
statements. SFAS 130 requires that companies (i) classify items of other
comprehensive income by their nature in a financial statement and (ii)
display the accumulated balance of other comprehensive income separately
from retained earnings and additional paid-in-capital in the equity section
of the statement of financial condition. SFAS 130 is effective for fiscal
years beginning after December 15, 1997. Reclassification of financial
statements for earlier periods provided for comprehensive purposes is
required. The adoption of SFAS 130 had no effect on the Company's net
income or stockholders' equity.
20
<PAGE>
ACCOUNTING ISSUES (continued)
In June, 1997, the FASB also issued SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS 131 establishes
standards for the way public enterprises are to report information about
operating segments in annual financial statements and requires those
enterprises to report selected information about operating segments in
interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas, and major customers. SFAS 131 supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise." SFAS 131
becomes effective for financial statements for periods beginning after
December 15, 1997, and requires that comparative information from earlier
years be restated to conform to its requirements. The adoption of the
provisions of SFAS 131 is not expected to have a material impact on the
Company.
In June 1998, the FASB issued SFAS 133, "Accounting for Derivative
Instrument and Hedging Activities." All derivatives are to be measured at
fair value and recognized in the balance sheet as assets or liabilities.
The statement is effective for fiscal years and quarters beginning after
June 15, 2000 (as amended by SFAS No. 137). Because the Company does not use
derivative transactions at this time, management does not expect that this
standard will have a significant effect on the Company.
YEAR 2000
The Year 2000 date change posed a unique challenge to the banking industry.
This technical problem posed not only a physical system threat but also a threat
to the public's confidence in the banking industry. The Conway National Bank's
investment of its staff and financial resources to address operational issues
and to maintain the confidence of our customers resulted in an uneventful but
successful Year 2000 date change.
21
<PAGE>
EXHIBITS AND REPORTS ON FORM 8-K
See Exhibit Index appearing below.
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the quarter
covered by this report.
EXHIBIT INDEX
Exhibit
Number
27 Financial Data Schedule - Article 9 Financial Data Schedule for
10-Q for electronic filers (pages 24 and 25).
All other exhibits, the filing of which are required with this Form, are not
applicable.
22
<PAGE>
CNB 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.
CNB Corporation
(Registrant)
Paul R. Dusenbury
_________________________________________
Paul R. Dusenbury
Treasurer
(Chief Financial and Accounting Officer)
Date: May 11, 2000
23
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MORE
DETAILED FINANCIAL STATEMENTS OF THE COMPANY AND SUBSIDIARY AND NOTES THERETO
INCLUDED ELSEWHERE IN THIS REPORT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIALS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 18,237
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 8,650
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 89,614
<INVESTMENTS-CARRYING> 49,912
<INVESTMENTS-MARKET> 49,283
<LOANS> 275,866
<ALLOWANCE> 3,675
<TOTAL-ASSETS> 456,261
<DEPOSITS> 377,801
<SHORT-TERM> 29,803
<LIABILITIES-OTHER> 3,531
<LONG-TERM> 0
0
0
<COMMON> 5,987
<OTHER-SE> 39,139
<TOTAL-LIABILITIES-AND-EQUITY> 456,261
<INTEREST-LOAN> 6,133
<INTEREST-INVEST> 2,058
<INTEREST-OTHER> 110
<INTEREST-TOTAL> 8,301
<INTEREST-DEPOSIT> 3,065
<INTEREST-EXPENSE> 3,420
<INTEREST-INCOME-NET> 4,881
<LOAN-LOSSES> 240
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,332
<INCOME-PRETAX> 2,336
<INCOME-PRE-EXTRAORDINARY> 1,565
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,565
<EPS-BASIC> 2.62<F1>
<EPS-DILUTED> 2.62<F1>
<YIELD-ACTUAL> 4.70<F1>
<LOANS-NON> 365
<LOANS-PAST> 157
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 365
<ALLOWANCE-OPEN> 3,451
<CHARGE-OFFS> 95
<RECOVERIES> 79
<ALLOWANCE-CLOSE> 3,675
<ALLOWANCE-DOMESTIC> 3,675
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
<FN>
<F1>MULTIPLIER IS NOT APPLICABLE TO EPS AND YIELD DATA.
</FN>
</TABLE>
