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U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-14294
Greater Community Bancorp
(Exact name of small business issuer as specified in its charter)
NEW JERSEY 22-2545165
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
55 Union Boulevard, Totowa, New Jersey 07512
(Address of principal executive offices)
(201) 942-1111
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: Common stock $1.00
par value - 1,883,667 shares at November 12, 1996.
Transition Small Business Disclosure Format (check one);
Yes No X
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GREATER COMMUNITY BANCORP AND SUBSIDIARIES
INDEX
PAGE
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Condensed Consolidated Balance Sheet
September 30, 1996 (unaudited)
and December 31, 1995. . . . . . . . . . . . . 3
Condensed Consolidated Statements of Income
Three and Nine months ended
September 30, 1996 and 1995 (unaudited) . . . . . .4
Condensed Consolidated Statements of Cash Flows
Nine months ended September 30, 1996 and 1995
(unaudited) . . . . . . . . . . . . . . . . . . .5
Notes to Consolidated Financial Statements(unaudited).6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . .8
PART II - OTHER INFORMATION
Items 1 through 6 . . . . . . . . . . . . . . . . . . 19
Signatures . . . . . . . . . . . . . . . . . . . . . . . 18
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PART 1 - FINANCIAL INFORMATION
Item 1- Financial Statements
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands, except share data)
September 30, December 31,
1996 1995
Unaudited
ASSETS
Cash and due from banks-
Non-interest-bearing $ 12,619 $ 11,471
Federal funds sold 4,150 17,575
16,769 29,046
Due from banks - Interest-bearing 1,338 1,148
Investment Securities Available-for-sale 52,970 47,835
Investment Securities Held-to-maturity 39,324 36,151
92,294 83,986
Loans, Net 136,421 129,107
Premises and equipment, net 2,862 3,082
Accrued interest receivable 1,943 1,977
Other real estate owned 2,130 2,070
Other assets 2,783 2,629
TOTAL ASSETS $256,540 $253,045
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand
Non-interest-bearing 53,490 $46,332
Interest-bearing 52,185 59,141
Savings 25,491 26,030
Time 89,453 91,263
220,619 222,766
Accrued interest and other liabilities 3,484 2,952
Federal funds purchased and securities
sold under agreements to repurchase 7,276 2,756
Redeemable subordinated debentures 4,986 4,976
TOTAL LIABILITIES 236,365 233,450
SHAREHOLDERS' EQUITY
Preferred stock, without par value:
1,000,000 shares authorized, none outstanding - -
Common Stock, par value $1 per share:
10,000,000 shares authorized, 1,883,667
and 1,709,451 shares outstanding 1,884 1,709
Additional paid-in capital 17,783 15,231
Retained earnings 503 2,102
Unrealized holding gain on
securities available-for-sale 125 553
Treasury stock, at cost (8,200 shares) (120) -
TOTAL SHAREHOLDERS' EQUITY 20,175 19,595
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $256,540 $253,045
(See notes to Condensed Consolidated Financial Statements)
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GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(Unaudited)
Three Months Nine Months
Ended Sept. 30, Ended Sept. 30,
1996 1995 1996 1995
INTEREST INCOME
Interest on loans, including fees $3,218 $3,216 $9,383 $8,724
Interest on investment securities 1,447 1,343 4,163 3,462
Interest on Federal Funds
sold and deposits with banks 106 180 355 352
4,771 4,739 13,901 12,538
INTEREST EXPENSE
Interest on deposits 1,636 1,577 4,809 4,145
Interest on borrowings 208 158 550 474
1,844 1,735 5,359 4,619
2,927 3,004 8,542 7,919
PROVISION FOR POSSIBLE LOAN LOSSES 110 134 290 295
NET INTEREST INCOME AFTER
PROVISION FOR POSSIBLE LOAN LOSSES 2,817 2,870 8,252 7,624
OTHER INCOME 465 264 1,459 1,143
3,282 3,134 9,711 8,767
OTHER EXPENSES
Salaries and employee benefits 1,029 1,030 3,159 2,691
Occupancy and equipment 480 256 1,487 836
Amortization of intangibles 27 54 85 136
FDIC Assessment 293 170 354 251
Other operating expenses 731 786 2,329 2,476
2,560 2,296 7,414 6,390
INCOME BEFORE INCOME TAXES 722 838 2,297 2,377
PROVISION FOR INCOME TAXES 245 317 816 834
NET INCOME $477 $521 $1,481 $1,543
WEIGHTED AVERAGE SHARES OUTSTANDING 1,880 1,868 1,881 1,801
NET INCOME PER SHARE $0.23 $0.28 $0.70 $0.86
(See notes to Condensed Consolidated Financial Statements)
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GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Nine Months Ended
September 30,
1996 1995
OPERATING ACTIVITIES
Net income $ 1,481 $ 1,135
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 810 298
Accretion of discount on securities, net (149) (74)
Realization of discount on investment securities (49) -
(Loss) Gain on sale of securities, net (4) 141
Provision for possible loan losses 290 240
Decrease (increase) in accrued interest receivable 34 (51)
Increase in other assets (214) (129)
(Decrease)increase in accrued interest and other
liabilities (542) 1,676
Net cash provided by operating activities 1,657 3,236
INVESTING ACTIVITIES
Purchases of investment securities avaiable-for-sale(11,174) (8,975)
Sales or maturities of investment securities
Held-to-maturity 6,665 6,929
Purchases of investment securities held-to-maturity (13,771)(10,795)
Maturities of investment securities
available-for-sale 10,598 7,526
Net decrease in interest-bearing
deposits with banks (191) 927
Net increase in loans (7,604) (3,676)
Purchase of premises and equipment (590) (1,473)
Net cash used in investing activities (16,067) (9,537)
FINANCING ACTIVITIES
Net (decrease) increase in deposits (2,147) 7,192
Net increase in repurchase agreements 4,520 350
Dividends paid on common stock (394) (129)
Purchase of treasury stock 120 _
Proceeds from exercise of stock options 29 -
Cash acquired through purchase transaction - 4,045
Other, net 5 -
Net cash provided by financing activities 2,133 11,458
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (12,277) 5,157
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 29,046 4,289
CASH AND CASH EQUIVALENTS, END OF PERIOD $16,769 $9,446
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during period for:
Interest $3,287 $2,961
Income taxes 559 561
Common stock issued in purchase transaction - 1,802
(See notes to Condensed Consolidated Financial Statements)
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
In the opinion of management, these unaudited financial
statements contain all disclosures which are necessary to
present fairly the Corporation's consolidated financial
position at September 30, 1996 and the consolidated results of
operations and cash flows for three and nine months ended
September 30, 1996 and 1995. The financial statements include
all adjustments (consisting only of normal recurring
adjustments) which in the opinion of management are necessary
in order to present fairly the financial position and results
of operations for the interim periods. Certain information and
footnote disclosures normally included in financial statements
under generally accepted accounting principles have been
condensed or omitted pursuant to the Securities and Exchange
Commission rules and regulations. These financial statements
should be read in conjunction with the annual financial
statements and notes thereto included in Form 10-KSB for the
fiscal year ended December 31, 1995.
ACQUISITION
Results of operations include the amounts of Bergen Commercial
Bank (BCB) which the Corporation acquired effective December
31, 1995, through an exchange of stock in which the Corporation
issued 692,228 shares. The acquisition was accounted for under
the pooling method of accounting.
Dividend
During September 1996, the Corporation's Board of Directors
declared a cash dividend of 7 cents ($.07) per share, Which is
payable on November 1, 1996 to shareholders of record October
15, 1996. The financial information in this report has been
adjusted to reflect the dividends payable as of September 30,
1996.
RECENT LEGISLATION
The earnings of the Corporation, through the subsidiary banks,
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are and will be affected from time to time by legislative
actions taken by the United States Government.
On September 30, 1996, the President of the United States
signed the legislation which contains the Deposit Insurance
Fund Act of 1996 to recapitalize the Savings Association
Insurance Fund ("SAIF"). Under this legislation, the Federal
Deposit Insurance Corporation ("FDIC") has levied a special
assessment on SAIF assessable deposits held as of March 31,
1995. The Corporation in its acquisition of Family First
Federal Savings Bank in 1995, had acquired deposits which are
considered SAIF assessable deposits and are subject to this
special assessment.
The Corporation estimated and recorded $263,317 as its portion
of this special assessment in the statements of income for the
three and nine-month periods ended September 30, 1996. The
assessment was based on $58 million in SAIF deposits. For
accounting purposes, this special assessment was treated as a
third quarter of 1996 event.
The legislation is expected to reduce the future annual deposit
insurance cost for SAIF deposits. The Corporation anticipates
that such reductions, which are to become effective in 1997,
will equal the $263,317 charge in approximately 3 years.
Earnings Per Share Computation
The Corporation's reported earnings per share of $0.23 and
$0.70 per share for the three and nine-month periods ended
September 30, 1996 both take into account the dilutive effect
of the Corporation's outstanding common stock equivalents,
namely stock options and mandatory stock purchase contracts.
The dilution results from the calculation of adjustments to
both the number of weighted average shares outstanding and the
Corporation's net income for the three and nine-month periods
ended September 30, 1996. The effect of these common stock
equivalents was either not significant or anti-dilutive for the
three and nine-month periods ended September 30, 1995.
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GREATER COMMUNITY BANCORP AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion and analysis of the Corporation's
consolidated financial condition as of September 30, 1996 and
the results of operations for the three and nine-month periods
ended September 30, 1996 and 1995 should be read in conjunction
with the consolidated financial statements, including notes
thereto, included in the Corporation's latest annual report on
Form 10-KSB for the fiscal year ended December 31, 1995, and
the other information herein. The consolidated statement of
condition as of September 30, 1996 and the statements of
operations and cash flows for the three and nine months ended
September 30, 1996 and 1995 are unaudited but include, in the
opinion of the management, all adjustments considered necessary
for a fair presentation of such data. The term "Corporation" as
used herein refers to Greater Community Bancorp and
subsidiaries and the term "Subsidiary Banks" as used herein
refers to Great Falls Bank and Bergen Commercial Bank. Data is
presented for both the Corporation and the Subsidiary Banks
unless otherwise noted. All dollar figures, except for per
share data, are set forth in thousands.
A. Financial Condition: September 30, 1996 and December 31,
1995
As of September 30, 1996, the Corporation's total assets were
$256,540 an increase of $3,495 or 1.4% compared to the amount
reported at December 31, 1995. Non-interest bearing cash and
due from banks increased by $1,148 or 10.0% whereas federal
funds sold decreased by $13,425 or 76.4%. Substantially all of
the decrease in federal funds sold was offset by increases in
both investment securities and loans. Interest bearing due
from banks increased by $190 or 16.5% primarily due to
additional investing in such assets when compared to the amount
reported at December 31, 1995.
Investment Securities
Investment Securities totaled $92,294 at September 30, 1996, an
increase of $8,308 or 9.9% compared to the amount reported at
December 31, 1995. Management reviews the investment portfolio
continually to achieve maximum yields without having to
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sacrifice the high quality of the investments. Of the total,
47.6% of the investments are in U.S. Government obligations,
20.6% in U.S. Government agency obligations, 22.1% in mortgage
backed securities and the balance in municipal and other
securities.
At September 30, 1996, based on the fair market value of its
available-for-sale portfolio, the Corporation recorded the
difference between the unamortized cost and the fair market
value as an unrealized gain in the amount of $125, net of
taxes, as a component of shareholders' equity. This was a
decrease of $428 from the $553 amount recorded at December 31,
1995 primarily due to the change in market conditions.
Loan Portfolio
The Corporation's loan portfolio net of allowance for possible
loan losses at September 30, 1996 totaled $136,421, an increase
of $7,314 or 5.7% compared to the amount reported at December
31, 1995. The increase in loans is primarily due to increased
loan demand.
Other Real Estate Owned
As of September 30, 1996, other real estate totaled $2,130, an
increase of $60 or 3.0% when compared to the amount reported at
December 31, 1995.
Deposits
Total deposits at September 30, 1996 were $220,619, a decrease
of $2,147 or 1.0% relative to the amount reported at December
31, 1995. Within the components of total deposits, non-interest
bearing demand deposits increased by $7,158 or 15.4%
while interest-bearing demand deposits, savings and time
deposits decreased by $6,956 or 11.8%, $539 or 2.1% and $1,810
or 2.0%, respectively. The decreases in these components are
primarily due to the continuing customer's search for high
yields on deposits at maturity and normal withdrawals.
Liquidity
The Corporation maintains a liquidity position which it
considers adequate to provide funds to meet loan demand or the
possible outflow of deposits. It actively manages its liquidity
position under the direction of the Subsidiary Banks' Asset and
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Liability Management Committees. At September 30, 1996,
sources of liquidity include $13,957 in cash and due from
banks, $4,150 in federal funds sold and securities
available-for-sale of $52,970.
Capital Adequacy and Regulatory Matters
The Corporation is subject to regulation by the Board of
Governors of the Federal Reserve System (Federal Reserve
Board). The Subsidiary Banks are subject to regulation by both
the FDIC and the New Jersey Department of Banking (Department).
Such regulators have promulgated regulations which require the
Corporation and the Subsidiary Banks to maintain certain
capital ratios. At September 30, 1996, the Corporation and
Subsidiary Banks exceed the "Well Capitalized" ratios as
determined by the appropriate regulatory authorities. The
following table sets forth the regulatory capital ratios for
the Corporation and the Subsidiary Banks and the required
regulatory ratios at that date.
Well
Greater Great Bergen Capitalized
Community Falls Commercial (Under FDIC
Bancorp Bank Bank Regulation)
Tier I leverage ratio 7.71% 6.73% 9.14% 5%
Tier I risk-based capital ratio 12.40% 1.72% 13.34% 6%
Tier I and Tier II risk-based
capital ratio 16.93% 12.98% 14.51% 10%
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Asset Quality
The Corporation seeks to manage credit risk through
diversification of its loan portfolio and the application of
policies and procedures designed to foster sound underwriting
and credit monitoring policies. The senior lending officer is
charged with monitoring asset quality, establishing credit
policies and procedures and seeking consistent applications of
the loan review procedures.
The Corporation's lending is concentrated in its local market
area. Its non-performing loans primarily were made to the
Corporation's customers who operated in northeastern New
Jersey. The degree of risk inherent in all of the Corporation's
lending activities is influenced heavily by general economic
conditions in the immediate market area. Among the factors
which tend to increase or decrease portfolio risk are changes
in local or regional real estate values, income levels and
energy prices. These factors, coupled with levels of
unemployment, tax rates, governmental actions and market
conditions affecting the demand for credit among qualified
borrowers, are also important determinants of the risk inherent
in the Corporation's lending.
General economic conditions in the State of New Jersey have
improved over the past year. Interest rates have increased,
due in part to action by the Federal Reserve Board, the general
real estate interest rates have shown an upward trend, real
estate values and employment levels are fairly stable, and in
some cases have shown an upward movement.
The components of nonperforming assets are delinquent loans,
nonperforming assets and renegotiated loans. Each component is
discussed in greater detail below. Nonperforming assets consist
of nonaccrual loans, accruing loans past due 90 days or more
delinquent, and ORE. It is the Corporation's policy to place
a loan on nonaccrual status when, in the opinion of management,
the ultimate collectibility of the principal or interest on the
loan becomes doubtful. As a general rule, a commercial loan or
real estate loan more than 90 days past due with respect to
principal or interest is classified as a nonaccrual loan.
Installment loans generally are not placed on nonaccrual status
but, instead, are charged off at 90 days past due, except where
the loans are secured and foreclosure proceedings have
commenced.
Loans are considered renegotiated if, for economic or legal
reasons, a concession has been granted to the borrower related
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to the borrower's financial difficulties that the creditor
would not otherwise consider. The Corporation has renegotiated
certain loans in instances where a determination was made that
greater economic value will be realized under new terms than
through foreclosure, liquidation, or other disposition. ORE
includes repossessed.
At the time of classification as ORE, loans are reduced to the
fair value of the collateral (if less than the loan receivable)
by charge-offs against the allowance for possible loan losses.
ORE is carried on the books at the lower of cost or fair value,
less estimated costs to sell. Subsequent valuation adjustments
to the fair value of the collateral are charged or credited to
current operations.
The following table sets forth the composition of the
Corporation's nonperforming assets and related asset quality
ratios as of the dates indicated. All of such assets were
domestic assets since the Corporation had no foreign loans.
September 30, December 31,
1996 1995
Non-accruing loans $ 994 $1,422
Renegotiated loans 1,003 517
Total non-performing loans $1,997 $1,939
Loans past due 90 days and accruing $1,885 1,125
Other real estate 2,122 2,070
Total non-performing assets $6,004 $5,134
Asset Quality Ratios
Non-performing loans to total gross loans 1.44% 1.47%
Non-performing assets to total gross loans 4.32% 3.80%
Non-performing assets to total assets 2.33% 2.03%
Allowance for possible loan losses to
non-performing loans 121.28% 120.27%
Allowance for possible loan losses to gross
loans 1.74% 2.28%
During the nine months ended September 30, 1996, gross interest
income of $146 would have been recorded on loans accounted for
on a nonaccrual basis if the loans had been current throughout
the period. No interest was included on such loans during such
period. The Corporation had no restructured loans during this
period.
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Impaired Loans - The Corporation measures its allowance for
possible loan losses using the following information. A loan
is considered impaired when it is probable that the Corporation
will be unable to collect all amounts due according to the
contractual terms of the loan agreement. These loans consist
primarily of non-accrual loans where situations exist which
have reduce the probability of collection in accordance with
contractual terms. As of September 30, 1996 the Corporation's
recorded investment in impaired loans and the related valuation
allowance calculated under SFAS No. 114 are as follows:
Recorded Valuation
Investment Allowance
Impaired loans -
Valuation allowance required $ 995 $ 512
No valuation allowance required 206 -
Total impaired loans $1,201 $ 512
This valuation allowance is included in the allowance for
possible loan losses on the Corporation's Balance Sheet
The average recorded investment in impaired loans for the
nine-month period ended September 30, 1996 was $1,400.
Interest payments received on impaired loans are recorded as
interest income unless collection of the remaining recorded
investment is doubtful in which event payments received are
recorded as reductions of principal. The Corporation
recognized interest income on impaired loans of $21 for the
nine-month period ended September 30, 1996.
Analysis of the Allowance For Possible Loan Losses
The allowance for possible loan losses is determined by
management based upon its evaluation of the known, as well as
the inherent, risks within the Corporation's loan portfolio,
and is maintained at a level considered adequate to provide for
potential loan losses. The allowance for possible loan losses
is increased by provisions charged to expense and recoveries of
prior charge-offs, and is reduced by charge-offs. In
establishing the allowance for possible loan losses, management
considers, among other factors, previous loss experience, the
performance of individual loans in relation to contract terms,
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the size of particular loans, the risk characteristics of the
loan portfolio generally, the current status and credit
standing of borrowers, management's judgment as to prevailing
and anticipated real estate values, other economic conditions
in the Corporation's market, and other factors affecting credit
quality. Management believes the allowance for possible loan
losses at September 30, 1996 of $2,422 or 121.28% of
nonperforming loans, was adequate.
The Corporation's management continues to actively monitor the
Corporation's asset quality and to charge off loans against the
allowance for possible loan losses as it deems appropriate.
Although management believes it uses the best information
available to make determinations with respect to the allowance
for possible loan losses, future adjustments may be necessary
if economic conditions differ substantially from the
assumptions used in making the initial determinations.
At September 30, 1996, the allowance for possible loan losses
increased by $90 over the amount recorded at December 31, 1995.
The following table represents transactions affecting the
allowance for possible loan losses during the nine-month period
ended September 30, 1996.
Balance at beginning of period, December 31, 1995 $2,332
Charge-offs:
Commercial, financial and agricultural 88
Real estate--mortgage 214
Installment loans to individuals 13
315
Recoveries:
Commercial, financial and agricultural 90
Real estate--mortgage 16
Installment loans to individuals 9
115
Net charge-offs 200
Provision charged to operations
during the nine-month period 290
Balance at end of period, September 30, 1996 $2,422
Ratio of net charge-offs during the
nine-month period to average loans
outstanding during that period 0.15%
Allocation of the Allowance for Possible Loan Losses
The following table sets forth the allocation of the allowance for possible
loan losses by loan category amounts, the percent of loans in each category
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to total loans in the allowance, and the percent of loans in each category
to total loans, at September 30, 1996.
Balance at September 30, 1996
applicable to:
Percent of
Loans in each
Percent of category to
Amount Allowance total loans
Commercial, financial
and agricultural $ 877 36% 31%
Real estate--mortgage 660 27% 55%
Installment loans
to individuals 307 13% 14%
Unallocated 578 24% n.a.
Total $ 2,422 100% 100%
Management has determined from continued evaluation of the
various elements of the loan portfolio, previous charge-off
experience, collateral evaluation and borrower's credit
histories, that different risks are associated with each loan
category. Accordingly, management has assigned general reserve
percentages within each loan category, in addition to specific
reserves allocated to individual loans within each category.
Treasury stock
During the third quarter of 1996, the Corporation, after having
adopted a plan in that quarter to reacquire the Corporation's
shares from time to time, reacquired 8,200 of its shares in the
market for a total cost of $120. The Corporation expects to use
the reacquired shares to assist in funding obligations under
outstanding stock options, the Dividend Reinvestment Plan and
for future stock dividends.
B. Results of Operations: Three and nine months ended
September 30, 1996 and 1995
General. The Corporation's results of operations are dependent
primarily on its net interest and dividend income, which is the
difference between interest earned on its loans and investments
and the interest paid on interest-bearing liabilities. The
Corporation's net income is also affected by the generation of
noninterest income, which primarily consists of service fees on
deposit accounts and other income. Net interest income is
determined by (I) the difference between yields earned on
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interest-earning assets and rates paid on interest-bearing
liabilities ("interest rate spread") and (ii) the relative
amounts of interest-earning assets and interest-bearing
liabilities. The Corporation's interest rate spread is
affected by regulatory, economic and competitive factors that
influence interest rates, loan demand and deposit flows and
general levels of nonperforming assets. In addition, net
income is affected by the level of operating expenses and
establishment of loan loss reserves and ORE reserves.
The operations of the Corporation and the entire banking
industry are significantly affected by prevailing economic
conditions, competition and the monetary and fiscal policies of
governmental agencies. Lending activities are influenced by
the demand for and supply of real estate, competition among
lenders, the level of interest rates and the availability of
funds. Deposit flows and costs of funds are influenced by
prevailing market rates of interest, primarily on competing
investments, account maturities and the levels of personal
income and savings in the market area.
Three and Nine Months Ended September 30, 1996. The
Corporation earned net income of $477 or $0.23 per share and
$1,481 or $0.70 per share, for the three and nine-month periods
ended September 30, 1996, compared to $521 or $0.28 per share
and $1,543 or $0.86 per share, for the same period in 1995.
The Corporation's earnings for the three and nine-month periods
ended September 30, 1996 were adversly affected by recent
legislation known as the Deposit Insurance Fund Act of 1996,
enacted to recapitalize the Savings Association Insurance Fund.
As a result of this new legislation, the Corporation was
required to estimate and record $263 before income taxes as its
portion of the assessment. Had this assessment been not
recorded, net income would have been $635 and $1,639 for the
three and nine-month periods ended September 30, 1996.
Interest income increased by $32 and $1,363 for the three and
nine-month periods ended September 30, 1996 over the
corresponding period in 1995. The increase is primarily due to
an increase in average earning assets. Other income increased
by $201 and $316 for the three- and nine-month periods ended
September 30, 1996 over the comparable period in 1995. The
majority of such increase is directly related to the general
growth of the Subsidiary Banks.
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Total interest expense increased by $109 and $740,
respectively, for the three and nine-month periods ended
September 30, 1996 over the corresponding period in the prior
year, primarily due to an increase in average rate related
liabilities. Total other expenses increased by $264 and $1,024
for the three and nine-month periods ended September 30, 1996
over the comparable period in the prior year which primarily
related to the increase in FDIC assessment. Of the total
increase for the nine-month period, $468 was attributable to
increases in salaries and employee benefits and $651 in
occupancy and equipment expense. FDIC assessment increased by
$103. The majority of these increases are related to the Family
First merger and general growth of the Subsidiary Banks.
Amortization expense of intangibles and other operating
expenses decreased by $51 and $147, respectively, for the
nine-month period ended September 30, 1996 over the comparable
period in 1995. The majority of this decrease is related to
the expenses associated with merchant card processing service
which was discontinued.
Some Specific Factors Affecting Future Results of Operations
Although future movement of interest rates cannot be predicted
with certainty, the interest rate sensitivity of the
Corporation's assets and liabilities are such that a decline in
interest rates during the next few months would have a
favorable impact on the Corporation's results of operations.
However, because overall future performance is dependent on
many other factors, past performance is not necessarily an
indication of future results and there can be no guarantee
regarding future overall results of operations.
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GREATER COMMUNITY BANCORP AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
The Corporation is party in the ordinary course of business,
to litigation involving collection matters, contract claims and
other miscelleneous causes of action arising from its business.
Management does not consider that any such proceedings depart
from usual routine litigation and in its judgement, neither the
Corporation's consolidated financial position nor its results
of operation will be affected materially by any present
proceedings.
Item 2 - Changes in Securities
None.
Item 3 - Default Upon Senior Securities
None.
Item 4 - Submission of Matters to a Vote of Security Holders
None.
Item 5 - Other information
None.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits. None.
(b) Reports on Form 8-K. See Part II, Item 6(b) of the
Form 10-QSB filed for the period ended June 30, 1996
with respect to three Forms 8-K filed during July and
August 1996. No Form 8-K was filed during the quarter
ended September 30, 1996 after the Form 8-K was filed
August 5, 1996 reporting the adoption of a plan to
reacquire the Corporation's shares from time to time.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GREATER COMMUNITY BANCORP
(Registrant)
Date: November 14, 1996 By: /s/ Naqi A. Naqvi
Naqi A. Naqvi, Treasurer
(Duly Authorized Officer and
Principal Financial Officer)
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