<PAGE>
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 March 31, 1997
[ ] 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 - 1,886,198 shares at March 31, 1997.
Transition Small Business Disclosure Format (check one);
Yes No X
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GREATER COMMUNITY BANCORP AND SUBSIDIARIES
Form 10-QSB
INDEX
PAGE(S)
PART I - FINANCIAL INFORMATION
Item 1-Financial Statements
Condensed Consolidated Balance Sheet
March 31, 1997 (unaudited) and December 31, 1996. . . . . . . . 2
Condensed Consolidated Statements of Income
Three Months ended March 31, 1997
and 1996 (unaudited) . . . . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Cash Flows
Three Months ended March 31, 1997 and 1996 (unaudited) . . . . 4
Notes to Condensed Consolidated Financial Statements(unaudited) . 5
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . 6
PART II - OTHER INFORMATION
Items 1 through 6 . . . . . . . . . . . . . . . . . . . . . . . . . .14
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1- Financial Statements
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands, except share data)
March 31, December 31,
1997 1996
(unaudited)
ASSETS
CASH AND DUE FROM BANKS-Non-interest-bearing $ 14,554 $ 11,994
FEDERAL FUNDS SOLD 3,050 6,300
Total cash and cash equivalents 17,604 18,294
DUE FROM BANKS - Interest-bearing 4,459 4,481
SECURITIES:
Available-for-sale, at fair value 56,747 52,251
Held-to-maturity, at amortized cost 38,144 37,428
94,891 89,679
LOANS 143,992 137,410
Less - Allowance for possible loan losses 2,650 2,540
Unearned income 306 283
Net loans 141,036 134,587
PREMISES AND EQUIPMENT, net 3,050 3,203
OTHER REAL ESTATE 1,650 1,834
ACCRUED INTEREST RECEIVABLE 1,879 1,906
INTANGIBLE AND OTHER ASSETS 2,528 2,522
Total assets $267,097 $256,506
LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
Non-interest-bearing $ 58,625 $ 59,588
Interest-bearing 56,922 55,882
Savings 27,077 25,918
Time 80,605 81,854
Total deposits 223,229 223,242
ACCRUED INTEREST PAYABLE 1,720 1,466
OTHER LIABILITIES 1,815 1,590
REPURCHASE AGREEMENTS 4,623 4,159
FEDERAL FUNDS PURCHASED 9,000 -
REDEEMABLE SUBORDINATED DEBENTURES 4,891 4,988
Total Liabilities 245,278 235,445
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, 1,886,198
and 1,891,733 shares issued 1,886 1,892
Additional paid-in capital 17,653 17,841
Retained earnings 1,722 1,209
Unrealized holding gain on securities
available-for-sale 558 307
Treasury stock (0 and 12,596 shares at cost) - (188)
Total shareholders' equity 21,819 21,061
Total liabilities and shareholders' equity $267,097 $256,506
(See notes to Condensed Consolidated Financial Statements)
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GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
1997 1996
INTEREST INCOME
Loans, including fees $ 3,200 $ 3,028
Investment securities 1,435 1,354
Federal Funds sold and deposits with banks 129 141
Total interest income 4,764 4,523
INTEREST EXPENSE
Deposits 1,549 1,616
Short-term borrowings 148 153
Long-Term borrowings 109 -
Total interest expense 1,806 1,769
NET INTEREST INCOME 2,958 2,754
PROVISION FOR POSSIBLE LOAN LOSSES 115 90
Net interest income after
provision for possible loan losses 2,843 2,664
OTHER INCOME 449 746
OTHER EXPENSES
Salaries and employee benefits 1,120 1,100
Occupancy and equipment 487 530
Regulatory, professional and other fees 184 204
Office expenses 144 117
All other operating expenses 388 699
Total other expenses 2,323 2,650
Income before income taxes and
minority interest 969 760
PROVISION FOR INCOME TAXES 370 278
Income before minority interest 599 482
MINORITY INTEREST 66 -
NET INCOME 665 482
WEIGHTED AVERAGE SHARES OUTSTANDING 2,299 2,095
NET INCOME PER SHARE $0.28 $0.23
(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)
Three Months Ended
March 31
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 665 $ 482
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 251 302
Accretion of discount on securities, net (37) (77)
Accretion of discount on debentures 3 -
Provision for possible loan losses 115 90
(Gain) losses on sale of investment securities (10) -
(Increase) decrease in accrued interest receivable 27 (135)
Increase in other assets 44 (41)
Increase (decrease) in accrued expenses
and other liabilities 479 (140)
Net cash provided by operating activities 1,537 481
CASH FLOWS FROM INVESTING ACTIVITIES
Available-for-sale securities:
Purchases (8,985) (1,903)
Sales or maturities 1,963 2,278
Maturities 4,154 -
Held-to-maturity securities:
Purchases (2,058) (6,718)
Maturities - 2,689
Net (increase)decrease in interest-bearing
deposits with banks 22 (737)
Net (increase) decrease in loans (6,564) 3,378
Capital expenditure (71) (110)
Decrease in other real estate 184 -
Net cash used in investing activities (11,355) (1,123)
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in deposit accounts (13) (12,706)
Increase in repurchase agreements 9,000 _
Increase in repurchase agreements 464 899
Redeemable subordinated debentures (97) -
Dividends paid (152) (119)
Proceeds from exercise of stock options 51 -
Purchase of treasury stock (155) -
Other, net 30 33
Net cash provided by financing activities 9,128 (11,893)
NET INCREASE IN CASH AND CASH EQUIVALENTS (690) (12,535)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 18,294 29,046
CASH AND CASH EQUIVALENTS, END OF PERIOD $17,604 $16,511
(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 condensed financial
statements contain all disclosures which are necessary to present fairly the
Corporation's consolidated financial position at March 31, 1997 and the
consolidated results of operations and cash flows for three months ended
March 31, 1997 and 1996. The financial statements include all adjustments
(consisting solely 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, 1996.
DIVIDEND
During March, 1997, the Corporation's Board of Directors declared a cash
dividend of $.08 per share payable on April 30, 1997 to
shareholders of record April 15, 1997. The financial information in this
report has been adjusted to reflect the dividends payable as of March 31,
1997.
EARNINGS PER SHARE COMPUTATION
The Corporation's reported earnings per share of $0.28 and $0.23 per share
for the three-month periods ended March 31, 1997 and 1996, respectively,
both take into consideration the dilutive effects 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-month periods ended March 31, 1997 and 1996.
NEW ACCOUNTING PRONOUNCEMENT
The Financial Accounting Standard Board ("FASB") has issued a Statement of
Financial Accounting Statdard ("SFAS") No. 128, Earnings Per Share ("EPS"),
which is effective for financial statements issued after December 31, 1997.
Once effective, the new standard eliminates primary and fully diluted EPS
and instead requires presentation of basic and diluted EPS in conjunction
with the disclosure of the methodology used in computing such EPS. Basic
EPS excludes dilution and is computed by dividing income available to common
shareholders by the weighted-average common shares outstanding from the
period. Diluted EPS takes into consideration the potential dilution that
could occur if securities or other contracts to issue common stock were
exercised and converted into common stock.
The adoption of this new standard is not expected to have a material impact
on the disclosure of EPS. The effect of adopting this new standard has not
been determined.
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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 March 31, 1997 and results of operations for the
three-month periods ended March 31, 1997 and 1996 should be read in
conjunction with the Condensed Consolidated Financial Statements and related
Notes thereto included in the Corporation's latest Annual Report on Form
10-QSB and the other information herein. The information as of March 31, 1997
and for the three-month periods ended March 31, 1997 and 1996 is derived
from unaudited financial data but, in the opinion of management of the
Corporation, reflects all adjustments (consisting solely of normal recurring
adjustments) necessary for a fair presentation of the financial condition
and results of operations at those dates and for those periods. 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, ("GFB)and Bergen Commercial Bank, ("BCB").
Unless otherwise indicated, amounts indicated are in thousands, except per
share data.
A. Financial Condition: March 31, 1997 and December 31, 1996
At March 31, 1997, the Corporation's total assets were $267.1 million, an
increase of $10.6 million or 4% compared to the amount reported at December
31, 1996. Investment securities increased by $5.2 million or 6% and net
loans increased by $6.4 million or 5%.
Such increases were largely offset by an increase of $9.0 million in federal
funds purchased. Cash and cash equivalents decreased by $690 or 4%.
Investment Securities
Investment securities totaled $94.9 million at March 31, 1997, an increase
of $5.2 million or 6% compared to the amount reported at December 31, 1996.
Within the investment securities portfolio, the majority of the increase
occurred in mortgage-backed securities. Management reviews the investment
portfolio continually to achieve maximum yields without having to sacrifice
the quality of the investments. Of the total at March 31, 1997, 61% of the
investments are in U.S. Government obligations, 31% in mortgage backed
securities and the balance in municipal and other equity securities.
Under the requirements of Statement of Accounting Standard No. 115,
effective January 1, 1994 the Corporation segregated its investment
portfolio into held to maturity and available for sale. At March 31, 1997,
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 $558 net of taxes,
as a component of shareholders' equity. This was an increase of $251 from
the $307 amount recorded at December 31, 1996.
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Loan Portfolio
The Corporation's loan portfolio net of allowance for possible loan losses
at March 31, 1997 totaled $144.0 million, an increase of $6.4 million or 5%,
compared to the amount reported at December 31, 1996. The increase is
primarily due to increased loan demand for both Subsidiary Banks.
Other Real Estate
As of March 31, 1997, other real estate totaled $1.7 million, a moderate
decrease when compared to the amount reported at December 31, 1996.
Deposits
Total deposits at March 31, 1997 were $223.2 million, almost unchanged
relative to the amount reported at December 31, 1996. Of the total
deposits, time deposits accounts for 36%, savings deposits 12% and the
balance of 52% in non-interest and interest bearing demand deposits.
Liquidity
Liquidity measures the Corporation's ability to provide sufficient cash
flows for current and future financial obligations on a timely basis. The
Corporation maintains a liquidity position which it considers adequate to
provide funds to meet loan demand or the possible outflow of deposits. At
March 31, 1997, sources of liquidity include $17.6 million in cash and cash
equivalents, and $56.7 million in investment securities available for sale.
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 Federal Deposit Insurance Corporation
(FDIC) and the New Jersey Department of Banking and Insurance (Department).
Such regulators have promulgated risk-based capital guidelines which require
the Corporation and the Subsidiary Banks to maintain certain minimum capital
as a percentage of their assets and certain off-balance sheet items adjusted
for predefined credit risk factors (risk-adjusted assets).
The following table sets forth selected regulatory capital ratios for the
Corporation and the Subsidiary Banks and the required minimum regulatory
ratios at March 31, 1997:
Greater Great Bergen
Community Falls Commercial
Bancorp Bank Bank Required
Tier I leverage ratio 7.93% 6.63% 8.81% 4%
Tier I risk-based capital ratio 12.51% 11.01% 13.30% 4%
Tier I and Tier II risk-based
capital ratio 16.71% 12.27% 14.55% 8%
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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. Over the last
several years management has devoted increased resources to its lending
department to remediate problem assets and improve loan review procedures.
The senior lending officers of the Subsidiary Banks are charged with
monitoring asset quality, establishing credit policies and procedures and
seeking consistent applications of these 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 and 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 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 both loan collateral that has been formally repossessed and
collateral that is in the Corporation's possession and under its control
without legal transfer of title.
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
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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.
March 31, December 31,
1997 1996
Non-accruing loans $1,536 $ 1,033
Renegotiated loans 825 726
Total non-performing loans $2,361 $ 1,759
Loans past due 90 days and accruing $ 1,009 876
Other real estate 1,650 1,834
Total non-performing assets $ 5,020 $ 4,469
Asset Quality Ratios
Non-performing loans to total gross loans 1.64% 1.28%
Non-performing assets to total gross loans 3.49% 3.25%
Non-performing assets to total assets 1.88% 1.74%
Allowance for possible loan losses to
non-performing loans 112.24% 144.40%
Allowance for possible loan losses to
gross loans 1.84% 1.85%
The net increase in non-accruing loans of $503,000 for the three months
ended March 31, 1997 when compared to December 31, 1996, primarily due to
the addition of one loan in the amount of $566,000. The loan is guaranteed
by the Small Business Administration for up-to 75% of its value and is
further collateralized by a first mortgage. Renegotiated loans increased by
$99,000 for the same period, primarily due to a reclassification of a
non-accrual loan. During the three months ended March 31, 1997, gross
interest income of $31,000 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.
Impaired Loans - In accordance with SFAS No. 114, the Corporation utilizes
the following information when measuring its allowance for possible loan
losses. A loan is considered impaired when it is probable that the bank
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
but may include performing loans to the extent that situations arise which
would reduce the probability of collection in accordance with contractual
terms. As of March 31, 1997 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
(in thousands)
Impaired loans -
Valuation allowance required $1,243 $ 346
No valuation allowance required - -
Total impaired loans $1,243 $ 346
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This valuation allowance is included in the allowance for possible loan
losses on the Corporation's statement of condition.
The average recorded investment in impaired loans for the three-month period
ended March 31, 1997 was $1.7 million.
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 $11,000 for the
three-month period ended March 31, 1997.
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, 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 March 31, 1997
of $2.7 million or 112% 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.
<PAGE>
At March 31, 1997, the allowance for possible loan losses increased by $110
over the amount recorded at December 31, 1996. The following table
represents transactions affecting the allowance for possible loan losses
during the three-month period ended March 31, 1997.
Balance at beginning of period, December 31, 1996 $2,540
Charge-offs:
Commercial, financial and agricultural 18
Real estate--mortgage -
Installment loans to individuals 1
Credit cards and related plans 7
26
Recoveries:
Commercial, financial and agricultural 18
Real estate--mortgage 0
Installment loans to individuals 3
21
Net charge-offs <5>
Provision charged to operations
during the three-month period 115
Balance at end of period, March 31, 1997 $2,650
Ratio of net charge-offs during the
three-month period to average loans
outstanding during that period -
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
to total loans in the allowance, and the percentage of loans in each
category to total loans, at March 31, 1997.
Balance at March 31, 1997
applicable to: Percentage of
Loans in each
Percentage category to
Amount of Allowance total loans
Commercial $ 945 36% 52%
Real estate construction 337 12% 4%
Real estate--mortgage 464 18% 32%
Installment loans to individuals 729 27% 12%
Unallocated 175 7% -
Total $2,650 100% 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.
<PAGE>
B. Results of Operations: Three-Months ended March 31, 1997
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 non-interest 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 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
non-performing 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 Months Ended March 31, 1997. The Corporation earned net income of
$665 or $0.28 per share for the three months ended March 31, 1997, compared
to $482 or $0.23 per share for the same period in 1996.
Interest income increased by $241 or 5% for the three months ended March 31,
1997 relative to the comparable period in 1996. The increase is attributable
primarily to the increase in average income-yielding assets. Other income
decreased by $297 or 40% in the first quarter of 1997 compared to the same
period in 1996. The decrease in other income is a direct result of the
reduction in fee income from merchant credit card services which was
discontinued by BCB.
Total interest expense increased by $37 during the first three months of
1997 relative to the first three months of 1996. The majority of such
increase is related to the increase in interest expense related to the
increase in federal funds borrowing. Total other expenses decreased by $327
during the first three months of 1997 compared to the same period in 1996
primarily as a result of management's efforts to consolidate various
operational functions of the Subsidiary Banks.
The provision for possible loan losses for the three months ended March 31,
1997 was $115,000 compared to $90,000 during the first three months of the
prior year. Management increased the provision primarily as a result of the
increased loan portfolio.
<PAGE>
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.
NEW ACCOUNTING PRONOUNCEMENT
The Financial Accounting Standard Board ("FASB") has issued a Statement of
Financial Accounting Statdard ("SFAS") No. 128, Earnings Per Share ("EPS"),
which is effective for financial statements issued after December 31, 1997.
Once effective, the new standard eliminates primary and fully diluted EPS
and instead requires presentation of basic and diluted EPS in conjunction
with the disclosure of the methodology used in computing such EPS. Basic
EPS excludes dilution and is computed by dividing income available to common
shareholders by the weighted-average common shares outstanding from the
period. Diluted EPS takes into consideration the potential dilution that
could occur if securities or other contracts to issue common stock were
exercised and converted into common stock.
The adoption of this new standard is not expected to have a material impact
on the disclosure of EPS. The effect of adopting this new standard has not
been determined.
<PAGE>
GREAT FALLS BANCORP AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
The Corporation and its subsidiaries are parties in the ordinary course of
business to litigation involving collection matters, contract claims and
other miscellaneous causes of action arising from their 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 operations 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
The Corporation's annual meeting of stockholders (the "1997 Annual Meeting")
was held on April 15, 1997. The following actions were taken at the 1997
Annual Meeting:
1. Election of Directors: In accordance with the nominations described in
the Corporation's definitive Proxy Statement dated March 14, 1997 (the
"1997 Proxy Statement"), previously filed with the Commission, three
nominees, namely, M.A. Bramante, Robert J. Conklin and William T.
Ferguson were elected at the 1997 Annual Meeting as Directors for
three-year terms expiring in 2000, and until the election and
qualifications of their respective successors.
The voting was as follows:
Name of Nominee Votes for Votes Against Votes Withheld
M.A. Bramante 1,458,488 - 666
Robert J. Conklin 1,458,488 - 666
William T. Ferguson 1,458,522 - 632
The names of the other Directors of the Corporation whose terms of
office as Director continue after the 1997 Annual Meeting (and the
year in which their respective terms will expire) are as follows:
Anthony M. Bruno, Jr. (1998), George E. Irwin (1998), Alfred R.
Urbano (1998), C. Mark Campbell (1999), Joseph A. Lobosco (1999),
John L. Soldoveri (1999) and Charles J. Volpe (1999).
Item 5 - Other information
None.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits. The following exhibit is filed with this Report.
Exhibit No. Description
27 Financial Data Schedule
(b) Reports on Form 8-K. No reports on Form 8-K were filed during
the quarter ended March 31, 1997.
<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: May 5, 1997 By:\Naqi A. Naqvi
Naqi A. Naqvi, Treasurer
(Duly Authorized Officer and
Principal Financial Officer)
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