UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1997
------------------------------
or
[ ] 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 000-20163
-------------------------------------
FIRST PHILSON FINANCIAL CORPORATION
- -----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 25-1511866
- ------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
534 Main Street, Berlin, PA 15530
- ------------------------------- -------------------------------
(Address of principal executive (Zip code)
offices)
(Registrant's telephone number, including area code)(814)267-4666
-------------
Not Applicable
- -----------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the registrant (1) 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
----- ----
As of August 4, 1997, there were 435,600 shares outstanding of
the issuer's common stock.
1
<PAGE>
First Philson Financial Corporation
INDEX TO QUARTERLY REPORT ON FORM 10-Q
Page
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet (Unaudited) as of
June 30, 1997 and December 31, 1996 3
Consolidated Statement of Income (Unaudited) for
the Three Months and Six Months Ended June 30, 1997
and 1996 4
Consolidated Statement of Cash Flows (Unaudited) for
the Six Months Ended June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements (Unaudited) 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-13
PART II - OTHER INFORMATION 14
Item 1. Legal Proceedings
2. Changes in Securities
3. Defaults Upon Senior Securities
4. Submission of Matters to a Vote of Security Holders
5. Other Information
6. Exhibits and Reports on Form 8-K
Signatures 15
2
<PAGE>
<TABLE>
First Philson Financial Corporation
CONSOLIDATED BALANCE SHEET (Unaudited)
(Dollars in thousands)
<CAPTION>
June 30, December 31,
1997 1996
--------- ---------
<S> <C> <C>
ASSETS
Cash and due from banks $ 9,352 $ 8,916
Federal funds sold 13,400 6,500
Investment securities available for sale 7,405 579
Investment securities held to maturity
(market values of $70,123 and $78,750) 70,079 78,702
Total loans 101,731 100,654
Less allowance for loan losses 2,638 3,017
--------- ---------
Net loans 99,093 97,637
Premises and equipment, net 2,490 2,393
Accrued interest receivable 1,730 1,707
Other assets 1,457 1,231
--------- ---------
TOTAL ASSETS $205,006 $197,665
========= =========
LIABILITIES
Deposits:
Noninterest-bearing demand $ 21,624 $ 20,567
Interest-bearing demand 28,322 25,094
Savings 35,826 35,614
Money market 12,307 12,193
Time 80,965 80,012
--------- ---------
Total deposits 179,044 173,480
Securities sold under agreements to
repurchase 1,110 1,168
U. S. Treasury demand notes 1,625 845
Accrued interest payable 547 552
Other liabilities 363 421
--------- ---------
TOTAL LIABILITIES 182,689 176,466
--------- ---------
STOCKHOLDERS' EQUITY
Common stock ($10 par value, 500,000
shares authorized, 435,600 shares
issued and outstanding) 4,356 4,356
Capital surplus 11,644 2,354
Retained earnings 6,252 14,470
Net unrealized gain on securities 65 19
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 22,317 21,199
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $205,006 $197,665
========= =========
</TABLE>
See accompanying notes to the consolidated financial statements.
3
<PAGE>
<TABLE>
First Philson Financial Corporation
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(Dollars in thousands, except per share amounts)
<CAPTION>
Three Months Ended June 30,
1997 1996
------------ ------------
<S> <C> <C>
INTEREST AND DIVIDEND INCOME
Interest and fees on loans $ 2,291 $ 2,099
Interest on federal funds sold 178 83
Investment securities:
Taxable interest 996 1,130
Tax exempt interest 155 159
------------ ------------
Total interest and
dividend income 3,620 3,471
------------ ------------
INTEREST EXPENSE
Interest on deposits 1,439 1,452
Interest on borrowed funds 26 40
------------ ------------
Total interest expense 1,465 1,492
------------ ------------
NET INTEREST INCOME 2,155 1,979
Provision for loan losses - -
------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,155 1,979
------------ ------------
OTHER INCOME
Service charges on deposit accounts 148 133
Other income 94 116
------------ ------------
Total other income 242 249
------------ ------------
OTHER EXPENSE
Salaries and employee benefits 794 771
Premises and equipment expense 205 182
Other expense 446 438
------------ ------------
Total other expense 1,445 1,391
------------ ------------
Income before income taxes 952 837
Income tax expense 263 223
------------ ------------
NET INCOME $ 689 $ 614
============ ============
EARNINGS PER SHARE $ 1.58 $ 1.41
CASH DIVIDENDS PER SHARE $ 0.35 $ 0.30
WEIGHTED AVERAGE SHARES OUTSTANDING 435,600 435,600
<CAPTION>
Six Months Ended June 30,
1997 1996
------------ ------------
<S> <C> <C>
INTEREST AND DIVIDEND INCOME
Interest and fees on loans $ 4,553 $ 4,258
Interest on federal funds sold 298 173
Investment securities:
Taxable interest 1,978 2,234
Tax exempt interest 327 320
------------ ------------
Total interest and
dividend income 7,156 6,985
------------ ------------
INTEREST EXPENSE
Interest on deposits 2,840 2,925
Interest on borrowed funds 47 101
------------ ------------
Total interest expense 2,887 3,026
------------ ------------
NET INTEREST INCOME 4,269 3,959
Provision for loan losses - -
------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,269 3,959
------------ ------------
OTHER INCOME
Service charges on deposit accounts 278 248
Other income 188 186
------------ ------------
Total other income 466 434
------------ ------------
OTHER EXPENSE
Salaries and employee benefits 1,569 1,528
Premises and equipment expense 404 460
Other expense 869 851
------------ ------------
Total other expense 2,842 2,839
------------ ------------
Income before income taxes 1,893 1,554
Income tax expense 516 407
------------ ------------
NET INCOME $ 1,377 $ 1,147
============ ============
EARNINGS PER SHARE $ 3.16 $ 2.63
CASH DIVIDENDS PER SHARE $ 0.70 $ 0.60
WEIGHTED AVERAGE SHARES OUTSTANDING 435,600 435,600
</TABLE>
See accompanying notes to the consolidated financial statements.
4
<PAGE>
<TABLE>
First Philson Financial Corporation
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)
<CAPTION>
Six Months Ended June 30,
1997 1996
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 1,377 $ 1,147
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, amortization
and accretion, net 108 184
Decrease (increase) in accrued
interest receivable (23) 94
Decrease in accrued interest
payable (5) (46)
Other, net (308) (96)
------------ ------------
Net cash provided by
operating activities 1,149 1,283
------------ ------------
INVESTING ACTIVITIES
Proceeds from maturities and
repayments of investment
securities held to maturity 11,621 18,457
Purchase of investment securities
Held to maturity (2,973) (14,805)
Available for sale (6,754) (451)
Net increase in loans (1,453) (3,054)
Purchase of premises and equipment (235) (69)
Proceeds from sales of other real
estate owned - 62
------------ ------------
Net cash provided by
investing activities 206 140
------------ ------------
FINANCING ACTIVITIES
Net increase in deposits 5,564 5,681
Decrease in securities sold under
agreements to repurchase (58) (6,585)
Increase in U.S. Treasury demand
notes 780 1,059
Cash dividends paid (305) (262)
------------ ------------
Net cash provided by (used
for) financing activities 5,981 (107)
------------ ------------
Increase in cash and cash
equivalents 7,336 1,316
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 15,416 15,387
------------ ------------
CASH AND CASH EQUIVALENTS AT
END OF YEAR $ 22,752 $ 16,703
============ ============
</TABLE>
See accompanying notes to the consolidated financial statements.
5
<PAGE>
First Philson Financial Corporation
Notes to Consolidated Financial Statements (Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
- ---------------------
The consolidated financial statements include the accounts of
First Philson Financial Corporation (the "Company") and its
wholly-owned subsidiary First Philson Bank, National Association
(the "Bank"). All significant intercompany balances and
transactions have been eliminated in the consolidation.
The accompanying unaudited consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q
and therefore, do not necessarily include all information that
would be included in audited financial statements. The
information furnished reflects all adjustments which are, in the
opinion of Management, necessary for a fair statement of the
results of operations. All such adjustments are of a normal
recurring nature. The results of operations for the interim
periods are not necessarily indicative of the results to be
expected for the full year.
Reclassification of Comparative Amounts
- ---------------------------------------
Certain comparative amounts for the previous period have been
reclassified to conform to the current period classifications.
Pending Accounting Pronouncement
- --------------------------------
In June 1996, the Financial Accounting Standards Board ("FASB")
issued Statement No. 125, "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities." The
Statement provides consistent standards for distinguishing
transfers of financial assets that are sales from transfers that
are secured borrowings based on control-oriented "financial-components"
approach. Under this approach, after a transfer of financial
assets, an entity recognizes the financial and servicing assets
it controls and liabilities it has incurred, derecognizes
financial assets when control has been surrendered and
derecognizes liabilities when extinguished. The provisions of
Statement No. 125 are effective for transactions occurring after
December 31, 1996, except those provisions relating to repurchase
agreements, securities lending, and other similar transactions
and pledged collateral, which have been delayed until after
December 31, 1997 by Statement No. 127, "Deferral of the
Effective Date of Certain Provisions of FASB Statement No. 125,
an amendment of FASB Statement No. 125." The adoption of these
statements is not expected to have a material impact on financial
position or results of operations.
On March 3, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 128, "Earnings Per
Share." Statement No. 128 will become effective for the Company
beginning in December 1997. This statement re-defines the
standards for computing earnings
6
<PAGE>
per share ("EPS") previously found in Accounting Principles Board
Opinion No. 15, Earnings Per Share. Statement No. 128
establishes new standards for computing and presenting EPS and
requires dual presentation of "basic" and "diluted" EPS on the
face of the income statement for all entities with complex
capital structures. Under Statement No. 128, basic EPS is to be
computed based upon income availability to common shareholders
and the weighted average number of common shares outstanding for
the period. Diluted EPS is to reflect the potential dilution
that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock or resulted
in the issuance of common stock that then shared in the earnings
of the Company. Statement No. 128 also requires the restatement
of all prior-period EPS data presented. The Company will adopt
Statement No. 128 as of December 31, 1997 and based on current
estimates, does not believe the effect of adoption will have a
significant impact on the Company's financial position or results
of operations.
In July 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 130, "Reporting
Comprehensive Income." Statement No. 130 will become effective
for the Company beginning in December 1997. This statement
establishes standards for reporting and presentation of
comprehensive income and its components (revenues, expenses,
gains, and losses) in a full set of general purpose financial
statements. It 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
presented with the same prominence as other financial statements.
Statement No. 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. The Company will adopt Statement No. 130
as of December 31, 1997. Reclassification of financial
statements for earlier periods provided for comprehensive
purposes is required.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Financial Condition
Total assets at June 30, 1997 increased by $7,341,000 from that
reported at December 31, 1996. Increases in federal funds sold
of $6,900,000 and investment securities available for sale of
$6,826,000, were funded primarily by a decrease in investment
securities held to maturity of $8,623,000 and an increase in
total deposits of $5,564,000.
The increase in investment securities available for sale was the
result of Management's decision to invest in available for sale
securities in 1997 in order to enhance the liquidity within the
investment portfolio. The decrease in investment securities held
to maturity resulted from maturities and calls.
The increase in net loans of $1,456,000 resulted primarily from
an increase in mortgage loans, primarily fixed rate residential
and commercial real estate loans. The allowance for loan losses
decreased $379,000 or 12.56% as charge offs exceeded recoveries
for the first six months of 1997. As of June 30, 1997, the
allowance for loan losses represents 2.59% of the outstanding
loan balances as compared to 3.00% for December 31, 1996. As in
1996 and 1995, Management continues to emphasize consumer and
small business lending. This has permitted the Company to meet
the needs of the communities for which it serves.
The increase in equity capital was attributed to net earnings of
$1,377,000 and the change in net unrealized gains on available
for sale securities of $46,000, less dividend payments totaling
$305,000. During the first quarter of 1997, Management made a
decision to transfer $9,290,000 from Retained Earnings to Capital
surplus as permanent capital for the Company.
Strategic planning is a vital activity of the Board of Directors
and Management. An integral part of this planning is constant
monitoring of the market area for ways to improve the Company's
service to the market area. Utilizing an in-depth study of the
market demographics, the Board of Directors endorsed a plan to
form a consumer discount company. On May 19, 1997, Flex
Financial Consumer Discount Company ("Flex Financial") was
incorporated. Flex Financial will be operated as a solely owned
subsidiary of the Company. On July 16, 1997, the applications
for a consumer discount company license and a secondary mortgage
license were filed with the Pennsylvania Department of Banking.
The Department of Banking has up to 90 days to review the
applications and either approve or disapprove the same. Approval
was granted as of July 30, 1997 for Flex Financial to conduct
business and the appropriate licenses were received.
8
<PAGE>
Results of Operations
Comparison of Six Months Ended June 30, 1997 and 1996.
The Company's net income increased by $230,000 for the first six
months of 1997, as compared to net income for the first six
months of 1996. Effecting net income positively was an increase
in interest and dividend income of $171,000 and a decrease in
interest expense of $139,000. Negative effects to net income
consisted of an increase in income taxes of $109,000.
Net interest income for 1997 increased $310,000 from 1996 due to
an increase in interest and dividend income and a decrease in
interest expense. The increase in interest and dividend income
resulted primarily from increases in interest and fees on loans
of $295,000 and interest on federal funds sold of $125,000,
offset by a decrease in interest on investment securities of
$249,000. The increase in interest and fees on loans is
attributable to an increase in the average outstanding balance of
mortgage loans, primarily fixed rate residential and commercial
real estate loans. The increase in interest on federal funds
sold is also due to an increase in the average outstanding
balance. The decrease in interest on investment securities is
due to a decrease in the average outstanding balance. The
decrease in interest expense resulted from a reduction in
repurchase agreements and the cost of interest-bearing deposits.
Other expense increased $3,000 for 1997 from 1996, primarily as
the result of an increase in salaries and employee benefits of
$41,000, offset by a decrease in premises and equipment expense
of $56,000. The increase in salaries and employee benefits is
due to annual employee increases. The decrease in premises and
equipment expense in 1997 was the result of repairs and
maintenance at several offices during 1996.
The increase in income taxes was due to an increase in pretax
income of $339,000. The effective tax rates were 27.26% for
1997 and 26.19% for 1996.
Results of Operations
Comparison of Three Months Ended June 30, 1997 and 1996.
The Company's net income increased by $75,000 for the second
quarter of 1997, as compared to net income for the second quarter
of 1996. Effecting net income positively was an increase in
interest and dividend income of $149,000 and a decrease in
interest expense of $27,000. Negative effects to net income
consisted of increases in other expense of $54,000 and income
taxes of $40,000.
Net interest income for the second quarter of 1997 increased
$176,000 as compared to the second quarter of 1996 from an
increase in interest and dividend income and a decrease in
interest expense. The increase in interest and dividend income
resulted primarily from increases in interest and fees on loans
of $192,000 and interest on federal funds sold of $95,000, offset
by a decrease in interest on investment securities of $138,000.
The increase in interest and fees on loans from the second
quarter
9
<PAGE>
of 1996 to the second quarter of 1997 is attributable to an
increase in the average outstanding balance of mortgage loans,
primarily fixed rate residential and commercial real estate
loans. The increase in interest on federal funds sold is due to
increases in both the average outstanding balance and net yield.
The decrease in interest on investment securities is due to a
decline in the average outstanding balance. The decrease in
interest expense resulted from a reduction in repurchase
agreements and the cost of interest-bearing demand and savings
deposits.
Other expense increased for the second quarter of 1997 as
compared to that of 1996 primarily due to increases in salaries
and employee benefits and premises and equipment expense. The
increase in salaries and employee benefits is due to annual
employee increases. The increase in premises and equipment
expense resulted from an insurance reimbursement for repairs due
to minor flood damage at our Confluence office during the second
quarter of 1996.
The increase in income taxes for the second quarter of 1997 as
compared to the second quarter of 1996 was due to an increase in
pretax income of $115,000. The effective tax rates were 27.63%
for 1997 and 26.64% for 1996.
Liquidity and Cash Flows
To ensure that the Bank can satisfy customer credit needs for
current and future commitments and depository withdrawal
requirements, the Bank manages the liquidity position by ensuring
that there are adequate short-term funding sources available for
those needs. Liquid assets consist of cash and due from banks,
federal funds sold, investment securities available for sale and
investment securities held to maturity, maturing in one year or
less. The following table shows these liquidity sources, minus
short-term borrowings as of June 30, 1997 and December 31, 1996,
(dollars in thousands). Management feels that the liquidity
position is strong and adequate to cover any potential customer
withdrawals and credit needs.
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
----------- ------------
<S> <C> <C>
Cash and due from banks $ 9,352 $ 8,916
Federal funds sold 13,400 6,500
Investment securities available for sale 7,405 579
Investment securities held to maturity,
maturing in one year or less 20,831 18,512
----------- ------------
Total 50,988 34,507
Less short-term borrowings 2,735 2,013
----------- ------------
Net liquidity position $ 48,253 $ 32,494
As a percent of total assets 23.54% 16.44%
</TABLE>
10
<PAGE>
Capital Resources
Capital management is an ongoing process that consists of providing
equity for both current and future financial positioning. The
Company manages its capital to execute its strategic business plans
and support its growth and investments. During the first six
months of 1997, the Company increased its capital base by
$1,118,000 or 5.27%, primarily through retained earnings. For the
first six months of 1996, capital increased by $887,000 or 4.59%.
Bank regulatory agencies have capital adequacy and risk-based
capital adequacy guidelines by which they monitor the capital
adequacy of financial institutions and holding companies. The
Company has complied with the regulatory requirements and expects
to remain in compliance in the future.
The first measure is risk-based capital which measures the
relationship between capital, segregated between Tier 1 and Tier 2
capital, and risk-weighted assets, as defined.
Tier 1 capital generally consists of stockholders' equity,
non-cumulative perpetual preferred stock and minority interest in
consolidated subsidiaries. Tier 2 capital includes the allowance
for loan losses up to 1.25% of risk-weighted assets, cumulative
preferred stock, term subordinated debt and other hybrid capital
instruments. Total capital is reduced by such items as goodwill
and other certain intangible assets. Additionally, Tier 2 capital
cannot exceed 50% of the minimum capital requirements, which is 8%
for 1997. Risk-weighted assets are derived by applying certain
predetermined percentages, ranging from 0 to 100% to on-balance
sheet assets and off-balance sheet items based upon their defined
measure of credit risk.
The secured measure is the leverage capital ratio which evaluates
capital adequacy based upon Tier 1 capital in relation to quarterly
average assets, adjusted for the allowance for loan losses,
goodwill and certain other intangible assets. The minimum leverage
capital ratio for the highest rated institutions is 3%, with all
other institutions expected to maintain higher ratios.
Furthermore, pursuant to the Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA"), the Federal Banking Regulators
have set the minimum risk-based capital ratios for a well
capitalized banking institution at 6% Tier 1 capital, 10% total
capital and 5% leverage capital. The Company has exceeded all
these capital ratios and expects to exceed these ratios in the
future to continue to be classified as a well capitalized bank.
Management has calculated and monitored the following capital
ratios in order to assess compliance with these regulatory
guidelines for the Company at June 30, 1997 and December 31, 1996,
(dollars in thousands):
11
<PAGE>
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
--------------- -----------------
Amount Ratio Amount Ratio
-------- ------ -------- ------
<S> <C> <C> <C> <C>
Total Capital (to Weighted
Assets)
Actual $23,701 20.65% $22,588 20.34%
For Capital Adequacy Purposes 9,181 8.00 8,884 8.00
Tier 1 Capital Ratio (to
Weighted Assets)
Actual $22,252 19.39% $21,180 19.07%
For Capital Adequacy Purposes 4,590 4.00 4,442 4.00
Tier 1 Capital (to Average
Assets)
Actual $22,252 11.00% $21,180 10.58%
For Capital Adequacy Purposes 8,090 4.00 8,006 4.00
</TABLE>
Management is not aware of any current recommendations by
regulatory authorities which, if implemented, would have a material
effect on the Company's liquidity, capital resources or operations
other than what has been disclosed.
<TABLE>
<CAPTION>
SIGNIFICANT RATIOS June 30, 1997 December 31, 1996
- -------------------------- --------------- -----------------
<S> <C> <C>
Return on Average Assets
(Annualized) 1.39% 1.20%
Return on Average Equity
(Annualized) 12.73% 11.76%
Dividend Payout Ratio 22.15% 22.78%
</TABLE>
Non-performing Assets and Risk Elements
Reviews of the loan portfolio are conducted by an internal
committee quarterly and annually by an outside consultant. The
results of the outside consultant are then compared to the internal
reviews with detailed explanations of differences, if any.
Commercial loans and residential mortgages are placed on a
non-accrual status when principal and interest become 90 days past
due. Delinquent loans are reviewed monthly by senior management
and the Loan Committee of the Board. Generally, all consumer loans
and commercial loans less than $100,000 and not secured by real
estate, will be charged off at 90 days past due, while all loans
secured by real estate and in the process of foreclosure will be
charged off at 180 days past due. All commercial loans greater
than $100,000 and not secured by real estate, will be subject to
the conditions of the action plan between the Bank and the customer
to correct the default.
A loan remains on a non-accrual status until principal and interest
become current and a consistent track record of payments is
established, or it is determined to be uncollectible and is charged
off against the allowance for loan losses. A loan would be
classified as restructured when the terms have been modified,
because of deterioration in the financial position of the
borrowers, to provide for a reduction
12
<PAGE>
of either interest or principal. It is Management's opinion that
the Company did not have any loans that met the definition of a
restructured loan as of June 30, 1997 and December 31, 1996.
The following table presents information concerning non-performing
loans and assets at June 30, 1997 and December 31, 1996 (dollars in
thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------ ------------
<S> <C> <C>
Loans on non-accrual status $ 401 $ 676
Loans past due 90 days or more 371 23
------------ ------------
Total non-performing loans 772 699
------------ ------------
Other real estate 1 1
------------ ------------
Total non-performing assets $ 773 $ 700
============ ============
Non-performing loans as a percent of
total loans 0.76% 0.69%
Non-performing assets as a percent of
total loans 0.76% 0.70%
Non-performing assets as a percent of
total assets 0.38% 0.35%
</TABLE>
13
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None.
Item 2 - Changes in Securities
None.
Item 3 - Defaults upon Senior Securities
None.
Item 4 - Submission of Matters to a Vote of Security Holders
(a) Annual Meeting April 15, 1997
(b) The following directors were elected at the annual
meeting to serve for a three year term or until
mandatory retirement age is reached:
Lewis W. Berkley Gary W. Sterner
James E. Croner Earl K. Wahl, Jr.
The following directors' terms continued after the
annual meeting:
Richard P. Bulow George W. Hay
Gregory A. Croner George R. Shafer
Tommy R. Croner H. Dean White
Theodore Deskevich
The results of the annual meeting were as follows:
FOR AGAINST WITHHELD
-------- ------- --------
Lewis W. Berkley 334,341 48 101,211
James E. Croner 326,318 8,071 101,211
Gary W. Sterner 334,286 103 101,211
Earl K. Wahl, Jr. 334,161 228 101,211
Item 5 - Other Information
None.
Item 6 - Exhibits and Reports on Form 8-K
No reports have been filed for 1997.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
FIRST PHILSON FINANCIAL CORPORATION
-------------------------------------
(Registrant)
Date August 8, 1997 By /s/ George W. Hay
------------------------ ------------------------
George W. Hay
President and Chief
Executive Officer
By /s/ Theodore Deskevich
------------------------
Theodore Deskevich
Executive Vice President and
Chief Financial Officer
15
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 9,352
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 13,400
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 7,405
<INVESTMENTS-CARRYING> 70,079
<INVESTMENTS-MARKET> 70,123
<LOANS> 101,731
<ALLOWANCE> 2,638
<TOTAL-ASSETS> 205,006
<DEPOSITS> 179,044
<SHORT-TERM> 2,735
<LIABILITIES-OTHER> 910
<LONG-TERM> 0
0
0
<COMMON> 4,356
<OTHER-SE> 17,961
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<INTEREST-TOTAL> 7,156
<INTEREST-DEPOSIT> 2,840
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<EPS-PRIMARY> 3.16
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<YIELD-ACTUAL> 7.74
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</TABLE>
