<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996
-------------
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 0-14379
-------
EAGLE BANCSHARES, INC.
----------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Georgia 58-1640222
------------------------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
4305 Lynburn Drive, Tucker, Georgia 30084-4441
----------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(770) 908-6690
----------------------------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Not Applicable
------------------------------------------------
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED
SINCE LAST REPORT.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No NOT APPLICABLE
---- ----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at July 31, 1996
-------------------- --------------------------------------
Common Stock, $1.00 Par Value 4,552,200 shares
Index of Exhibit on Page 25
<PAGE> 2
EAGLE BANCSHARES, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
<S> <C>
PART I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Income -
Three months ended June 30, 1996 and 1995 3
Consolidated Statements of Financial Condition at
June 30, 1996 and March 31, 1996 4
Consolidated Statements of Cash Flows -
Three months ended June 30, 1996 and 1995 5
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. Other Information
Item 1. Legal Proceedings 22
Item 2. Changes in Securities 22
Item 3. Defaults upon Senior Securities 22
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 5. Other Information 23
Item 6. Exhibits and Reports on Form 8-K 23
Signatures 24
Index of Exhibits 25
</TABLE>
2
<PAGE> 3
EAGLE BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
(Unaudited) Three Months Ended
(in thousands except per share data) June 30,
1996 1995
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
INTEREST INCOME:
Interest on loans $ 10,022 $ 8,376
Interest on mortgage-backed securities 1,385 439
Interest on investment securities and other interest earning assets 1,321 1,177
- ------------------------------------------------------------------------------------------------
Total interest income 12,728 9,992
- ------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
Interest on deposits 4,750 3,782
Interest on borrowings 2,082 1,867
- ------------------------------------------------------------------------------------------------
Total interest expense 6,832 5,649
- ------------------------------------------------------------------------------------------------
Net interest income 5,896 4,343
PROVISION FOR LOAN LOSSES 524 -
- ------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses 5,372 4,343
- ------------------------------------------------------------------------------------------------
OTHER INCOME:
Mortgage production fees 1,338 1,065
Service charges 229 157
Gain on sale of loans 25 -
Gain on sale of real estate held for development and sale 371 -
Miscellaneous 467 474
- ------------------------------------------------------------------------------------------------
Total other income 2,430 1,696
- ------------------------------------------------------------------------------------------------
OTHER EXPENSES:
Salaries and employee benefits 3,554 2,704
Net occupancy expense 683 499
Federal insurance premium 200 160
Marketing expense 187 102
Data processing 252 266
Miscellaneous 1,125 651
- ------------------------------------------------------------------------------------------------
Total other expenses 6,001 4,382
- ------------------------------------------------------------------------------------------------
Income before income taxes 1,801 1,657
INCOME TAX EXPENSE 502 590
- ------------------------------------------------------------------------------------------------
Net income $ 1,299 $ 1,067
- ------------------------------------------------------------------------------------------------
EARNINGS PER SHARE $ .29 $ .35
- ------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 4
EAGLE BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(in thousands except per share data)
<TABLE>
<CAPTION>
JUNE 30, March 31,
1996 1996
<S> <C> <C>
ASSETS:
Cash and amounts due from banks $ 9,376 $ 7,477
Interest-bearing deposits 2,575 339
Securities available for sale 77,327 79,512
Investment securities held to maturity 59,437 55,341
Loans held for sale 94,074 92,552
Loans receivable, net 334,289 334,505
Stock in Federal Home Loan Bank, at cost 7,376 8,565
Premises and equipment, net 11,962 11,033
Real estate held for development and sale 14,496 12,962
Real estate acquired in settlement of loans, net 1,027 907
Accrued interest receivable 4,359 4,124
Deferred income taxes 980 597
Other assets 4,196 3,598
--------- ---------
Total assets $ 621,474 $ 611,512
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $ 386,726 $ 348,098
Advance payments by borrowers for property taxes and insurance 1,890 1,511
Federal Home Loan Bank advances and other borrowings 143,401 173,060
Drafts outstanding 26,301 24,423
Accrued expenses and other liabilities 5,925 7,245
--------- ---------
Total liabilities $ 564,243 $ 554,337
--------- ---------
STOCKHOLDERS' EQUITY:
Common stock, $1 par value; 10,000,000 shares authorized,
4,854,000 shares issued at June 30 and March 31, 1996 4,854 4,854
Additional paid-in capital 28,331 28,331
Retained earnings 27,312 26,696
Net unrealized (loss) gain on securities available for sale, net of taxes (1,094) (495)
Employee Stock Ownership Plan note payable (1,000) (1,000)
Unamortized restricted stock (96) (135)
Treasury stock, 301,800 shares at cost (1,076) (1,076)
--------- ---------
Total stockholders' equity 57,231 57,175
--------- ---------
Total liabilities and stockholders' equity $ 621,474 $ 611,512
--------- ---------
</TABLE>
4
<PAGE> 5
EAGLE BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months ended June 30, 1996 1995
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,299 $ 1,067
Adjustments to reconcile net income to net cash used in operating
activities:
Depreciation, amortization and accretion 300 913
Provision for loan losses 524 -
Loss (gain) on sale of real estate acquired in settlement of loans (3) 11
Gain on sale of real estate held for development and sale (371) -
Gain on sale of loans (25) -
Amortization of restricted stock award 39 40
Amortization of deferred loan fees (464) (424)
Proceeds from sale of loans held for sale 156,947 80,528
Originations of loans held for sale (158,469) (87,677)
Changes in assets and liabilities:
(Increase) decrease in accrued interest receivable (235) (240)
Decrease (increase) in other assets (537) (1,775)
Increase (decrease) in drafts outstanding 1,878 9,460
Increase (decrease) in accrued expense and other liabilities (1,411) 794
- ----------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities (528) 2,697
- ----------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investment securities available for sale - 464
Purchases of investment securities held to maturity (5,000) -
Principal payments received on investments available for sale 1,197 447
Principle payments received on investments held to maturity 921 836
Loan originations, net of repayments 193 (15,403)
Purchases of loans receivable (139) -
Proceeds from sale of real estate acquired in settlement of
loans 10 58
Purchases of FHLB stock (1,165) (307)
Redemption of FHLB stock 2,354 -
Purchase of premises and equipment, net (1,172) (1,506)
Additions to real estate held for development and sale (2,677) (2,298)
Proceeds from sale of real estate held for development and sale 1,385 -
- ----------------------------------------------------------------------------------------------
Net cash (used in) provided by investing activities $ (4,093) $(17,709)
- ----------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 6
EAGLE BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months ended June 30, 1996 1995
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in time deposits $ 40,772 $ 22,100
Net change in demand deposit accounts (2,144) (2,661)
Repayment of FHLB advances and other borrowings (72,803) (87,787)
Proceeds from FHLB advances and other borrowings 43,144 84,959
Dividends paid (592) (386)
Principal reduction of ESOP debt - 11
Proceeds from exercise of stock options - 110
Increase (decrease) in advance payments from borrowings for
property taxes and insurance 379 43
- -----------------------------------------------------------------------------------------------
Net cash (used in) provided by financing activities 8,756 16,389
- -----------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS 4,135 1,377
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 7,816 6,358
- -----------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 11,951 $ 7,735
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH PAID DURING PERIOD FOR:
- -----------------------------------------------------------------------------------------------
Interest $ 7,040 $ 5,739
- -----------------------------------------------------------------------------------------------
Income Taxes $ 119 $ 530
- -----------------------------------------------------------------------------------------------
Supplemental schedule of noncash investing and financing
activities:
- -----------------------------------------------------------------------------------------------
Acquisition of real estate in settlement on loans $ 181 $ 258
- -----------------------------------------------------------------------------------------------
Loans made to finance real estate $ 54 $ 295
- -----------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 7
Eagle Bancshares, Inc. and Subsidiaries
Notes to Interim Unaudited Consolidated Financial Statements
June 30, 1996
A. Basis of Presentation:
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions for preparation of the Securities and
Exchange Commission Form 10-Q. Accordingly, they do not include all of the
information and disclosures required for fair presentation in accordance with
generally accepted accounting principles. These financial statements should
therefore be read in conjunction with management's discussion and analysis of
financial condition and results of operations included in this report and the
complete annual report for the year ended March 31, 1996, which has been filed
with the Company's most recent Form 10-K. In the opinion of management, all
eliminations and normal recurring adjustments considered necessary for fair
presentation have been included. Operating results for the three month period
ended June 30, 1996, are not necessarily indicative of the results that may be
expected for the fiscal year ending March 31, 1997.
B. Reclassification of Prior Period Amounts:
Certain reclassifications have been made in the Company's financial statements
for the prior fiscal period to conform to the classifications used in the
financial statements for the current fiscal period.
C. Proposed Legislation
A number of legislative proposals have been introduced during the last twelve
months in both the United States House and the Senate that contain provisions
to recapitalize the Savings Association Insurance Fund (SAIF) by means of a
one-time assessment on the deposits of all depository institutions the accounts
of which are insured by the SAIF. Each of the separate legislative proposals
would resolve the current premium disparity between the SAIF and the Bank
Insurance Fund and contemplate the merger of the two Funds following the
recapitalization. As a SAIF insured institution the Bank would be subject to
the one-time assessment should any of legislative proposals be enacted.
D. Recent Development
On August 13, 1996 Eagle Bancshares, Inc. and Southern Crescent Financial Corp
today announced that they have signed a definitive agreement pursuant to which
Eagle will acquire Southern Crescent Financial Corp and its wholly owned
subsidiary, Southern Crescent Bank. Eagle is the holding company for Tucker
Federal Bank, the second largest independent financial institution
headquartered in metropolitan Atlanta. Southern Crescent Bank has total assets
of approximately $130 million.
The acquisition of Southern Crescent will increase Eagle's total assets to
approximately $750 million and will strengthen Eagle's presence in the fast
growing, south metropolitan Atlanta market. The merger, which will be accounted
for as a pooling of interest, is expected to be completed during the first
quarter of 1997 and is subject to regulatory approval, shareholder approvals
and certain other conditions. The net value of the transaction is expected to
be $18 million. At June 30, 1996, Southern Crescent Financial Corp had a book
value of $9.3 million and net income for the six and twelve months ended of
$614,408 and $1,336,000, respectively.
7
<PAGE> 8
Shareholders of Southern Crescent Financial Corp will receive Eagle Bancshares'
common stock equal to $19.177 per share provided the average market value of
Eagle stock is between $14.50 and $16.50 per share during a 30-day trading
period prior to closing. If the average market value of Eagle stock is less
than $14.50 per share, Southern Crescent shareholders will receive 1.323 shares
of Eagle stock for each share of Southern Crescent. If the average market value
of Eagle stock is more than $16.50 per share, Southern Crescent shareholders
will receive 1.162 shares of Eagle stock. Eagle, at its option, may terminate
the transaction in the event the average market value of Eagle stock is more
than $17.50. Southern Crescent, at its option, may terminate the transaction if
the average market value of Eagle stock is less than $14.00 per share.
Southern Crescent Bank, headquartered in Morrow, Georgia, operates commercial
banking facilities in Morrow, Union City and Palmetto, Georgia. Southern
Crescent Bank has received regulatory approval to open additional branches in
Jonesboro and McDonough, Georgia.
8
<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
SUMMARY FINANCIAL DATA
(dollars in thousands except per share data)
<TABLE>
<CAPTION>
% Change
Quarter Ended June 30, 1996 from
June 30, March 31, June 30, March 31, June 30,
For the quarter: 1996 1996 1995 1996 1995
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net income $ 1,299 $ 1,260 $ 1,067 3.10 21.74
Per common share:
Net income .29 .33 .35 (12.12) (17.14)
Dividends declared .15 .13 .125 15.38 16.67
Book value per share 12.57 12.56 11.17 .08 12.53
Average common shares outstanding 4,552 3,801 3,063 19.76 48.61
Profitability ratios: (%)
Return on average assets .85 .88 .91 (3.41) (6.59)
Return on average equity 8.46 10.66 9.09 (20.64) (6.93)
Efficiency ratio 72.07 68.77 72.56 5.13 (.66)
Net interest margin 4.20 3.77 4.04 11.41 3.96
Equity to assets 9.21 9.35 7.16 (1.50) 28.63
At quarter end:
Loans held for sale $ 94,074 $ 92,552 $ 48,369 1.64 94.49
Loans receivable, net 334,289 334,505 319,553 (.06) 4.61
Reserve for loan losses 3,728 4,176 3,388 (10.73) 10.04
Assets 621,474 611,512 485,337 1.63 28.05
Deposits 386,726 348,098 305,754 11.10 26.48
FHLB advances 143,401 173,060 117,125 (17.14) 22.43
Stockholders' equity 57,231 57,175 34,748 .10 64.70
</TABLE>
Overview
Net income for the first quarter of fiscal 1997 was $1,299,000 compared with
$1,067,000 in the first quarter of fiscal 1996, an increase of 21.74%. First
quarter results were higher than a year ago, reflecting an increase in net
interest income of $1,553,000, a 35.76% increase.
Per share earnings for the first quarter of fiscal 1997 were $.29 per share,
compared with $.35 per share in the first quarter of fiscal 1996, a 17.14%
decrease. Earnings per share decreased even though net income rose due to an
increase in the number of shares outstanding resulting from the Company's
secondary offering of common stock during the fourth quarter of the prior year.
Return on average assets (ROA) was .85% and return on average common equity
(ROE) was 8.46% in the first quarter of fiscal 1997, compared with .91% and
9.09%, respectively, in the same quarter of fiscal 1996. ROA decreased due to
the Company's rapid asset growth. ROE declined due to the issuance of $21.5
million of additional capital in connection with the offering of 1,300,000 of
common stock effective February 15, 1996.
9
<PAGE> 10
Net interest income was $5,896,000 and $4,343,000 for the first quarter of
fiscal 1997 and 1996, respectively. The Company's net interest margin for the
first quarter of 1997 was 4.20%, compared with 4.04% for the same quarter last
year. The increase in net interest income is primarily due to the growth in
interest earning assets.
The provision for loan losses was $524,000 and $0 for the first quarter of
fiscal 1997 and 1996, respectively. The increase in the provision is due to the
increase in the Company's non-performing assets and potential problem loans.
Non-performing assets and potential problem loans as a percent of total assets
were 1.52%, 1.35% and .39% at June 30, 1996, March 31, 1996 and June 30, 1995,
respectively.
Non-interest income for the first quarter of fiscal 1997 was $2,430,000
compared with $1,696,000 for the first quarter last year, an increase of
43.28%. The primary reason was due to an increase in mortgage production fees.
Non-interest expense for the first quarter of fiscal 1997 was $6,001,000
compared with $4,382,000 for the first quarter last year, an increase of
36.95%. The primary reason was due to increases in personnel costs and
miscellaneous expense.
The Company's effective tax rate for the first quarter of fiscal 1997 was
27.87% compared to 35.61% for the same quarter last year. The decrease is due
to the Company receiving the benefit of low income housing tax credits.
EARNINGS ANALYSIS
Net Interest Income
Net interest income increased by $1,553,000 or 35.76% to $5,896,000 in the
first quarter of fiscal 1997 from $4,343,000 for the same period last year.
This increase resulted from growth in interest earning assets primarily through
loan originations. The net interest spread (the difference between the yield
earned on interest earning assets and the cost of interest bearing liabilities)
improved 11 basis points to 385 basis points from 374 basis points in the same
period last year. The primary reason for the improvement was the decrease in
the cost of interest bearing liabilities. Yield on interest earning assets
declined 20 basis points to 8.98% from 9.18% while the cost of interest bearing
liabilities declined 31 basis points to 5.13% from 5.44%.
Interest income received on loans increased $1,646,000 or 19.65% to $10,022,000
for the first quarter of fiscal 1997 from $8,376,000 million in fiscal 1996.
The increase in interest received on loans was primarily attributable to growth
in the loan portfolio through originations of residential construction loans
and conforming single family loans held for sale. The yield on the loan
portfolio remained consistent at 9.48% for the quarter compared to 9.46% in the
same quarter last year. Interest received on mortgage backed securities
increased $946,000 or 215.49% to $1,385,000 million for the first quarter of
fiscal 1997 from $439,000 in the first quarter of fiscal 1996. This increase is
primarily due to purchases of mortgage backed securities
10
<PAGE> 11
for the available for sale portfolio. Interest received on securities increased
$144,000 or 12.23% to $1,321,000 in fiscal 1997 from $1,177,000 in the prior
period.
Interest expense increased $1,183,000 or 20.94% to $6,832,000 for the first
quarter of fiscal 1997 from $5,649,000 in the first quarter of fiscal 1996.
This is primarily the result of growth in deposits and FHLB advances. Interest
expense on deposits increased $968,000 or 25.59% to $4,750,000 from $3,782,000
in the same period in the prior year. The cost of deposits remained stable at
5.09% during the quarter from 5.08% in the prior period. Interest expense on
FHLB advances and other borrowings also increased $215,000 or 11.52% to
$2,082,000 for the first quarter of fiscal 1997 from $1,867,000 in the first
quarter of fiscal 1996. The Bank's cost of FHLB advances decreased 114 basis
points to 5.21% from 6.35% in the same period in the prior year. The Bank
utilizes short term FHLB advances to fund construction loans and loans held for
sale.
Interest Rate Sensitivity
Net interest income on a taxable-equivalent basis expressed as a percentage of
average total assets is referred to as the net interest margin. The net
interest margin represents the average net effective yield on earning asserts.
The net interest margin increased to 4.20% during the first quarter of fiscal
1997 from 4.04% during the first quarter of fiscal 1996. The average balance
sheet on the next page presents the individual components of net interest
income and expense, net interest spread and net interest margin. The increase
in the net interest margin in the first quarter of fiscal 1997 was primarily
attributable to the decrease in the cost of interests bearing liabilities. The
yield earned on average loans remained consistent at 9.48% compared to 9.46%.
This is attributable to the Company's ability to expand its loan portfolio
through originations of loans held for sale and construction loans. In
addition, the costs of deposits increased due to the change in the mix of
average deposits with a shift from lower costing passbook and money market
accounts to longer term certificates of deposits. The Company also relies on
borrowing from the FHLB to fund asset growth and the cost of FHLB advances
decreased 114 basis points to 5.21% during the first quarter of fiscal 1997
from 6.35% in the same period last year.
The following table reflects the average balances, the interest income or
expense and the average yield and cost of funds of the Company's interest
earning assets and interest bearing liabilities during the quarters ended June
30, 1996 and 1995:
11
<PAGE> 12
AVERAGE BALANCE SHEET
Quarter ended June 30,
<TABLE>
<CAPTION>
1996 1995
AVERAGE YIELD/ Average Yield/
(dollars in thousands) BALANCE INTEREST COST Balance Interest Cost
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earning Assets
- ---------------------------------------------------------------------------------------------------------
Loans* $422,925 $10,022 9.48% $354,153 $ 8,376 9.46%
Mortgage-backed securities 75,123 1,385 7.37% 23,663 439 7.42%
FHLB stock 8,436 152 7.21% 6,172 112 7.26%
Taxable investments 28,569 616 8.62% 33,602 626 7.45%
Tax-exempt investment securities 35,127 638 7.26% 20,300 508 10.01%
Interest earning deposits and Federal funds 2,072 33 6.37% 1,163 18 6.19%
- ---------------------------------------------------------------------------------------------------------
Total interest earning assets 572,253 12,846 8.98% 39,053 10,079 9.18%
Non-interest earning assets 41,892 30,448
- ---------------------------------------------------------------------------------------------------------
Total assets $614,145 $469,502
- ---------------------------------------------------------------------------------------------------------
Interest-bearing liabilities
- ---------------------------------------------------------------------------------------------------------
Passbook accounts $ 42,304 $ 260 2.46% $ 42,972 $ 259 2.41%
NOW 32,331 134 1.66% 27,959 122 1.75%
Money market 8,972 49 2.18% 10,833 63 2.33%
Certificates of deposit 289,647 4,307 5.95% 215,759 3,329 6.17%
- ---------------------------------------------------------------------------------------------------------
Total deposits 373,254 4,750 5.09% 297,523 3,782 5.08%
Advances 159,863 2,082 5.21% 117,660 1,867 6.35%
- ---------------------------------------------------------------------------------------------------------
Total interest bearing liabilities 533,117 6,832 5.13% 415,182 5,649 5.44%
Non-interest bearing liabilities 23,401 19,957
Stockholders' equity 57,626 34,362
- ---------------------------------------------------------------------------------------------------------
Total liabilities and equity $614,145 $469,502
- ---------------------------------------------------------------------------------------------------------
Net interest rate spread $ 6,014 3.85% $ 4,430 3.74%
Taxable-equivalent adjustment (118) (87)
- ---------------------------------------------------------------------------------------------------------
Net interest income, actual
Net interest earning assets/net interest margin $ 39,135 $ 5,896 4.20% $ 23,871 $ 4,343 4.04%
Interest earning assets as a percentage of
interest bearing liabilities 107.34% 105.75%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
*Non-accrual loans are included in average balances and income on such loans,
if recognized, is recorded on a cash basis.
Non-Interest Income
Non-interest income increased by $734,000 or 43.28% to $2,430,000 for the first
quarter of 1997 from $1,696,000 for the same period last year. Mortgage
production fees are the largest component of non-interest income and such fees
increased $273,000 or 25.63% to $1,338,000 compared to $1,065,000 in the first
quarter of fiscal 1996. The volume of loans sold in the secondary market
increased to $156,947,000 during the first quarter of fiscal 1997 compared to
$80,528,000 in the same quarter last year. In addition, the margin earned on
these loans (mortgage production fees divided by mortgage volume sold)
decreased to 85 basis points in the current period compared to 132 basis points
in the first quarter of fiscal 1996. The primary reason for the decreased
margin was the rapid rise in interest rates in March 1996 causing the Company
to receive a lower than anticipated price for loans sold in the secondary
market.
During the quarter, the Company sold 45 lots and recorded $371,000 of gain on
sale of real estate held for development and sale.
12
<PAGE> 13
Service charges increased $72,000 or 45.86% to $229,000 in the first quarter of
fiscal 1997 compared to $157,000 in the first quarter of fiscal 1996. This is
the result of growth in the number of checking accounts during the year.
Non-Interest Expense
Non-interest expense increased by $1,619,000 or 36.95% to $6,001,000 for the
first quarter of fiscal 1997 from $4,382,000 for the first quarter of fiscal
1996. The Company's efficiency ratio was 72.07% for the first quarter of fiscal
1997 compared to 72.56% for the same period last year. In general the increase
in all categories of non-interest expense is attributable to the Company's
rapid growth. The dollar amount of total assets to non-interest expense
decreased to $25.89 in the first quarter of fiscal 1997 from $27.69 for the
same period last year.
Salaries and employee benefits increased $850,000 or 31.43% to $3,554,000 for
the first quarter of fiscal 1997 from $2,704,000 for the same period last year.
This increase is due to the addition of employees to support the Company's
growth. Occupancy expense increased $184,000 or 36.87% to $683,000 in the first
quarter of fiscal 1997 from $499,000 in the first quarter of 1996. Federal
insurance premiums increased 25.00% or $40,000 during the quarter to $200,000
from $160,000 in the same quarter last year. The increase is a function of the
Company's deposit growth. The Bank pays $.23 per one-hundred dollar of deposits
as premiums to the Savings Association Insurance Fund, which is significantly
higher than premiums on deposits insured by the Bank Insurance Fund.
Miscellaneous expenses increased $474,000 or 73.81% to $1,125,000 for the first
quarter of fiscal 1997 from $651,000 in the first quarter of fiscal 1996. This
increase is due to increases in office supplies, telephone and communications,
and consulting and attorney fees due to the Company's expansion. Over the
course of the previous year, the Company has opened two retail banking offices
in metropolitan Atlanta, one in Cherokee County to serve the Towne Lake
community and one in Alpharetta, to serve the North Fulton and Forsyth County
markets. In addition, a third retail banking office is scheduled to open in
July 1996 in Lawrenceville to serve the Gwinnett County market. The Company has
also opened two loan origination branches, one in Cumming, Georgia and one in
Charlotte, North Carolina.
BALANCE SHEET ANALYSIS
Investment Securities
During the first quarter of fiscal 1997, investment securities increased to
$136.8 million from $134.9 million and $77.1 million at March 31, 1996 and June
30, 1995, respectively. The Company classifies its securities in one of three
categories in accordance with Statement of Financial Accounting Standards
(SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity
Securities": trading, available for sale, or held to maturity. With the
adoption of SFAS No. 115, the Company has reported the effect of the change in
the method of accounting for investments in debt securities classified as
available for sale as a separate component of equity, net of income taxes. The
Company has no trading securities.
13
<PAGE> 14
The investment securities portfolio at June 30, 1996, was comprised of $59.4
million of investment securities held to maturity at amortized cost compared to
$55.3 million and $56.6 million at March 31, 1996 and June 30, 1995,
respectively. The Company has the ability and it is the management's intent to
hold these securities to maturity for investment purposes. In addition,
investment securities available for sale had an estimated market value of
$77.3 million at June 30,1996 compared to $79.5 million and $20.4 million at
March 31, 1996 and June 30, 1995, respectively. Investment securities available
for sale had a net unrealized loss as shown in the Company's stockholders'
equity section of $1.1 million at June 30, 1996 versus $495,000 at March 31,
1996.
Included in other securities at June 30, 1996 and March 31, 1996, are $3.4
million and $3.7 million, respectively, of investment grade residential
mortgage pass through certificates issued by the RTC. The Company holds no
investment securities by any single issuer, other than mortgage-backed
securities issued by an agency of the United States government, which equaled
or exceeded 10% of stockholders' equity at June 30, 1996, March 31, 1996 or
June 30, 1995.
The following table reflects securities held in the Bank's securities portfolio
for the periods indicated:
INVESTMENT SECURITIES
(dollars in thousands)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
June 30, March 31, June 30,
1996 1996 1995
<S> <C> <C> <C>
- -------------------------------------------------------------------------
Investment Securities Held to Maturity:
US Treasury and US Government Agencies $ 32,458 $ 27,450 $24,827
Mortgage-backed securities 7,563 8,087 9,166
Corporate bonds 8,425 8,420 10,382
Other debt securities 10,991 11,384 12,245
- -------------------------------------------------------------------------
Total $ 59,437 $ 55,341 $56,620
- -------------------------------------------------------------------------
Securities Available for Sale:
Mortgage-backed securities $ 65,811 $ 67,855 $13,925
Corporate Bonds 2,008 2,028 -
Equity securities - preferred stock 9,508 9,629 6,515
- -------------------------------------------------------------------------
Total $ 77,327 $ 79,512 $20,440
- -------------------------------------------------------------------------
Total Investment Securities:
US Treasury and US Government Agencies $ 32,458 $ 27,450 $24,827
Mortgage-backed securities 73,374 75,942 23,091
Corporate bonds 10,433 10,448 10,382
Other debt securities 10,991 11,384 12,245
Equity securities - preferred stock 9,508 9,629 6,515
- -------------------------------------------------------------------------
Total $136,764 $134,853 $77,060
- -------------------------------------------------------------------------
</TABLE>
Loan Portfolio and Concentration
Loans receivable, net, including loans held for sale, increased $60,441,000 to
$428,363,000 at June 30, 1996 compared to $367,922,000 at June 30, 1995. The
primary reason is due to the increase in loans held for sale. The Company has
15 loan production offices throughout the southeast that originate single
family conforming loans and construction and acquisition and development loans.
Loans held for sale increased 95.10% over the previous year and have
14
<PAGE> 15
remained stable since March 31, 1996. Construction loans have increased 21.55%
over the previous year and have also remained stable since March 31, 1996. The
Company has also increased its originations of home equity, second mortgages
and consumer loans and anticipates this trend will continue.
LOAN PORTFOLIO MIX
<TABLE>
<CAPTION>
% Change
June 30,1996 from
June 30, March 31, June 30, March 31, June 30,
(dollars in thousands) 1996 1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Real Estate - construction loans
Construction $159,221 $158,670 $130,988 0.35 21.55
Acquisition & Development 28,725 30,419 28,806 (5.57) (0.28)
Real Estate - mortgage loans
Non-Residential 14,619 15,176 16,309 (3.67) (10.36)
Residential 152,246 152,331 156,196 (0.06) (2.53)
Home equity and second mortgages 16,992 14,338 10,183 18.51 66.87
Loans Held for Sale 94,074 92,552 48,369 1.64 95.10
- -----------------------------------------------------------------------------------------------
Total real estate loans 465,877 463,486 390,851 0.52 19.24
- -----------------------------------------------------------------------------------------------
Other loans:
Leases 33,250 38,032 39,071 (12.57) (14.90)
Consumer and other 6,070 4,101 2,732 48.01 122.18
- -----------------------------------------------------------------------------------------------
Total other loans 39,320 42,133 41,803 (6.68) (5.94)
- -----------------------------------------------------------------------------------------------
Total gross loans receivable 505,197 505,619 432,654 (0.08) 16.81
- -----------------------------------------------------------------------------------------------
Less:
Undisbursed portion of loans
in process (71,348) (73,121) (58,740) (2.42) 21.46
Deferred loan origination fees (1,397) (1,409) (1,750) (0.85) (20.17)
Unearned income (315) (384) (523) (17.97) (39.77)
Reserves for loan losses (3,728) (4,176) (3,388) (10.73) 10.04
Unearned discount on
loans purchased (46) 528 (181) (108.71) (74.59)
- -----------------------------------------------------------------------------------------------
Loans receivable, net* $428,363 $427,057 $367,922 0.31 16.43
===============================================================================================
*Includes Loans Held for Sale
</TABLE>
Non-Performing Assets
Total problem assets, which include non-accrual loans, loans classified as
problem assets by Asset Classification Committee (ACC) and real estate acquired
through the settlement of loans, increased by $1.2 million or 14.2% to $9.4
million at June 30, 1996 from March 31, 1996. At June 30, 1996, the Company had
non-accrual loans of $8.4 million compared to $6.0 million at March 31, 1996.
Interest income not recognized on these loans amounted to $194,000 during
15
<PAGE> 16
the first quarter of fiscal 1997. Approximately 41.7% of all non-accrual loans
were represented by equipment leases, 34.1% by construction loans, 11.3% by
mortgage loans and the balance by commercial real estate and consumer loans. In
addition, at June 30, 1996, the ACC identified $432,000 of loans as potential
problem loans. At March 31, 1996 the Company had $1.3 million of loans
classified as potential problems. Real estate owned increased by $120,000 or
13.2% to $1.0 million at June 30, 1996, from $907,000 at March 31, 1996. Total
problem assets as a percent of total assets increased to 1.52% at June 30,
1996, from 1.35% at March 31, 1996.
At June 30, 1996, there were 23 construction loans on non-accrual. Seven or
$1.1 million of these were in the Jacksonville, Florida market area and ten or
$670,000 were in the Aiken, South Carolina market area. Of the remaining six
construction loans, two or $443,000 were in the Augusta, Georgia market area
and fourt or $837,000 were in the Atlanta metropolitan area. In addition, at
June 30, 1996, four lease relationships were on non-accrual. One borrower
represented $1.9 million and is the lessee on one loan and lessor on seven
loans. The borrower has filed for bankruptcy and the eight loans are a part of
the bankruptcy proceedings. The remaining three relationships represent
$960,000, $904,000 and $16,000. At June 30, 1996, potential problem loans
totaled $432,000 in equipment leases.
The following table reflects non-performing loans, potential problem loans and
restructured loans as of the dates indicated. Non-performing loans consist of
non-accrual loans and foreclosed properties, as well as loans past due 90 days
or more as to interest or principal and still accruing. Potential problem loans
are those which management has doubts regarding the ability of the borrower to
comply with current loan repayment terms and have been classified as such by
the ACC regardless of payment status.
NON-ACCRUAL, PAST DUE and RESTRUCTURED LOANS
<TABLE>
<CAPTION>
(dollars in thousands) June 30, March 31, June 30,
1996 1996 1995
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Non-accrual loans:
Residential real estate-construction $3,065 $1,658 $ 83
Residential real estate-mortgage 1,018 502 404
Commercial real estate 128 421 -
Commercial lease 3,751 3,421 -
Installment 6 - -
- ----------------------------------------------------------------------------------
Total non-accrual 7,968 6,002 487
- ----------------------------------------------------------------------------------
Potential problem loans 432 1,345 810
Loans contractually delinquent 90
days which still accrue interest - - -
Troubled debt restructurings - - -
- ----------------------------------------------------------------------------------
Total non-accrual and problem loans $8,400 $7,347 $1,297
- ----------------------------------------------------------------------------------
Real estate owned, net 1,027 907 583
- ----------------------------------------------------------------------------------
Total problem assets $9,427 $8,254 $1,880
- ----------------------------------------------------------------------------------
Total problem assets/Total assets 1.52% 1.35% .39%
- ----------------------------------------------------------------------------------
Total problem assets/Net loans plus
reserves 2.79% 2.44% .58%
- ----------------------------------------------------------------------------------
Reserve for loan losses/Total
problem assets 39.55% 50.59% 180.21%
- ----------------------------------------------------------------------------------
</TABLE>
16
<PAGE> 17
Loan Impairment
At June 30, 1996, the recorded investment in impaired loans, which excludes
non-accrual first mortgage loans and residential construction loans, increased
$641,000 or 18.2% to $4,167,000 from $3,526,000 at March 31, 1996. The Company
had no impaired loans, as defined by SFAS Nos. 114 and 118, at June 30, 1995.
At June 30, 1996, $432,000 were on an accrual basis and $3,735,000 were on a
non-accrual basis as compared to $675,000 on an accrual basis and $2,851,000 on
a non-accrual basis at March 31, 1996. At June 30, 1996, the valuation
allowance related to these impaired loans was $1,077,000 compared to $1,153,000
at March 31, 1996. During the quarter ended June 30, 1996, the Company
charged-off $959,000 against loss reserves relating to impaired leases. At June
30, 1996 and March 31, 1996, all impaired loans had a related loan loss
reserve. For the first quarter of fiscal 1997, the average recorded investment
in impaired loans was $4,053,000 compared to $1,916,000 for the quarter ended
March 31, 1996. The Company recognized interest income on impaired loans of
$118,000 for the first quarter of fiscal 1997 of which $114,000 remains
uncollected.
The Company uses either the cash or cost recovery method to record cash
receipts on impaired loans that are on nonaccrual. Under the cash method,
contractual interest is credited to interest income when received. This method
is used when the ultimate collectibility of the total principal is not in
doubt. Loans on the cost recovery method may be changed to the cash method when
the application of the cash payments has reduced the principal balance to a
level where collection of the remaining recorded investment is no longer in
doubt.
Reserve for Loan Losses
The Company set aside $524,000 of additional reserves for possible loan losses
during the quarter ended June 30, 1996 while no additional reserves were set
aside for the same period ended June 30, 1995. The Company charged-off
$1,006,000, therefore, loan loss reserves totaled $3,728,000 at June 30, 1996
and $4,176,000 at March 31, 1996. At June 30, 1996, reserves represented 1.1%
of loans receivable and real estate owned, remaining stable from 1.3% and 1.1%
at March 31, 1996 and June 30, 1995, respectively. Loan loss reserves to total
problem assets decreased to 39.55% at June 30, 1996 from 50.59% and 180.21% at
March 31, 1996 and June 30, 1995, respectively. Management believes that the
reserves for losses on loans are adequate based upon management's evaluation
of, among other things, estimated value of the underlying collateral, loan
concentrations, specific problem loans, and economic conditions that may affect
the borrower's ability to repay and such other factors as, in management's
judgment, deserve recognition under existing economic conditions. While
management uses available information to recognize losses on loans, future
additions to the allowances may be necessary based on changes in economic
conditions and composition of the Company's loan portfolio. The following table
summarizes problem assets for the quarters ended as indicated.
17
<PAGE> 18
ANALYSIS OF THE RESERVE FOR LOAN LOSSES
(dollars in thousands)
<TABLE>
<CAPTION>
June 30, 1996 March 31, 1996 June 30, 1995
-------------------------------------------------
<S> <C> <C> <C>
Reserve for loan losses, beginning of quarter
Charge-offs: $ 4,176 $ 3,752 $ 3,362
Real estate - construction 0 0 0
Real estate - mortgage 47 233 4
Consumer 0 0 0
Commercial leases 959 0 4
- ----------------------------------------------------------------------------------------------------
Total charge-offs 1,006 233 8
Recoveries 34 19 34
- ----------------------------------------------------------------------------------------------------
Net charge-offs 972 214 (26)
Provision for loan losses 524 638 0
- ----------------------------------------------------------------------------------------------------
Reserve for loan losses, end of quarter $ 3,728 $ 4,176 $ 3,388
- ----------------------------------------------------------------------------------------------------
Loan receivable, net $334,289 $334,505 $319,553
- ----------------------------------------------------------------------------------------------------
Ratio of net charge-offs to loans receivable, net .2907% .0640% (.0081)%
- ----------------------------------------------------------------------------------------------------
Reserves to loans receivable, net 1.12% 1.25% 1.06%
- ----------------------------------------------------------------------------------------------------
</TABLE>
Real Estate Held for Development and Sale
The Company's investment in real estate held for development and sale increased
$5,578,000 or 62.55% since June 30, 1995. The Company currently has five real
estate projects under development in the Atlanta market.
Deposits
Deposits are the Company's primary funding source. Total deposits increased by
$38.6 million or 11.1% to $386.7 million from $348.1 at March 31, 1996. The
Bank uses traditional marketing methods to attract new customers. Its deposit
network is serviced from its eleven branches in Atlanta. The growth in deposits
was primarily in certificates of deposit with maturities of one year or less
which grew 22.1% to $213.6 million at June 30, 1996 from $175.0 million at
March 31, 1996. Demand deposits including NOW accounts, passbook accounts and
money market accounts were 21.4% of the Company's deposits at June 30, 1996.
The weighted average interest rate on deposits remained relatively stable at
5.09% at June 30, 1996 and 5.08% and 5.13% at March 31, 1996 and June 30, 1995,
respectively.
18
<PAGE> 19
For the periods indicated, deposits are summarized by type and remaining term
as follows (dollars in thousands):
<TABLE>
Weighted Average
Interest Rate at
--- -----------------------------
June 30, March 31, June 30, June 30, March 31, June 30,
1996 1996 1995 1996 1996 1995
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Demand deposits:
NOW accounts $ 32,955 $ 33,603 $ 27,325 1.72% 1.74% 1.77%
Money market accounts 7,904 8,418 9,652 2.49% 2.50% 2.40%
Passbook accounts 41,862 42,845 43,203 2.53% 2.53% 2.53%
----------------------------------
82,721 84,866 80,180 2.20% 2.21% 2.26%
----------------------------------
Time deposits:
Maturity one year or less 213,572 174,908 142,163
Maturity greater than one year through
two years 26,631 26,268 22,430
Maturity greater than two years through
three years 14,159 14,867 17,093
Maturity greater than three years 49,643 47,189 43,888
----------------------------------
304,005 263,232 225,574 5.91% 6.00% 6.17%
----------------------------------
Total deposits $386,726 $348,098 $305,754 5.09% 5.08% 5.13%
----------------------------------
</TABLE>
For the periods indicated, interest expense on deposits is summarized as
follows (dollars in thousands):
<TABLE>
June 30, March 31, June 30,
1996 1996 1995
-----------------------------
<S> <C> <C> <C>
NOW accounts $ 134 $ 125 $ 122
Money market accounts 49 51 63
Passbook accounts 260 259 268
Time Deposits 4,307 3,957 3,329
-----------------------------
$4,750 $4,392 $3,782
-----------------------------
</TABLE>
Federal Home Loan Bank Advances
The FHLB system functions as a reserve credit facility for thrift institutions
and certain other member home financing institutions. The Bank utilizes
advances from the FHLB to fund a portion of its assets. At June 30, 1996,
advances were $137.5 million down from $168.2 million at March 31, 1996. For
the first quarter of fiscal 1997, the weighted average interest rate on these
borrowings decreased to 5.21% down from 5.70% and 6.35% for the quarters ended
March 31, 1996 and June 30, 1995, respectively.
19
<PAGE> 20
Liquidity and Capital Resources
The Company's Asset and Liability Committee manages liquidity to ensure that
there is sufficient cash flow to satisfy demands for credit, deposit
withdrawals and other Company needs. Traditional sources of liquidity include
deposits, FHLB advances, loan sales and payments on loans. Savings deposits are
highly dependent upon market and other conditions largely outside the Company's
control; while loan principal repayments are a relatively stable source of
funds.
Under current regulations, the Company is required to maintain liquid assets at
five percent or more of its net withdrawable deposits plus short-term
borrowings (due in one year or less). The Company has traditionally maintained
liquidity levels above the regulatory minimum and management anticipates this
trend will continue. At June 30, 1996, the Company's liquidity ratio was 5.4%.
The Company, through PrimeEagle Mortgage, originates first mortgage loans which
generally are sold to investors. During the three month period, permanent
mortgage loan originations increased by 79.5% to approximately $158,000,000
compared to $88,000,000 for the same period last year. At June 30, 1996, the
Company had outstanding commitments to originate loans, exclusive of the
undisbursed portion of loans in process, of approximately $17.5 million
compared to $19.3 million at June 30, 1995. Commitments to sell mortgage loans
increased to approximately $63.8 million at June 30, 1996 from $50.5 million at
June 30, 1995.
Regulatory Capital
The Financial Institution Reform, Recovery, and Enforcement Act (FIRREA) of
1989 established minimum capital requirements for thrift institutions. FIRREA
requires savings and loan associations to have core capital of at least 3% of
total assets and tangible capital of at least 1.5% of total assets.
Additionally, institutions are required to meet a risk-based capital
requirement consisting of 8% of the value of risk weighted assets. The
Company's regulatory capital exceeds each of the above mentioned capital
requirements and allows Tucker Federal to be classified as a "well-capitalized"
Institution under current OTS standards. Management anticipates that the
Company will continue to meet the capital requirements.
The following table reflects the Company's minimum regulatory capital
requirements, actual capital and the level of excess capital by category. The
Company has historically maintained capital substantially in excess of the
minimum requirement.
20
<PAGE> 21
REGULATORY CAPITAL
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
Regulatory Required Excess
(dollars in thousands) Capital % Capital % Capital %
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------
June 30, 1996
Tangible Capital $48,652 8.0 $ 9,097 1.5 $39,555 6.5
Core Capital $48,652 8.0 $18,194 3.0 $30,458 5.0
Risk-based Capital $51,680 14.5 $28,428 8.0 $23,252 6.5
- -----------------------------------------------------------------------
March 31, 1996
Tangible Capital $53,615 8.9 $ 9,057 1.5 $44,558 7.4
Core Capital $53,615 8.9 $18,115 3.0 $33,500 5.9
Risk-based Capital $56,783 15.8 $28,842 8.0 $27,941 7.8
- -----------------------------------------------------------------------
June 30, 1995
Tangible Capital $30,412 6.4 $ 7,174 1.5 $23,238 4.9
Core Capital $30,412 6.4 $14,348 3.0 $16,064 3.4
Risk-based Capital $33,800 10.1 $26,889 8.0 $ 6,911 2.1
- -----------------------------------------------------------------------
</TABLE>
Effective February 15, 1996, the Company raised $21.5 million of capital in a
secondary offering co-underwritten by Interstate/Johnson Lane Corporation and
Morgan Keegan & Company, Inc. Substantially all of the proceeds were
contributed to the Bank.
21
<PAGE> 22
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the
Company, the Association or any subsidiary is a party or to which
any of their property is subject.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 1996 Annual Meeting of Shareholders of Eagle Bancshares, Inc.
was held on August 8, 1996. A total of 3,630,549 shares of common
stock which equals 79.75% of the 4,552,200 shares outstanding as of
the record date were represented in person or by proxy. The Board of
Directors submitted two proposals to be voted upon by shareholders:
(i) the election of Richard B. Inman, Jr. and Walter C. Alford to
serve as Directors for a three year term and (ii) the ratification
of the Board of Directors' appointment of Arthur Anderson & Co, SC
to serve as independent auditors for the fiscal year ending March
31, 1997. Richard B. Inman, Jr. and Walter C. Alford were elected to
serve as Directors for a three year period and until their
successors are duly elected and qualified. Shareholder votes for the
election of Directors are set forth below:
<TABLE>
<CAPTION>
Broker
For Withheld Nonvotes
--------- -------- --------
<S> <C> <C> <C>
Richard B. Inman, Jr. 3,617,471 13,078 None
Walter C. Alford 3,623,549 7,000 None
</TABLE>
The Directors whose names are set forth below will continue to serve
for the remainder of their terms, as indicated.
<TABLE>
<CAPTION>
Director Term Expires*
-------- -------------
<S> <C> <C>
George G. Thompson 1998
Richard J. Burrell 1998
Conrad J. Sechler, Jr. 1999
Weldon A. Nash, Jr. 1999
</TABLE>
* The term of office will expire on the later of the date of the
annual meeting of shareholders for the year indicated when their
replacements are duly elected and qualified.
22
<PAGE> 23
The appointment by the Board of Directors of Arthur Andersen to serve as
independent auditors for the fiscal year ending March 31, 1997, was ratified by
the shareholders. The shareholders voted 3,607,601 for Arthur Andersen, 7,920
voted against and 15,028 abstained from voting.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(11) Computation of per share earnings
(27) Financial Data Schedule (for SEC use only)
Reports on Form 8-K
None
23
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
EAGLE BANCSHARES, INC.
(Registrant)
Date: August 14, 1996 /s/ Conrad J. Sechler, Jr.
------------------------------------
Conrad J. Sechler, Jr.
Chairman of the Board, President and
Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant in
the capacities and on the dates indicated.
Date: August 14, 1996 /s/Richard B. Inman, Jr.
------------------------------------
Richard B. Inman, Jr.
Director, Secretary and Treasurer
(Chief Financial and Accounting
Officer)
Date: August 14, 1996 /s/ Conrad J. Sechler, Jr.
------------------------------------
Conrad J. Sechler, Jr.
Chairman of the Board and President
24
<PAGE> 25
EAGLE BANCSHARES, INC.
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description Page No.
- ------ ----------- --------
<S> <C> <C>
11 Computation of per share earnings 26
27 Financial Data Schedule (for SEC use only)
</TABLE>
25
<PAGE> 1
EXHIBIT 11
EAGLE BANCSHARES, INC.
Statement re: Computation of per share earnings
The following computations set forth the calculation of primary earnings per
share and fully diluted earnings per share for the three months ending June 30,
1996 and 1995.
<TABLE>
<CAPTION>
Three months ending June 30, 1996
------------------------------------
Primary Fully Diluted
- --------------------------------------------------------------------------------
<S> <C> <C>
Net income per share: $ .28 $ .28
- --------------------------------------------------------------------------------
Weighted average number of common
shares outstanding 4,552,200 4,552,200
Increase due to assumed exercise of
dilutive stock options 86,746 89,222
- --------------------------------------------------------------------------------
Adjusted weighted average number of
common and common equivalent
shares outstanding 4,638,946 4,641,422
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Three months ending June 30, 1995
------------------------------------
Primary Fully Diluted
- --------------------------------------------------------------------------------
<S> <C> <C>
Net income per share: $ .34 $ .34
- --------------------------------------------------------------------------------
Weighted average number of common
shares outstanding 3,063,200 3,063,200
Increase due to assumed exercise of
dilutive stock options 86,208 88,006
- --------------------------------------------------------------------------------
Adjusted weighted average number of
common and common equivalent
shares outstanding 3,149,408 3,151,206
- --------------------------------------------------------------------------------
</TABLE>
26
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-1-1996
<PERIOD-END> JUN-30-1996
<CASH> 9,376
<INT-BEARING-DEPOSITS> 2,575
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 77,327
<INVESTMENTS-CARRYING> 59,437
<INVESTMENTS-MARKET> 0
<LOANS> 334,289
<ALLOWANCE> 3,728
<TOTAL-ASSETS> 621,474
<DEPOSITS> 386,726
<SHORT-TERM> 0
<LIABILITIES-OTHER> 5,925
<LONG-TERM> 0
0
0
<COMMON> 4,854
<OTHER-SE> 52,377
<TOTAL-LIABILITIES-AND-EQUITY> 621,474
<INTEREST-LOAN> 10,022
<INTEREST-INVEST> 1,321
<INTEREST-OTHER> 1,385
<INTEREST-TOTAL> 12,728
<INTEREST-DEPOSIT> 4,750
<INTEREST-EXPENSE> 6,832
<INTEREST-INCOME-NET> 5,896
<LOAN-LOSSES> 524
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 6,001
<INCOME-PRETAX> 1,801
<INCOME-PRE-EXTRAORDINARY> 1,801
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,299
<EPS-PRIMARY> .28
<EPS-DILUTED> .28
<YIELD-ACTUAL> 8.98
<LOANS-NON> 7,968
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 432
<ALLOWANCE-OPEN> 4,176
<CHARGE-OFFS> 1,006
<RECOVERIES> 34
<ALLOWANCE-CLOSE> 3,728
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
