SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d)
of The Securities Exchange Act of 1934
For Quarter Ended MARCH 31, 1997 Commission File Number 33-43386
-------------- --------
HARDWICK HOLDING COMPANY
------------------------------------------------------
(Exact name of registrant as specified in its charter)
GEORGIA 58-1408388
- -------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
One Hardwick Square, P.O. Box 1367, Dalton, GA. 30722-1367
- ----------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (706) 217-3950
--------------
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 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 / /
Number of shares of common stock outstanding
at MARCH 31, 1997
4,026,025 Shares
----------------<PAGE>
HARDWICK HOLDING COMPANY AND SUBSIDIARIES
INDEX
Page No.
PART I- FINANCIAL INFORMATION
Consolidated Statements of Financial
Position at March 31, 1997 and
December 31, 1996 3
Consolidated Statements of Income
for the Three Months Ended March 31,
1997 and 1996 4
Consolidated Statements of Cash Flows
for the Three Months Ended March 31,
1997 and 1996 5-6
Notes to Unaudited Consolidated Financial Statements 7-9
Management's Discussion and Analysis of
Financial Position and Results of Operations 10-14
PART II- OTHER INFORMATION 15
SIGNATURES 16
2
<PAGE>
HARDWICK HOLDING COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
----------- ------------
(unaudited)
<S> <C> <C>
Assets
Cash and due from banks $ 23,858 $ 26,797
Federal funds sold 17,400 7,000
----------- -----------
Total cash and cash equivalents 41,258 33,797
Investment securities, available-for-sale 117,644 120,166
Loans, net 275,904 271,470
Premises and equipment, net 14,745 15,114
Assets under capital lease, net 565 614
Accrued interest receivable 3,778 3,865
Excess of cost over fair value of
subsidiaries acquired, net of amortization 5,192 5,346
Other assets 2,430 1,689
----------- -----------
Total assets $ 461,516 $ 452,061
=========== ===========
Liabilities and Stockholders' Equity
Deposits-
Noninterest-bearing $ 86,518 $ 85,567
Interest-bearing 317,129 308,373
----------- -----------
Total deposits 403,647 393,940
Securities sold under agreements to repurchase 3,295 5,927
Other borrowed funds 288 306
Note payable to bank 900 0
Capital lease obligation 617 668
Other liabilities 4,733 4,243
----------- -----------
Total liabilities 413,480 405,084
----------- -----------
Commitments and contingencies (Notes 2 and 4)
Stockholders' equity-
Common stock, $.50 par value, 10,000,000 shares authorized,
4,161,141 shares issued; 4,026,025 and 3,999,229 shares
outstanding at March 31,1997 and December 31,1996, respectively 2,081 2,063
Additional paid-in capital 20,936 20,233
Retained earnings 28,872 26,845
Unrealized losses (gains) on securities available-for-sale net of tax (474) 324
Less treasury stock, at cost, 135,116 and 125,912 shares at March 31,
1997 and December 31, 1996, respectively 2,473 2,289
Less deferred compensation from restricted stock plan (906) (199)
----------- -----------
Total stockholders' equity 48,036 46,977
----------- -----------
Total liabilities and stockholders' equity $ 461,516 $ 452,061
=========== ===========
</TABLE>
(See notes to consolidated financial statements.)
3
<PAGE>
HARDWICK HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
For the Three Months Ended
--------------------------
March 31, March 31,
1996 1996
--------- ---------
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 6,472 $ 5,955
Interest on investment securities-
Taxable 1,306 1,364
Nontaxable 304 424
Interest on fed funds sold 158 113
--------- ---------
Total interest income 8,240 7,856
--------- ---------
INTEREST EXPENSE:
Interest on deposits 3,314 3,266
Interest on securities sold under agreements to repurchase 56 33
Interest on other borrowed funds 1 7
Interest on note payable and capital lease obligations 11 17
--------- ---------
Total interest expense 3,382 3,323
--------- ---------
NET INTEREST INCOME BEFORE PROVISION FOR LOAN
LOAN LOSSES 4,858 4,533
PROVISION FOR LOAN LOSSES 500 38
--------- ---------
NET INTEREST INCOME 4,358 4,495
--------- ---------
NONINTEREST INCOME:
Service charges on deposit accounts 650 581
Securities (losses) gains, net 29 (28)
Other noninterest income 2,739 544
--------- ---------
Total noninterest income 3,418 1,097
NONINTEREST EXPENSE:
Salaries and employee benefits 2,165 2,035
Net occupancy expense 798 867
Other noninterest expense 1,624 1,349
--------- ---------
Total noninterest expense 4,587 4,251
--------- ---------
INCOME BEFORE PROVISION FOR INCOME TAXES 3,189 1,341
PROVISION FOR INCOME TAXES 921 398
--------- ---------
NET INCOME $ 2,268 $ 943
========= =========
NET INCOME PER SHARE $ 0.57 $ 0.23
========= =========
</TABLE>
(See notes to consolidated financial statements.)
4<PAGE>
HARDWICK HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
1997 1996
--------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,268 $ 943
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan losses 500 38
Provision for depreciation and amortization 671 632
Loss (Gain) on disposition of premises and equipment 188 (1)
Accretion of investment security discounts (23) 29
Deferred income tax provision 213 125
Securities losses (gains), net (29) 28
Decrease (Increase) in accrued interest receivable 87 (313)
Increase in other assets (543) (41)
Increase in other liabilities 490 160
---------- -------
Net cash provided by operating activities 3,822 1,600
---------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of investment securities available-for-sale 4,706 13,538
Proceeds from sales of investment securities available-for-sale 11,711 8,473
Purchases of investment securities available-for-sale (15,113) (11,981)
Net cash flows from loans originated and principal collected on loans (4,934) (7,299)
Proceeds from disposal of premises and equipment 14 15
Purchases of premises and equipment (226) (188)
---------- -------
Net cash (used in) provided by investing activities (3,842) 2,558
---------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in demand deposits, NOW accounts, and savings accounts (1,584) (13,018)
Net cash flows from sales and maturities of certificates of deposit 11,291 273
Net (decrease) in fed funds purchased and securities sold
under agreement to repurchase (2,632) (268)
(Decrease) increase in other borrowed funds (18) (18)
Proceeds from note payable to bank 900 0
Payments on note payable to bank and capital lease obligations (51) (168)
Purchase of treasury stock, at cost (184) (28)
Payments of cash dividends (241) (243)
---------- -------
Net cash provided by (used in) financing activities $ 7,481 $ (13,470)
---------- -------
</TABLE>
5
<PAGE>
HARDWICK HOLDING COMPANY
& SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS-(Continued)
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
--------------------------
1997 1996
--------------------------
<S> <C> <C>
NET (INCREASE) DECREASE IN CASH AND CASH EQUIVALENTS $ 7,461 $ (9,312)
CASH AND CASH EQUIVALENTS, beginning of period 33,797 42,271
--------- ----------
CASH AND CASH EQUIVALENTS, end of period $ 41,258 32,959
========= ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for Interest $ 3,054 $ 2,862
========= ==========
Cash paid during the period for income taxes $ 578 -
========= ==========
Noncash transactions during the period ended:
Transfer of premises and equipment to other assets $ - $ 211
========= ==========
Increase in deferred compensation from issue of restricted stock $ 720 $ -
========= ==========
</TABLE>
(See notes to consolidated financial statements.)
6
<PAGE>
HARDWICK HOLDING COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements
include the accounts of Hardwick Holding Company (HHC) and its
wholly owned subsidiaries, Hardwick Bank and Trust Company (HBT)
and First National Bank of Northwest Georgia (FNBNWG),
collectively referred to as the "Company". All significant
intercompany balances and transactions have been eliminated.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that effect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates,
although, in the opinion of management, such differences would
not be significant.
In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments
(consisting only of normal recurring adjustments) necessary for
fair statement of the consolidated financial position and the
results of operations of the Company for the interim periods.
The results of operations for the three month period ended March
31, 1997 are not necessarily indicative of the results which may
be expected for the entire year.
(2) FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
The Company is a participant in financial instruments with off-
balance-sheet risk. These instruments are entered into in the
normal course of business to meet the financing needs of its
customers and to reduce the Company's own exposure to
fluctuations in interest rates. These financial instruments
include commitments to extend credit and standby letters of
credit. These instruments involve, to varying degrees, elements
of credit and interest rate risk in excess of the amount
recognized in the consolidated balance sheets. The contract
amounts of these instruments reflect the extent of involvement
the Company has in particular classes of financial instruments.
The Company's exposure to credit loss in the event of
nonperformance by the counterparty to the financial instrument
for commitments to extend credit and standby letters of credit is
represented by the contractual amount of these instruments. The
Company uses the same credit and collateral policies in making
commitments and conditional obligations as it does for on-
balance-sheet instruments.
HBT and FNBNWG grant various types of loans and financial
instruments to customers within their respective market areas
(primarily Northwest Georgia). Although the Company has a
diversified loan portfolio, a significant portion of the
Company's loans originate from customers that are directly or
7
<PAGE>
indirectly related to the carpet industry. Notably, approximately
40% of the work force in the Company's market area is
employed by companies directly related to the carpet industry.
Adverse economic trends in the carpet industry could impair these
customers' ability to repay their obligations and result
unfavorably on the results of operations of the Company.
Commitments to extend credit are agreements to lend to a customer
as long as there is no violation of any condition established in
the contract. Commitments generally have fixed expiration dates
or other termination clauses and may require payment of a fee.
Since many of the commitments are expected to expire without
being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. Total commitments to extend
credit at March 31, 1997, were approximately $82,709,000. HBT
and FNBNWG evaluate each customer's creditworthiness on a case-
by-case basis. The amount of collateral obtained, if deemed
necessary by HBT and FNBNWG, upon extension of credit is based on
management's credit evaluation of the customers. Collateral held
varies but may include accounts receivable, inventory, property,
plant and equipment, residential real estate, and income-
producing commercial properties.
Standby letters of credit are conditional commitments issued by
HBT and FNBNWG to guarantee the performance of a customer to a
third party. Those guarantees are primarily issued to support
public and private borrowing arrangements, including commercial
paper, bond financing and similar transactions. The credit risk
involved in issuing letters of credit is essentially the same as
that involved in extending loan facilities to customers. The
collateral varies but may include accounts receivable, inventory,
property, plant and equipment and residential real estate for
those commitments for which collateral is deemed necessary. The
Company had irrevocable standby letters of credit of
approximately $1,551,000 outstanding at March 31, 1997.
(3) RECENT ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board ( FASB ) has issued SFAS
No. 128, Earnings Per Share and SFAS No. 129, Disclosure of
Information About Capital Structure . These standards are
effective for reporting periods ending after December 15, 1997.
The adoption by the Company will not have a significant effect on
the Company s financial condition or results of operations.
(4) CONTINGENCIES
The Company is involved in litigation and other legal proceedings
arising in the course of its normal business activities.
Although the ultimate outcome of these matters cannot be
determined at this time, it is the opinion of management that
none of these matters, when resolved, will have a significant
effect on the Company's financial condition or results of
operations.
8<PAGE>
(5) EARNINGS PER SHARE
Earnings per share is calculated on the basis of weighted average
number of shares outstanding, which was 4,004,259 for the three
month period ended March 31, 1997 and 4,065,729 for the three
month period ended March 31, 1996.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
POSITION AND RESULTS OF OPERATIONS
FINANCIAL POSITION
- ------------------
Total assets increased by approximately $9,455,000 from
approximately $452,061,000 at December 31, 1996, to approximately
$461,516,000 at March 31, 1997. The principal fluctuations were
in federal funds sold and loans. Federal funds sold increased by
approximately $10,400,000 from approximately $7,000,000 at
December 31, 1996 to approximately $17,400,000 at March 31, 1997,
an increase of 148.5%. Loans increased approximately $4,434,000
from approximately $271,470,000 at December 31, 1996, to
approximately $275,904,000 at March 31, 1997, an increase of
1.63%. The increase was partially offset by a decrease in cash
and due from banks of approximately $2,939,000 from approximately
$26,797,000 at December 31, 1996, to approximately $23,858,000 at
March 31, 1997, and a decrease in investment securities of
approximately $2,522,000 or 2.1% to approximately $117,644,000 at
March 31, 1997, from approximately $120,166,000 at December 31,
1996. HHC's cash and cash equivalents reflected a net increase
of approximately $7,461,000 or 22.0% for the three month period
ended March 31, 1997.
Savings and other interest-bearing deposit accounts increased
approximately $8,756,000 or 2.8% during the three-months ended
March 31, 1997, to approximately $317,129,000. It is management's
opinion that HHC maintains competitive deposit rates while
exercising prudent strategies in competing with local
institutions. Although rates paid on deposit accounts have
increased during the three-months ended March 31, 1997, HHC has
not raised rates paid on interest bearing deposits at the rate of
increase as other institutions in its market area. Average rates
paid on deposits for the current period were approximately 4.3%
compared to 4.4% for the same period in the preceding year.
At March 31, 1997, HHC's financial position continued to reflect
strong equity and liquidity, with an equity to assets ratio of
10.4%. At March 31, 1997, 59% of HHC's loans were in real estate
loans (including mortgage and construction loans), 19% in
commercial loans (including agricultural loans), 14% in consumer
loans (including credit cards) and other loans were 8%. HHC's
loan to deposit ratio was 69% at March 31, 1997, and 47% of all
deposits were invested in time certificates of deposit.
In the event of higher than anticipated requirements related to
loan commitments or deposit withdrawals, HHC's bank subsidiaries
maintain federal funds lines with regional banks. Also, the bank
subsidiaries of the Company have become members of the Federal
Home Loan Bank and have credit lines to draw from. At March 31,
1997 approximately $288,000 was outstanding under the Federal
Home Loan Bank lines of credit.
10<PAGE>
The following table represents the changes in consolidated
stockholders' equity for the three-months ended March 31, 1997:
Balance, December 31, 1996 $ 46,977,000
Net income 2,268,000
Change in unrealized gains (losses) on securities
available-for-sale, net of tax (798,000)
Purchase of treasury stock (184,000)
Amortization of deferred compensation-restricted 14,000
stock plan
Cash dividends declared (241,000)
-----------
Balance, March 31, 1997 $ 48,036,000
===========
RESULTS OF OPERATIONS
For the three-months ended March 31, 1997 and 1996:
NET INTEREST INCOME
Net interest income after provision for loan losses for the
three-month period ended March 31, 1997 was approximately
$4,358,000 which was $137,000 or 3.1% less than the $4,495,000
for the same period the year before. Total interest income
increased by approximately $384,000 or 4.9% while total interest
expense increased approximately $59,000 or 1.8% for the three
month period ended March 31, 1997, as compared to the three-
months ended in the previous year. Approximately $500,000 was
provided for loan losses during the three month period ended
March 31, 1997 compared with approximately $38,000 for the three
month period in the preceding year. The increase in the loan
loss provision is due to the increase of approximately $1,127,000
in nonperforming loans from December 31, 1996 to March 31, 1997,
and an increase of approximately $22,343,480 in average loans for
the three months ended March 31, 1997 compared to the three
months ended March 31, 1996.
Yields on interest-bearing assets averaged 8.4% for the current
period compared to 7.6% for the same period the year before.
Total average interest-bearing assets increased by approximately
$7,862,000 or 2.0% for the current period when compared with the
three-months ended March 31, 1996. Average loans for the three-
months ended March 31, 1997, increased approximately $22,343,000
or 8.9% more than the average loans for the three-months ended
March 31, 1996. The average yield on loans for the three-months
ended March 31, 1997, was 9.5%, which is relatively unchanged
from the three-months ended March 31, 1996.
Earnings from the loan portfolio have also been adversely
effected by the Company's level of nonperforming assets.
Nonaccrual loans and accruing loans contractually past due ninety
days or more were approximately $2,176,000 at March 31, 1997, as
compared to approximately $1,000,000 at December 31, 1996,
representing an increase of approximately $1,176,000 or 117.6%.
At present management does not foresee an increasing trend
occurring.
11
<PAGE>
Nonaccrual loans have increased approximately $1,438,000 or
320.3% for the three month period ended March 31, 1997, to
approximately $1,887,000 compared to approximately $449,000 at
December 31, 1996. Interest accruals on nonaccrual loans are
recorded only when they are fully current with respect to
interest and principal and when in the judgment of management,
the loans are estimated to be fully collectible as to both
principal and interest. Interest income on nonaccrual loans
which would have been reported on an accrual basis amounted to
approximately $40,000 during the three month period ended March
31, 1997. Nonaccrual loan interest collected and reported in the
three month period ended March 31, 1997, was approximately
$19,000.
Rates paid on interest-bearing liabilities averaged 4.4% for the
three-months ended March 31, 1997, compared with 4.4% for the
three-months ended March 31, 1996. Rates paid in the current
three month period on average have remained relatively the same
as rates paid on average for the year ended December 31, 1996.
Management's liability pricing strategies include competitive
deposit rates with increased awareness of cash flow needs within
the balance sheet. Management anticipates rates to increase
during the remainder of the year.
OTHER NONINTEREST INCOME
Total other noninterest income increased approximately $2,321,000
for the three-months ended March 31, 1997, as compared with the
three-months ended March 31, 1997. The increase is primarily due
to a settlement of litigation with a vendor of approximately
$2,127,000 which was included in other noninterest income
Service charges on deposits increased by approximately $69,000.
There was a change in net gains from sales and calls of
investment securities held available-for-sale of approximately
$57,000. The other noninterest income increase was due
principally to an increase in credit life commissions of
approximately $45,000, credit card merchant discounts of
approximately $26,000 while other miscellaneous income items had
a net decrease of approximately $3,000.
OTHER NONINTEREST EXPENSES
Total noninterest expenses increased by approximately $336,000,
or 7.9% for the three- months ended March 31, 1997, as compared
to the same period ended in the preceding year. The increase is
due principally to increases of approximately $130,000 in salary
and employee benefits and of approximately $275,000 in other
expense. The increase was partially offset by a decrease in net
occupancy expense of approximately $69,000 The increase in
salary and employee benefits is due principally to general rate
increases and the increase in the cost of providing the Company s
health care plan. The increase in other expense was made up of
approximately $188,000 in losses on disposition of fixed assets,
credit card fee expense of approximately $51,000, outside data
processing of approximately $26,000 and advertising of
approximately $18,000, and other miscellaneous expenses had a net
decrease of approximately $8,000.
12
<PAGE>
INCOME TAX PROVISION
The effective tax rates reported for the three-months ended March 31,
1997 and 1996, were 28.9% and 29.7%, respectively.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Liquidity is achieved through the continual maturing of interest-
earning assets, as well as by investing in short term marketable
securities. Liquidity is also available through deposit growth,
borrowing capacity, loan sales and repayments of principal on
loans and securities.
High levels of liquidity are normally obtained at a net interest
cost due to lower yields on short term, liquid earning assets and
higher interest expense usually associated with the extension of
deposit maturities. The trade-off of the level of desired
liquidity versus its cost is evaluated in determining the
appropriate amount of liquidity at any one time.
For the three-months ended March 31, 1997, cash and cash
equivalents increased approximately $7,461,000 or 22% from
December 31, 1996. Operating and financiang activities provided
cash and cash equivalents of approximately $3,822,000 and
$7,481,000 respectively while investing activities used
approximately $3,842,000. Net income of approximately $2,268,000,
depreciation and amortization not requiring the use of cash of
approximately 671,000, losses on disposition of premises and
equipment of approximately $188,000, deferred income taxes of
approximately $213,000 and an increase in other liabilities of
approximately $490,000 were the principal sources of funds
provided from operating activities while being partially offset
by an increase in other assets of approximately $543,000.
Funds provided by financing activities were principally from
proceeds from net cash flows from sales and maturities of
certificates of deposit of approximately $11,291,000 and proceeds
from a note payable to bank of approximately $900,000. Funds
provided were partially offset by net decreases in NOW accounts,
demand deposits and savings accounts of approximately $1,584,000,
net decreases in fed funds purchased and securities sold under
agreement to repurchase of approximately $2,632,000, purchases of
treasury stock of approximately $184,000 and payments of
dividends of approximately $241,000.
The cash used in investing activities was principally due to
purchases of investment securities available-for-sale of
approximately $15,113,000 and net cash flows from loans
originated and principal collected on loans of approximately
$4,934,000. Investing activities providing funds were proceeds
from the maturities and calls of investment securities available-
for-sale of approximately $4,706,000 and sales of investments
securities available-for-sale of approximately $11,711,000.
13<PAGE>
CAPITAL RESOURCES
HHC and its subsidiary banks are subject to a minimum Tier 1
capital to risk-weighted assets ratio of 4% and a total capital
(Tier 1 plus Tier 2) to risk-weighted assets ratio of 8%. The
Federal Reserve Board ("Board") has also established an
additional capital adequacy guideline referred to as the Tier 1
leverage ratio that measures the ratio of Tier 1 Capital to
average quarterly assets. The most highly rated bank holding
companies will be required to maintain a minimum Tier 1 leverage
ratio of 3%. The required ratio will be based on the Board's
assessment of the individual bank holding company's asset
quality, earnings performance, interest-rate risk and liquidity.
Bank holding companies experiencing internal growth or making
acquisitions will be expected to maintain strong capital
positions substantially above the minimum supervisory levels
without significant reliance on intangible assets.
The following tables represent HHC's regulatory capital position
at March 31, 1997:
<TABLE>
<CAPTION>
Risk Based Capital Ratios: Amount Ratio
----------- ------
<S> <C> <C>
Tier 1 Capital $ 43,318 12.74%
Tier 1 Capital minimum requirement $ 13,605 4.00%
----------- -----
Excess $ 29,713 8.74%
=========== =====
Total Capital $ 47,606 14.00%
Total Capital minimum requirement $ 27,210 8.00%
----------- -----
Excess $ 20,396 6.00%
=========== =====
Risk adjusted assets net of goodwill and
excess loan loss allowance $ 340,135
Leverage Ratio:
Tier 1 Capital to adjusted total assets ("Leverage $ 43,318 9.77%
Ratio")
Minimum leverage requirement $ 13,305 3.00%
----------- -----
Excess $ 30,013 6.67%
=========== =====
Average total assets, net of goodwill <F1> $ 443,530
<FN>
<F1> Average total assets, net of goodwill for the three-months ended March 31, 1997.
</FN>
</TABLE>
HHC is a legal entity separate and distinct from the Banks. Most of the
revenues of HHC result from dividends paid to it by the Banks. There are
statutory and regulatory requirements applicable to the payment of
dividends by the subsidiary banks as well as by HHC to its shareholders.
HHC declared approximately $241,000, or $0.06 per share in cash dividends
to its common shareholders for the three-months ended March 31,1997.
14
<PAGE>
HARDWICK HOLDING COMPANY AND SUBSIDIARIES
PART II
ITEM 1. LEGAL PROCEEDINGS
HHC is not aware of any material pending legal proceedings to which HHC
or any of its subsidiaries 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 - None
ITEM 5. OTHER INFORMATION - None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit 27 - Financial Data Schedule (for SEC use only)
(b) Form 8-K - None.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
CORPORATION HARDWICK HOLDING COMPANY
- ----------- ------------------------
Date: May 8, 1997 By:/s/ Michael Robinson
Michael Robinson
Executive Vice President,
Chief Financial Officer
(Principal Financial
Officer and Duly
Authorized Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000787465
<NAME> HARDWICK HOLDING COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 23,833
<INT-BEARING-DEPOSITS> 25
<FED-FUNDS-SOLD> 17,400
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 117,644
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 283,100
<ALLOWANCE> 7,196
<TOTAL-ASSETS> 461,516
<DEPOSITS> 403,647
<SHORT-TERM> 4,390
<LIABILITIES-OTHER> 4,733
<LONG-TERM> 710
0
0
<COMMON> 2,081
<OTHER-SE> 45,955
<TOTAL-LIABILITIES-AND-EQUITY> 431,516
<INTEREST-LOAN> 6,472
<INTEREST-INVEST> 1,768
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 8,240
<INTEREST-DEPOSIT> 3,314
<INTEREST-EXPENSE> 3,382
<INTEREST-INCOME-NET> 4,858
<LOAN-LOSSES> 500
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<EXPENSE-OTHER> 4,587
<INCOME-PRETAX> 3,189
<INCOME-PRE-EXTRAORDINARY> 3,189
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,268
<EPS-PRIMARY> .57
<EPS-DILUTED> 0
<YIELD-ACTUAL> 8.40
<LOANS-NON> 1,887
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<ALLOWANCE-OPEN> 6,778
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<RECOVERIES> 93
<ALLOWANCE-CLOSE> 7,196
<ALLOWANCE-DOMESTIC> 7,196
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
