QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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 period ended June 30, 1996
or
( ) Transition Report Pursuant to Section 13 of 15(d) of
the Securities Exchange Act of 1934
For the transition period from ----- to -----
--------------------
Commission file number 0-15123
I.R.S. Employer Identification Number 31-1182986
FIRST NATIONAL BANCORP, INC.
(an Illinois Corporation)
78 N. Chicago St.
Joliet, Illinois 60432
Telephone: (815) 726-4371
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
Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date: 1,215,902 shares of the
Company's Common Stock ($10.00 par value) were outstanding as of June 30, 1996.
<PAGE>
FIRST NATIONAL BANCORP, INC. AND SUBSIDIARIES
CONTENTS
Part I. Financial Information
Item 1. Financial Statements
a. Condensed Consolidated Balance Sheets
b. Condensed Consolidated Statements of Income
c. Condensed Consolidated Statements of Cash Flow
d. Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 6b. Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter ended June 30, 1996.
Signatures
<PAGE>
FIRST NATIONAL BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in Thousands)
<TABLE>
June 30, December 31,
1996 1995
--------- ------------
<S> <C> <C>
ASSETS
Cash and due from banks .................................... $ 40,847 $ 42,979
Securities
Available for sale .................................... $ 15,622 $ 17,337
Held to maturity (Fair value of $201,868 and $187,269
at June 30, 1996 and December 31, 1995) 203,636 185,374
----------------------
Total Securities .................................. $ 219,258 $ 202,711
----------------------
Federal funds sold ....................................... $ 32,420 $ 41,537
Loans:
Commercial ............................................ $ 76,835 $ 79,967
Agricultural .......................................... 7,578 8,815
Real estate ........................................... 220,170 210,631
Consumer .............................................. 134,689 133,346
Other ................................................. 1,279 998
----------------------
$ 440,551 $ 433,757
Less Unearned Discount ................................ (1,165) (1,909)
----------------------
$ 439,386 $ 431,848
Less Allowance for loan losses ........................ (4,362) (3,931)
----------------------
Loans, net ........................................ $ 435,024 $ 427,917
----------------------
Premises and equipment, net ................................ $ 17,672 $ 15,579
Other real estate owned ................................. 542 0
Intangibles,net ............................................ 11,045 11,580
Accrued interest and other assets ...................... 7,796 7,687
----------------------
TOTAL ASSETS ............................................... $ 764,604 $ 749,990
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Demand, non-interest bearing .......................... $ 112,753 $ 114,035
NOW accounts .......................................... 75,754 58,027
Money Market accounts ................................. 39,761 41,646
Savings ............................................... 159,793 152,128
Time deposits of $100,000 and over .................... 44,001 34,781
Other time deposits ................................... 203,745 204,520
----------------------
Total Deposits .................................... $ 635,807 $ 605,137
----------------------
Short-term borrowings ...................................... 46,779 64,771
Long-term debt ............................................. 7,326 7,701
Accrued interest and other liabilities ..................... 5,581 5,956
----------------------
Total Liabilities ................................. $ 695,493 $ 683,565
----------------------
STOCKHOLDERS' EQUITY
Common Stock ............................................... $ 12,159 $ 12,159
Additional paid in capital ................................. 8,846 8,846
Retained earnings .......................................... 48,166 45,519
Unrealized gain (loss) on securities available for sale, net (60) (99)
----------------------
Total Stockholders' Equity ....................... $ 69,111 $ 66,425
----------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................. $ 764,604 $ 749,990
======================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
FIRST NATIONAL BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Amounts in Thousands)
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and Fees on Loans ........................................... $ 9,506 $ 9,317 $18,890 $18,789
Interest on Securities:
Taxable ............................................................ $ 2,658 $ 2,311 $ 5,147 $ 4,571
Tax-exempt ......................................................... 507 557 1,015 1,161
----------------------------------------------------
Total Interest on Securities .............................. 3,165 2,868 6,162 5,732
----------------------------------------------------
Interest on Federal Funds Sold ....................................... 479 781 1,135 1,169
Interest on Deposits in other Financial Institutions ................. 0 0 0 3
----------------------------------------------------
Total Interest Income .................................................. $13,150 $12,966 $26,187 $25,693
----------------------------------------------------
INTEREST EXPENSE:
Interest on Deposits ................................................. $ 4,896 $ 4,515 $ 9,841 $ 8,477
Interest on Borrowings ............................................... 727 1,304 1,606 2,436
----------------------------------------------------
Total Interest Expense ................................................. $ 5,623 $ 5,819 $11,447 $10,913
----------------------------------------------------
Net Interest Income ................................................ $ 7,527 $ 7,147 $14,740 $14,780
Provision for Loan Losses .............................................. 300 279 607 558
----------------------------------------------------
Net Interest Income After
Provision for Loan Loss .......................................... $ 7,227 $ 6,868 $14,133 $14,222
----------------------------------------------------
OTHER INCOME:
Trust Department Fees ................................................ $ 236 $ 197 $ 562 $ 429
Service Fees ......................................................... 919 806 1,805 1,526
Net Securities Gains ................................................. 23 8 150 8
Other ................................................................ 102 283 203 405
----------------------------------------------------
Total Other Income ..................................................... $ 1,280 $ 1,294 $ 2,720 $ 2,368
----------------------------------------------------
OTHER EXPENSES:
Salaries and Employee Benefits ....................................... $ 2,558 $ 2,417 $ 5,261 $ 4,818
Occupancy Expense .................................................... 711 702 1,394 1,364
Data Processing Expense .............................................. 270 238 478 414
Other Expenses ....................................................... 1,709 1,754 3,036 3,218
----------------------------------------------------
Total Other Expense .................................................... $ 5,248 $ 5,111 $10,169 $ 9,814
----------------------------------------------------
Income Before Income Taxes ......................................... $ 3,259 $ 3,051 $ 6,684 $ 6,776
Applicable Income Taxes ............................................... 1,069 928 2,213 2,148
----------------------------------------------------
NET INCOME ............................................................. $ 2,190 $ 2,123 $ 4,471 $ 4,628
====================================================
Earnings per Common Share .............................................. $ 1.80 $ 1.75 $ 3.68 $ 3.81
====================================================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
FIRST NATIONAL BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in Thousands)
<TABLE>
Six Months Ended
June 30,
--------------------
1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS ACTIVITIES
Net Income ..................................................... $ 4,471 $ 4,628
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation ................................................ 635 566
Provision for loan losses ................................... 607 558
Provision for deferred income taxes ......................... (81) 160
Amortization of bond premiums, net of (accretion) ........... 88 99
Net securities (gains) losses ............................... (150) (8)
Amortization of intangibles ................................. 535 523
(Increase) decrease in accrued interest and other assets .... (109) 1,492
Increase (decrease) in accrued interest and other liabilities (305) (1,318)
--------------------
Net Cash Provided By Operating Activities ................ $ 5,691 $ 6,700
--------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Interest bearing deposits in other financial institutions, net . $ 0 $ 4,198
Proceeds from maturities of securities ........................ 38,892 19,848
Proceeds from sale of securities .............................. 1,656 1,496
Purchase of securities ........................................ (56,983) (15,419)
Federal funds sold, net ....................................... 9,117 (63,356)
Loans made to customers, net of principal collections .......... (8,256) (12,425)
Purchase of premises and equipment ............................. (2,728) (1,297)
-------------------
Net Cash Provided By (Used In) Investing Activities ($18,302) ($66,955)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in time deposits ....................... $ 8,445 $ 30,534
Net increase (decrease) in all other deposit accounts .......... 22,225 8,104
Net increase (decrease) in securities sold under agreements
to repurchase ............................................ (20,083) 15,526
Other short-term borrowings, net ............................... 2,091 (4,561)
Principal paid on long-term debt ............................... (375) (250)
Dividends paid ................................................. (1,824) (1,519)
--------------------
Net Cash Provided By (Used In) Financing Activities .......... $ 10,479 $ 47,834
--------------------
Net Increase (Decrease) In Cash And Due From Banks ........... ($ 2,132) ($12,421)
CASH AND DUE FROM BANKS
Beginning ...................................................... 42,979 42,832
--------------------
Ending ......................................................... $ 40,847 $ 30,411
====================
SUPPLEMENTAL DISCLOSURES Cash payments for:
Interest paid to depositors .................................. $ 9,950 $ 8,403
Interest paid on borrowings .................................. 1,738 2,249
Income taxes ................................................. 2,001 1,991
Noncash activities:
Other real estate acquired in settlement of loans ............. $ 542 $ 678
Transfer of securities held to maturity to securities
available for sale ...................................... 0 0
Change in unrealized gain (loss) on securities
available for sale ...................................... 50 0
Related deferred income taxes ........................ (11) 0
</TABLE>
See Notes to Condensed Consolidated Financial Statements .........
<PAGE>
FIRST NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
JUNE 30, 1996
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying Condensed Consolidated Financial Statements have been
prepared in accordance with Generally Accepted Accounting Principles for interim
financial information and with the instructions for Form 10 - Q and Rule 10 - 01
of Regulation S - X. Accordingly, they do not include all the information and
footnotes required by Generally Accepted Accounting Principles for complete
Financial Statements. These statements include, however, all adjustments
(consisting of normal recurring accruals), which in the opinion of management
are considered necessary for the fair presentation of the results for the period
shown. Operating results for the three months and six months periods ending June
30,1996, are not necessarily indicative of the results that may be expected for
the year ended December 31, 1996.
These Consolidated Financial Statements include the accounts of the
Company and its wholly- owned subsidiaries, First National Bank of Joliet,
Southwest Suburban Bank, Bank of Lockport and Plano Bancshares, Inc. All
material intercompany accounts and transactions have been eliminated in
consolidation.
NOTE 2 - ACCOUNTING PRONOUNCEMENTS
Effective January 1, 1996 the Company adopted FASB Statement No. 121,
Accounting for the Impairment of Long-Lived Assets to Be Disposed Of and
Statement No. 122, Accounting for Mortgage Servicing Rights. The adoption of
these new accounting pronouncements did not have any effect on the June 30, 1996
condensed consolidated financial statements.
The following management's discussion and analysis focuses on the
consolidated financial position of First National Bancorp, Inc. ("The Company")
as of June 30, 1996, as compared to the position of the Company at December 31,
1995, as well as the results of operations for the three months and six months
ended June 30, 1996 and 1995. This discussion is intended to be read in
conjunction with the financial statements and notes.
HIGHLIGHTS
First National Bancorp's net income for the six months ended June 30,
1996 was $4,471,000 as compared to $4,628,000 for the same period in 1995.
Earnings per share for the six months ended June 30, 1996 was $3.68 versus $3.81
for the same period in 1995.
As of June 30, 1996, Total Assets were $764,604,000 versus $749,990,000
on December 31, 1995.
Total Stockholder's Equity at June 30, 1996 was 9.04% of assets as
compared to 8.86% at December 31, 1995.
<PAGE>
BALANCE SHEET
Total assets increased by $14,614,000, or 1.9%, from the totals
reported at December 31, 1995. An increase of $30,670,000 in Total Deposits and
a decrease of $17,992,000 in Short- Term Borrowings were offset primarily by a
decrease in Fed Funds Sold of $9,117,000, a Securities increase of $16,547,000
and a net Loans increase of $7,107,000.
Net Loans were $435,024,000 at June 30, 1996, which represented 56.9%
of total assets and 68.4% of total deposits compared to the December 31, 1995
total of $427,917,000 or 57.1% of total assets and 70.7% of total deposits.
Securities ended the period at $219,258,000 as compared to $202,711,000
on December 31, 1995, which represents an increase of 8.2%. The security
portfolio was 83.0% invested in U.S. Government obligations and 16.9% in
obligations of State and Political Subdivisions and .1% in Other Securities at
June 30, 1996.
The Allowance for loan losses increased $431,000 for the six month
period ended June 30, 1996 to $4,362,000 which represented 1.0% of loans, net of
unearned income. At December 31, 1995, the allowance for loan losses represented
.9% of such loan balances. A portion of this increase relates to the expansion
of the subsidiary Banks into the credit card lending program. Historical loss
experience in credit card lending is greater than the Banks' overall loss
experience, requiring an increase in the allowance for loan losses. Management
continues to monitor the current loan portfolio and assess potential future
charge-offs in order to determine the level of the allowance for loan losses.
Management believes that the allowance for loan losses is adequate to absorb
estimated future losses on the loan portfolio.
The deposit mix at June 30, 1996, consisted of $112,753,000 of
non-interest bearing deposits (17.7% of total deposits) and $523,054,000 of
interest bearing deposits ( 82.3% of total deposits). This compares to December
31, 1995 totals of $114,035,000 non- interest bearing deposits (18.8% of total
deposits ) and $491,102,000 of interest-bearing deposits (81.2% of total
deposits).
Tier 1 Capital at June 30, 1996 was 12.6% compared to 12.1% at December
31, 1995. Banking regulations require bank holding companies to maintain a Tier
1 Capital ratio of at least 6.0% to be considered "well capitalized".
INCOME STATEMENT
Net interest income for the first six months was .3% lower than in the
same period in 1995. This decrease is due to a lower yield environment and loan
origination fee income in 1996 as compared to the first six months of 1995. For
the three months ended June 30, 1996, net interest income increased 5.3% over
the same period in 1995.
Other income for the first six months increased $352,000 or 14.9% over
the same period in 1995. This is due primarily to increased service charges on
deposit accounts of $164,000 , and increased securities gains of $142,000. For
the three month period ending June 30, 1996, other income was $14,000 or 1.1%
lower than the same period in 1995.
For the six months ending June 30, 1996, Other Expenses were $355,000
or 3.6% higher than the same period in 1995. Accounting for most of the change
were higher salary and benefit costs, and an increase in intangible amortization
and data processing expenses. The three month period ending June 30, 1996
reflects an increase of $137,000 or 2.7% over the same period in 1995.
<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 thereunto duly authorized.
FIRST NATIONAL BANCORP, INC.
(REGISTRANT)
DATE: AUGUST 9, 1996
/s/ Kevin T. Reardon /s/ Albert G. D'Ottavio
- ------------------------- ------------------------------
Kevin T. Reardon Albert G. D'Ottavio
Chairman of the Board President
Chief Executive Officer Principal Accounting Officer
& Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFROMATION EXTRACTED FROM THE JUNE 30,
1996 10-Q OF FIRST NATIONAL BANCORP, INC. AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 40,847
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 32,420
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 15,622
<INVESTMENTS-CARRYING> 203,636
<INVESTMENTS-MARKET> 201,868
<LOANS> 439,386
<ALLOWANCE> 4,362
<TOTAL-ASSETS> 764,604
<DEPOSITS> 635,807
<SHORT-TERM> 46,779
<LIABILITIES-OTHER> 5,581
<LONG-TERM> 7,326
0
0
<COMMON> 12,159
<OTHER-SE> 56,952
<TOTAL-LIABILITIES-AND-EQUITY> 764,604
<INTEREST-LOAN> 18,890
<INTEREST-INVEST> 6,162
<INTEREST-OTHER> 1,135
<INTEREST-TOTAL> 26,187
<INTEREST-DEPOSIT> 9,841
<INTEREST-EXPENSE> 11,447
<INTEREST-INCOME-NET> 14,740
<LOAN-LOSSES> 607
<SECURITIES-GAINS> 150
<EXPENSE-OTHER> 10,169
<INCOME-PRETAX> 6,684
<INCOME-PRE-EXTRAORDINARY> 4,471
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,471
<EPS-PRIMARY> 3.68
<EPS-DILUTED> 3.68
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,931
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 4,362
<ALLOWANCE-DOMESTIC> 4,362
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
