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 December 31, 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 0-15105
SCOTT & STRINGFELLOW FINANCIAL, INC.
(Exact name of Registrant as specified in its charter)
Virginia 54-1315256
State or other jurisdiction of I.R.S. Employer Identification No.
Incorporation or Organization
909 East Main Street Richmond, Virginia 23219
(Address of principal executive offices) (zip code)
(804) 643-1811
(Registrant's telephone number, including area code)
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 ....
On February 7, 1997, there were 2,089,339 shares of Scott & Stringfellow
Financial, Inc. Common stock, par value $.10, issued and outstanding.
SCOTT & STRINGFELLOW FINANCIAL, INC.
INDEX
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Financial Condition -
December 31, 1996 (unaudited) and June 28, 1996 3
Consolidated Statements of Income (unaudited) -
Three months ended December 31, 1996
and December 31, 1995 4
Consolidated Statements of Income (unaudited) -
Six months ended December 31, 1996
and December 31, 1995 5
Consolidated Statements of Cash Flows (unaudited) -
Six months ended December 31, 1996
and December 31, 1995 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to a Vote of
Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 12
EXHIBITS
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SCOTT & STRINGFELLOW FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
December 31, June 28,
1996 1996
ASSETS
Cash and cash equivalents $ 7,072,824 $ 4,604,319
Cash segregated under Federal regulations 2,245,913 627
Receivable from brokers, dealers and
clearing organizations 4,095,718 4,773,883
Receivable from customers 83,431,579 78,691,390
Trading and investment securities,
at market value 13,565,937 12,940,722
Exchange memberships, at adjusted cost 838,100 838,100
Equipment and leasehold improvements,
less depreciation and amortization 4,038,202 2,973,023
Deferred income taxes 661,429 639,429
Other assets 10,278,083 8,787,079
Total Assets $ 126,227,785$ 114,248,572
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Drafts payable $ 2,316,235 $ 4,068,235
Short term bank loans 0 3,600,000
Payable to brokers, dealers and clearing
organizations 3,268,041 2,227,376
Payable to customers 79,371,644 60,577,764
Securities sold, but not yet purchased,
at market value 1,355,505 2,372,116
Accounts payable, accrued compensation
and other liabilities 12,510,213 11,912,646
Payable to shareholders for purchase and
retirement of common stock 0 3,800,000
Total Liabilities 98,821,638 88,558,137
Stockholders' Equity
Common stock, $0.10 par value; Authorized
10,000,000 shares; Issued and outstanding
2,049,239 and 2,022,475 shares 204,924 202,247
Additional paid-in capital 11,163,511 10,426,723
Retained earnings 16,513,552 15,537,305
Less: subscriptions receivable -475,840 -475,840
Total Stockholders' Equity 27,406,147 25,690,435
Total Liabilities and Stockholders' Equity $ 126,227,785$ 114,248,572
See notes to consolidated financial statements.
SCOTT & STRINGFELLOW FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended December 31, 1996 and December 31, 1995
(Unaudited)
December 31, December 31,
1996 1995
REVENUES
Commissions $ 10,336,335 $ 9,228,801
Principal transactions 3,534,498 2,697,781
Investment banking 2,151,180 2,882,380
Interest and dividends 2,020,108 1,647,814
Advisory and administrative service fees 1,804,600 1,070,450
Other 121,561 64,012
Total Revenues 19,968,282 17,591,238
EXPENSES
Employee compensation and benefits 12,536,229 11,219,662
Communications 892,414 794,208
Occupancy and equipment 1,052,499 746,269
Advertising and sales promotion 614,887 497,474
Postage, stationery and supplies 565,599 512,773
Brokerage, clearing and exchange fees 376,804 299,566
Data processing 341,599 281,234
Interest 761,654 560,270
Other operating expenses 1,379,182 961,009
Total Expenses 18,520,867 15,872,465
Income before income taxes 1,447,415 1,718,773
Income taxes 531,400 685,000
NET INCOME $ 916,015 $ 1,078,773
Earnings per share $0.45 $0.50
Dividends declared per share $0.12 $0.10
Weighted average common shares and
common stock equivalents outstanding 2,054,325 2,141,288
See notes to consolidated financial statements.
SCOTT & STRINGFELLOW FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Six Months Ended December 31, 1996 and December 31, 1995
(Unaudited)
December 31, December 31,
1996 1995
REVENUES
Commissions $ 19,718,391 $ 18,690,783
Principal transactions 6,685,761 5,308,029
Investment banking 4,180,993 5,880,866
Interest and dividends 3,781,455 3,249,820
Advisory and administrative service fees 3,359,740 1,981,543
Other 185,710 134,590
Total Revenues 37,912,050 35,245,631
EXPENSES
Employee compensation and benefits 23,686,816 22,480,825
Communications 1,821,920 1,586,512
Occupancy and equipment 2,037,394 1,488,002
Advertising and sales promotion 1,047,346 854,010
Postage, stationery and supplies 1,155,195 1,001,578
Brokerage, clearing and exchange fees 759,947 612,527
Data processing 688,069 540,618
Interest 1,389,487 1,118,311
Other operating expenses 2,534,064 1,938,977
Total Expenses 35,120,238 31,621,360
Income before income taxes 2,791,812 3,624,271
Income taxes 1,019,400 1,325,000
NET INCOME $ 1,772,412 $ 2,299,271
Earnings per share $0.87 $1.07
Dividends declared per share $0.24 $0.20
Weighted average common shares and
common stock equivalents outstanding 2,047,490 2,131,675
See notes to consolidated financial statements.
SCOTT & STRINGFELLOW FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended December 31, 1996 and December 31, 1995
(Unaudited)
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,772,412 $ 2,299,271
Adjustments to reconcile net income to net cash
provided by (used for) operating activities:
Depreciation and amortization 751,094 410,246
Deferred income taxes -22,000 -54,000
Loss on disposition of fixed assets 143,043 0
Changes in assets and liabilities:
Cash segregated under Federal regulations -2,245,286 5,767
Receivable from brokers, dealers and
clearing organizations 678,165 -2,066,952
Receivable from customers -4,740,189 -4,809,519
Trading securities -649,017 -1,263,325
Other assets 543,720 -1,100,454
Payable to brokers, dealers and
clearing organizations 1,040,665 297,162
Payable to customers 18,793,880 6,597,693
Securities sold, but not yet purchased -1,016,611 143,147
Accounts payable, accrued compensation
and other liabilities 618,351 3,663,884
NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES 15,668,227 4,122,920
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in drafts payable -1,752,000 3,087,487
Net change in short term bank loans -3,600,000 -3,600,000
Cash dividends paid -507,605 -423,124
Purchase and retirement of common stock -4,242,021 -19,140
Issuance of common stock 872,143 369,130
NET CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES -9,229,483 -585,287
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of not readily
marketable securities 74,752 98,403
Purchases of not readily marketable securities -50,950 -288,549
Proceeds from disposition of fixed assets 4,545 0
Purchases of fixed assets -1,957,456 -505,084
Repayment of loans receivable 46,488 53,206
Increase in loans receivable -2,087,618 -511,418
NET CASH PROVIDED BY (USED FOR)
INVESTING ACTIVITIES -3,970,239 -1,153,442
Net increase (decrease) in cash and cash equivalents 2,468,505 2,384,191
Cash and cash equivalents at beginning of period 4,604,319 3,761,381
Cash and cash equivalents at end of period $ 7,072,824 $ 6,145,572
Cash paid during the period for interest $ 1,318,517 $ 1,135,696
Cash paid during the period for income taxes 1,271,675 1,185,481
See notes to consolidated financial statements.
SCOTT & STRINGFELLOW FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
December 31, 1996
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
Scott & Stringfellow Financial, Inc. and its subsidiaries (collectively the
"Company"), Scott & Stringfellow, Inc. ("S&S"), Scott & Stringfellow Capital
Management, Inc. ("SSCM"), and Scott & Stringfellow Realty, Inc. S&S, the
Company's principal subsidiary, is a broker-dealer registered under the
Securities Exchange Act of 1934. SSCM is an investment advisor registered
under the Investment Advisors Act of 1940.
These interim consolidated financial statements are unaudited; however, such
information reflects all normal recurring adjustments which, in the opinion
of management, are necessary for a fair presentation of the results for the
period in accordance with generally accepted accounting principles. The
nature of the Company's business is such that the results of any interim
period are not necessarily indicative of the results which might be expected
for the full fiscal year. The notes included herein should be read in
conjunction with the notes to the consolidated financial statements included
in the Company's annual audited report for the fiscal year ended June 28,
1996.
2. NET CAPITAL REQUIREMENTS
As a registered broker-dealer and a member of the New York Stock Exchange
("NYSE"), the Company's wholly-owned subsidiary, S&S, is subject to the
Securities and Exchange Commission's Uniform Net Capital Rule (Rule 15c3-1).
S&S has elected to utilize the alternative method of the Rule, which
prohibits a broker-dealer from engaging in any transactions which would
cause its "net capital" to be less than 2% of its "aggregate debit balances"
arising from customer transactions, as those terms are defined in the Rule.
The NYSE may also impose restrictions on S&S's business if its net capital
falls below 5% of aggregate debit balances. At December 31, 1996, the
Company's net capital of $13,575,145 was 16% of its aggregate debit balances
and was $11,821,647 in excess of its minimum regulatory requirement.
3. COMMON STOCK
During the quarter ended December 31, 1996, the Company issued 3,312 shares
of common stock pursuant to the exercise of employee stock options for net
proceeds of $34,714. The Company also issued 8,408 shares of common stock
to the Employee Stock Purchase Plan for net proceeds of $143,203. In
addition, the Company issued 30,000 shares of common stock, under a private
placement exemption, to newly hired employees in connection with their
recruitment for net proceeds of $540,000. The Company repurchases its common
shares in the open market under a plan approved by the Board of Directors.
The Company did not repurchase any shares during the quarter and had
remaining authority to repurchase 288,181 shares at December 31, 1996.
4. LEGAL PROCEEDINGS
The Company and its subsidiaries are from time to time named as defendants
in legal actions incidental to its securities brokerage and investment
banking activities. Management believes that all pending claims and
lawsuits of which it has knowledge will be resolved with no material adverse
effect on the overall financial condition of the Company, although the
resolution of such matters might have a material adverse impact on the
operating results for any given quarterly accounting period.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company's primary subsidiary, S&S, conducts a full-service, securities
brokerage and investment banking business through 28 branch offices located in
Virginia, North Carolina, South Carolina, and West Virginia. Its primary
business is retail securities brokerage with an emphasis on equity securities
and mutual funds. Other significant activities and services include
institutional securities brokerage, management of and participation in the
underwriting of corporate and municipal securities, investment management
services through SSCM, corporate and municipal financial advisory services,
trading of fixed income and equity securities, primary investment research,
individual retirement account custodial services, and money market cash
management services. As of December 31, 1996, the Company employed 542 people
including 235 employees with full-time investment broker responsibilities.
The Company's profitability, to a large degree, is sensitive to the volume of
trading in securities and the volatility and general level of securities'
market prices. Approximately 77% of the Company's total revenue is generated
by commissions and sales credits, or mark-ups, on securities transactions.
Many of the Company's activities have high operating costs which do not
decrease proportionately with reduced levels of activity and may even increase
during such periods. Moreover, many of these operating costs may increase at
a proportionately greater rate than revenues during periods of increased
activity. While the Company is currently attempting to build additional
fee-based revenue in an attempt to improve the stability of revenues and
earnings, its profitability is adversely affected by sustained periods of
reduced transaction volume or loss of brokerage clients. The Company's
profitability is also adversely affected when it is unable to compensate for
increases in fixed costs through the pricing of its services or increased
volume. In particular, to meet competitive industry conditions the Company
incurs significant costs associated with technology, investment broker
recruiting, and continual improvement of the Company's investment research
capabilities.
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1996
For the quarter ended December 31, 1996, net earnings were $916,015, a 15%
decline from $1,078,773 reported for the same period last year. Earnings per
share for the second quarter declined by 10%, from $0.50 to $0.45, as average
shares outstanding were 4% lower than during the comparable period of fiscal
1996.
Total revenues for the second quarter of fiscal 1997 were $19,968,282, an
increase of 14% from $17,591,238 reported for the same period last year. The
most significant change in quarterly operating results was a $731,200, or 25%,
decline in investment banking fees. These fees are very dependent on the
number and timing of managed equity offerings in which the Company participates
and, due to their high profitability, represent a substantial swing factor in
quarterly results. Because of generally favorable equity market conditions,
other categories of revenue posted increases from the year-earlier period.
Commissions from agency transactions increased by 12% to $10,336,335, with
mutual fund sales and commissions on trades of exchange-listed equity
securities accounting for most of this increase. Principal transactions
increased by 31% to $3,534,498, as trading profits and sales credits on
over-the-counter equity transactions more than offset continuing declines in
revenue from municipal bond transactions. The Company continues to enjoy a
significant increase in revenues from the advisory and administrative service
fees category, which were $734,150 higher than the second quarter of fiscal
1996. Combined revenues from investment advisory fees and managed accounts fees
were approximately $453,000, or 127%, higher than the year-earlier period.
During December 1996, the Company effected a significant organizational
consolidation in its institutional municipal bond sales and trading and public
finance functions. The departments responsible for these functions previously
operated out of both the Company's Richmond headquarters and its Lynchburg,
Virginia office. To increase efficiency and administrative control, these
functions were consolidated in the Richmond office. This change also included
a workforce reduction of approximately 6 employees.
Total expenses increased by 17% to $18,520,867 from $15,872,465 in the
year-earlier period. Employee compensation and benefits, the Company's largest
expense item, increased by $1,316,657, or 12%, as a result of higher sales
commissions and other variable compensation expense associated with the higher
level of revenues. The increase in compensation expense accounted for
approximately 50% of the overall increase in total expense. Other categories
of operating expenses also increased significantly from the year-earlier
quarter. Occupancy and equipment increased by 41%, primarily as a result of
higher depreciation expense associated with investment broker workstations and
other computer systems installed as part of the Company's technology plan.
Overall, non-compensation, non-interest expenses increased by 28% from the
year-earlier quarter. The consumption of more resources as a result of a
larger workforce, increased transaction volume, as well as initiatives such as
the technology plan and investment broker recruiting efforts have combined to
increase the Company's overall operating expense ratio. Included in other
operating expenses for the second fiscal quarter was a $143,000 expense on
retirement of fixed assets associated with the replacement of investment broker
workstations which was substantially completed during the quarter.
Interest and dividend revenues increased by 23% as a result of continued growth
in receivable balances from customer margin accounts, which were approximately
20% higher during the quarter ended December 31, 1996 than during the
comparable period one year ago. Interest expense increased by 36% as a result
of interest paid on higher levels of customer credit balances on IRA accounts.
Overall, interest and dividend income, net of interest expense, increased by
approximately 16% from the year-earlier period.
RESULTS OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1996
The results of operations for the six month period ended December 31, 1996 were
characterized by increasing revenues being more than offset by higher expenses,
resulting in moderately lower levels of profitability. For the six month
period, net income was $1,772,412 or $0.87 per share as compared to $2,299,271
or $1.07 per share reported for the same period in fiscal 1996. As with the
quarterly comparison, last year's results for the six month period benefited
from the completion of managed underwritten equity offerings; investment
banking revenues in the six month period ending December 31, 1996 declined by
$1,699,873, or 29%, from the year-earlier period.
Total revenues for the first half of fiscal 1997 were $37,912,050, an increase
of 8% from the first half of fiscal 1996. The previously mentioned decline in
investment banking revenues was more than offset by increases in revenue from
both agency commissions and principal transactions in equity securities,
including mutual funds. Due primarily to increases in assets under management
within the Company's investment advisory and managed account services, revenue
from advisory and administrative services fees for the comparative six month
periods increased by 70%, from $1,981,543 to $3,359,740.
Total operating revenues for the first half of fiscal 1997 were $35,120,238,
an increase of 11% from the first half of fiscal 1996. Employee compensation
and benefits expense increased by 5% from the previous period primarily as a
result of higher commissions and other variable compensation associated with
the higher levels of revenue. Occupancy and equipment expense increased
significantly by $549,392, or 37%, primarily as a result of higher depreciation
on the addition of new broker workstations and other technology equipment as
well as renovations and relocations of office space. In the other operating
expense category, increases in employment agency fees for recent recruiting
efforts, legal settlements, computer consulting expense and the retirement of
fixed associated with the technology plan all contributed to an overall
increase of 31% from the year-earlier period.
Interest income for the six month period, net of interest expense, increased
by 12% from the year-earlier period due to the same factors cited in the
discussion of results for the three month period ended December 31, 1996.
LIQUIDITY AND CAPITAL RESOURCES
As set forth in the Consolidated Statement of Cash Flows contained in this
report, the Company's primary sources of cash flow are the net cash provided
from the earnings of the Company and from increases in the amounts payable to
customers and other short-term indebtedness incurred in the normal course of
the Company's securities brokerage business.
For the six month period ended December 31, 1996, net cash provided by
operations was $15,668,227. The largest source of cash from operations was a
significant increase of $18,793,880 in customer credit balance. Customer
credit balances have steadily grown since June 28, 1996. Due primarily to the
relatively high balances payable to customers as of December 31, 1996, the
Company had $2,245,913 of cash segregated in a special reserve account under
federal regulations, the purpose of which is to protect customer balances.
Another significant use of cash was an increase in receivable from customers
balances of $4,740,189. Because of the nature of the Company's business, the
changes in operating asset and liability account balances relative to net
income for any particular accounting period can be quite large and somewhat
arbitrary. These changes are normally short term in nature and therefore are
not very useful indicators of long-term trends in the Company's liquidity and
capital resources. However, the Company has generally experienced increases
in balances payable to and receivable from customers over recent fiscal
periods, which has the effect of reducing its equity to total assets ratio.
This ratio was 22% as of December 31, 1996.
Net cash flow of $9,229,483, was used by financing activities, principally
including the settlement of the Company's $3,800,000 Dutch Auction tender offer
during the period as well as repayment of short term bank loans of $3,600,000.
Open market purchases and retirements of the Company's stock during the quarter
totaled $442,021. Investing activities during the period used net cash of
$3,970,239, which included $1,957,456 in purchases of equipment and leasehold
improvements, mainly associated with implementation of the technology plan
which was substantially completed as of December 31, 1996. In addition,
$2,087,618 of loans receivable were extended, primarily due to investment
broker recruiting efforts during the period. Over the six month period, the
Company's overall net cash position increased by $2,468,505.
At December 31, 1996, approximately 87% of the Company's assets were liquid,
consisting mainly of cash or assets readily convertible into cash. The
Company's largest asset is its receivable from customers, representing
borrowings from the Company by customers to finance the purchase of securities
on margin. Such receivables from customers are substantially financed by
customer credit balances (excess funds kept by customers with the Company),
short-term bank borrowings and equity capital. The Company utilizes short-term
bank borrowings under established lines of credit with several banking
institutions. A total of $58,000,000 in approved lines of credit was available
to the Company at December 31, 1996, with no loans outstanding. The Company
had no other debt obligations outstanding at that date.
The Company is subject to the net capital requirements of the Securities and
Exchange Commission ("SEC") and the New York Stock Exchange which are designed
to measure the general financial soundness and liquidity of broker-dealers.
The Company has consistently operated in excess of the minimum requirements.
At December 31, 1996, the Company's net capital of $13,575,145 exceeded the
minimum requirement by $11,821,647. Net capital was comprised entirely of
stockholders' equity less certain regulatory adjustments. As a result of
growth in customer receivable balances and the use of capital for fixed assets,
loans associated with recruiting investment brokers, and the Dutch Auction
tender offer, as well as other factors, the Company's ratio of net capital to
aggregate debit items has declined in recent periods. This ratio was 16% at
December 31, 1996, as compared to 24% at December 31, 1995.
Management believes that funds provided by earnings combined with its existing
liquid capital base and its present lines of credit, are fully adequate to meet
the Company's financing needs for the foreseeable future.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None Reportable
Item 2. Changes in Securities
On November 25, 1996 the Company issued 30,000 shares of common stock to 2
newly hired employees in connection with their recruitment at a price of
$18.00 per share for net proceeds of $540,000. The form of consideration
received was cash, with the employees' source of funds derived from proceeds
of promissory notes issued by the employees to the Company pursuant to
employment agreements. In issuing these shares, the Company is relying on
the private offering exemption under section 4(2) of the Securities Act of
1933. There were no underwriters or placing agents involved in these
transactions.
Item 3. Defaults upon Senior Securities - None Reportable
Item 4. Submission of Matters to a Vote of Security Holders - None
Reportable
Item 5. Other Information
On February 4, 1997, Mike D. Johnston was named Chief Financial Officer of
the Company. Charles E. Mintz, the former Chief Financial Officer, remains
with the Company as Senior Vice President and Director of Retail Markets.
Item 6: Exhibits and Reports on 8-K
(a) Exhibits
Exhibit 11 - Statement Re: Computation of Per Share Earnings - See
Separate Document
Financial Data Schedule BD - See Separate Document
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter ended December
31, 1996.
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.
SCOTT & STRINGFELLOW FINANCIAL, INC. (Registrant)
Signatures Date
/s/ John Sherman, Jr. February 13, 1997
John Sherman, Jr.
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Mike D. Johnston February 13, 1997
Mike D. Johnston
Vice President and Chief Financial Officer
(Principal Financial Officer)<PAGE>
EXHIBIT 11
STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE
For the Three Months Ended December 31, 1996 December 31, 1995
Primary Fully Diluted Primary Fully Diluted
Weighted average shares
outstanding:
Common shares 2,019,828 2,019,828 2,125,762 2,125,762
Dilutive shares
available under
stock options 34,497 36,320 15,526 16,463
Weighted average common
shares and common
stock equivalents
outstanding 2,054,325 2,056,148 2,141,288 2,142,225
Net earnings applicable
to common shares $916,015 $916,015 $1,078,773 $1,078,773
Earnings per share $0.45 $0.45 $0.50 $0.50
For the Six Months Ended December 31, 1996 December 31, 1995
Primary Fully Diluted Primary Fully Diluted
Weighted average shares
outstanding:
Common shares 2,014,458 2,014,458 2,117,598 2,117,598
Dilutive shares
available under
stock options 33,032 36,320 14,077 16,463
Weighted average common
shares and common
stock equivalents
outstanding 2,047,490 2,050,778 2,131,675 2,134,061
Net earnings applicable
to common shares $1,772,412 $1,772,412 $2,299,271 $2,299,271
Earnings per share $0.87 $0.87 $1.07 $1.07
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