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 September 25, 1998
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 November 4, 1998, there were 3,505,196 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 -
September 25, 1998 (unaudited) and June 26, 1998 3
Consolidated Statements of Income (unaudited) -
Quarterly periods ended September 25, 1998
and September 26, 1997 4
Consolidated Statements of Cash Flows (unaudited) -
Quarterly periods ended September 25, 1998
and September 26, 1997 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 2. Changes in Securities 11
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)
September 25, June 26,
1998 1998
ASSETS
Cash and cash equivalents $ 4,477,077 $ 3,218,034
Cash segregated under Federal regulations 5,019 5,397
Receivable from brokers, dealers and
clearing organizations 3,780,254 8,342,188
Receivable from customers 131,034,188 123,667,772
Trading and investment securities,
at market value 10,585,158 12,470,571
Exchange memberships, at adjusted cost 838,100 838,100
Equipment and leasehold improvements,
less depreciation and amortization 5,015,298 4,993,196
Deferred income taxes 1,703,429 1,703,429
Other assets 11,055,227 12,754,076
Total Assets $ 168,493,750 $ 167,992,763
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Drafts payable $ 3,341,352 $ 0
Short term bank loans 7,200,000 18,900,000
Payable to brokers, dealers and clearing
organizations 7,519,960 6,134,290
Payable to customers 95,867,293 89,810,049
Securities sold, but not yet purchased,
at market value 1,608,214 2,550,751
Accounts payable, accrued compensation
and other liabilities 17,344,341 16,311,773
Total Liabilities 132,881,160 133,706,863
Stockholders' Equity
Common stock, $0.10 par value; Authorized
10,000,000 shares; Issued and outstanding
3,481,541 and 3,277,657 shares 348,155 327,767
Additional paid-in capital 17,272,408 15,430,595
Retained earnings 20,010,259 20,251,287
Less: subscriptions receivable -2,018,232 -1,723,749
Total Stockholders' Equity 35,612,590 34,285,900
Total Liabilities and Stockholders' Equity $ 168,493,750 $ 167,992,763
See notes to consolidated financial statements.
SCOTT & STRINGFELLOW FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Quarters Ended September 25, 1998 and September 26, 1997
(Unaudited)
September 25, September 26,
1998 1997
REVENUES
Commissions $ 13,363,363 $ 13,092,403
Principal transactions 2,952,811 3,937,695
Investment banking 2,015,213 3,284,357
Interest and dividends 2,882,349 2,266,577
Advisory and administrative service fees 2,672,686 2,692,741
Other -56,877 170,418
Total Revenues 23,829,545 25,444,191
EXPENSES
Employee compensation and benefits 14,564,914 16,331,921
Communications 1,261,153 1,033,227
Occupancy and equipment 1,424,218 1,225,729
Advertising and sales promotion 699,151 565,008
Postage, stationery and supplies 794,052 646,918
Brokerage, clearing and exchange fees 467,640 454,765
Data processing 520,391 455,752
Interest 1,153,111 915,322
Other operating expenses 1,508,332 1,241,085
Total Expenses 22,392,962 22,869,727
Income before income taxes 1,436,583 2,574,464
Income taxes 629,400 949,000
NET INCOME $ 807,183 $ 1,625,464
Earnings per share, basic $0.24 $0.51
Earnings per share, diluted $0.23 $0.48
Dividends declared per share $0.10 $0.09
Weighted average common shares outstanding 3,334,894 3,170,201
Weighted average common shares and dilutive
potential common shares outstanding 3,561,136 3,363,933
See notes to consolidated financial statements.
SCOTT & STRINGFELLOW FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Quarters Ended September 25, 1998 and September 26, 1997
(Unaudited)
September 25, September 26,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 807,183 $ 1,625,464
Adjustments to reconcile net income to net cash
provided by (used for) operating activities:
Depreciation and amortization 467,347 418,148
Allowance for doubtful accounts -20,366 15,677
Losses on dispositions of fixed assets 1,564 13,718
Changes in assets and liabilities:
Cash segregated under Federal regulations 378 363,519
Receivable from brokers, dealers and
clearing organizations 4,561,934 -3,847,286
Receivable from customers -7,359,384 -2,030,605
Trading securities 2,001,394 608,359
Other assets 1,998,717 -729,203
Payable to brokers, dealers and
clearing organizations 1,385,670 501,753
Payable to customers 6,057,244 12,497,025
Securities sold, but not yet purchased -942,537 359,604
Accounts payable, accrued compensation
and other liabilities 312,123 3,173,344
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES 9,271,267 12,969,517
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of not readily
marketable securities 84,123 0
Purchases of not readily marketable securities -200,104 0
Proceeds from disposition of fixed assets 9,024 918
Purchases of fixed assets -496,835 -462,210
Repayment of loans receivable 35,264 42,848
Increase in loans receivable -325,000 -883,125
NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES -893,528 -1,301,569
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in drafts payable 3,341,352 435,214
Net change in short term bank loans -11,700,000 -4,950,000
Cash dividends paid -327,766 -285,565
Purchase and retirement of common stock 0 -651,427
Issuance of common stock 1,567,718 827,160
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES -7,118,696 -4,624,618
Net increase (decrease) in cash and cash equivalents 1,259,043 7,043,330
Cash and cash equivalents at beginning of period 3,218,034 6,566,361
Cash and cash equivalents at end of period $ 4,477,077 $ 13,609,691
Cash paid during the period for interest $ 897,588 $ 631,894
Cash paid during the period for income taxes $ 712,733 $ 640,925
See notes to consolidated financial statements.
SCOTT & STRINGFELLOW FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
September 25, 1998
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 26,
1998.
As of July, 1998, the Company implemented the provisions of Statement of
Financial Accounting Standards No. 130 ("SFAS 130"), which establishes
standards for the reporting and presentation of comprehensive income. Under
the standard, comphrehensive income is divided into net income and other
comprehensive income. As the Company had no material items of other
comprehensive income during the period, the implementation of SFAS 130 had
no material effect on the consolidated financial statements.
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 September 25, 1998, S&S's
net capital of $18,554,304 was 14% of its aggregate debit balances and was
$15,893,439 in excess of its minimum regulatory requirement.
3. COMMON STOCK
During the quarter ended September 25, 1998, the Company issued 203,152
shares of common stock pursuant to the exercise of employee stock options
for net proceeds of $1,490,095. In addition, the Company issued 732 shares
to its outside directors, pursuant to a private placement exemption,
representing annual directors fees of $17,989. The Company did not
repurchase any shares during the period.
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 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 31 branch offices located in
Virginia, North Carolina, South Carolina, and West Virginia. As a full service
firm, S&S's securities brokerage activities include retail and institutional
brokerage and the distribution of mutual funds, money market funds, and
insurance products. S&S also offers specialized financial services including
individual retirement account custodial services, portfolio evaluation,
financial planning, and managed account services. S&S also provides loans to
clients which are secured by marketable securities held in margin accounts.
These brokerage activities are supported by an in-house equity research
department and trading desks for over-the-counter equities, municipal bonds,
and taxable fixed income securities. The Company's investment banking
activities include the management of and participation in underwritings of
corporate and municipal securities and financial advisory services to public
and private companies and municipalities. Additionally, SSCM provides
fee-based, investment advisory services to both individual and institutional
clients. As of September 25, 1998, the Company employed 630 people including
263 employees with full-time investment broker responsibilities.
The Company's profitability, to a large degree, is sensitive to the market
volume of trading in securities and the relative level and volatility of
securities' market prices. Approximately 75% 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 attempts to develop revenue sources
which are less sensitive to financial market conditions, 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 transaction volume. As a full service
firm, the Company's fixed cost structure is significantly higher than many of
its competitors, particularly discount and Internet brokerage firms.
PROPOSED MERGER WITH BB&T CORPORATION
On August 10, 1998, the Company announced that it had entered into an Agreement
and Plan of Reorganization with BB&T Corporation, a North Carolina corporation
("BB&T"). Pursuant to the agreement, the Company will be merged with and into
BB&T, with BB&T as the surviving corporation. Under the agreement, which is
subject to the approval of regulators and shareholders of the Company, one
share of BB&T common stock will be exchanged for each share of the Company's
common stock. On September 16, 1998, the agreement was amended to provide that
the merger would be accounted for as a purchase. The Company's shareholders
will vote on the transaction on January 13, 1999. The Company is currently
working with BB&T to obtain the required regulatory approvals. Subject to
receiving the required regulatory and shareholder approvals, the Company
expects the merger to close on or around February 2, 1999.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 25, 1998
The Company reported net income of $807,000 for the three months ended
September 25, 1998, which represented a 50% decline from the first quarter of
fiscal 1998. Pre-tax income declined by 44% from the prior year. The
Company's effective income tax rate increased to 44% for the period, compared
to 37% for the prior year, because of non-deductible merger-related expenses.
Diluted earnings per share of $0.23 declined by 52% from the same period last
year, as average common shares and dilutive potential shares outstanding were
approximately 6% higher than the prior year.
Total revenues for the quarter were $23,830,000, representing a decline of 6%
from the first quarter of fiscal 1998. Turbulent equity market conditions
during the months of August and September negatively impacted both underwriting
activity and individual investor confidence. Commissions on agency
transactions of $13,363,000 increased by 2% from the prior period while revenue
from principal transactions of $2,953,000 declined by 25%. Although
commissions on NYSE-listed stocks, mutual funds, and annuities increased from
the prior period, commissions and sales credits on over-the-counter stocks and
other exchange-listed stocks declined. Losses of $161,000 in the Company's
investment accounts negatively impacted principal transactions. However,
equity trading profits of $349,000, which are included in principal
transactions, remained positive despite the difficult market conditions.
Investment banking revenues of $2,015,000 declined by $1,269,000, or 39%, from
the prior period. Sales credits from managed equity underwritings declined by
$680,000 as only 1 such offering was completed during the quarter as compared
to 4 offerings during the first quarter of 1998. Underwriting management fees,
also included in investment banking revenues, declined by $416,000. Advisory
and administrative service fees of $2,673,000 were 1% lower than last year, as
increases in managed account fees of $490,000 and money market trail fees of
$195,000 offset a decline in advisory fees of $689,000, which was due to the
decline in assets under management of SSCM, as a result of the transfer of
advisory contracts to Atlantic Capital Management in February 1998.
Although revenues declined by 6% from the prior year, total expenses declined
by only 2% to $22,393,000 from $22,870,000 in 1998, reflecting the fact that
only a portion of the Company's costs are variable with revenue. Employee
compensation and benefits, the Company's largest expense item, declined by
$1,767,000, or 11%, as a result of lower levels of departmental bonuses, which
are based on revenues and departmental profitability, and discretionary
compensation, which is based on overall firm operating return on equity. In
addition, earnings on deferred compensation accounts, which are recorded as
compensation expense to the Company, were $443,000 less than the prior year as
a result of the decline in the equity market index during the period.
Non-compensation and non-interest expenses increased by $1,052,000, or 19%,
from the prior period as a result of continued growth in fixed costs related to
technology initiatives, growth in headcount, and expansion, as well as legal
matters and merger-related expenses. Communications expense increased by 22%
as a result of increased cost for long distance and data communications.
Occupancy and equipment expenses increased by 16% because of higher office
rent, associated with additional space leased in downtown Richmond as well as
new and expanded branch offices. Postage, stationery and supplies increased
by 23% as a result of office cabling projects as well as increased costs for
general supplies and printed materials. Advertising and sales promotion
expenses increased by 24% and included increased expenses for incentive sales
trips and a variety of other marketing and public relations expenses.
Increases in brokerage, clearing and exchange fees of 3% reflected the flat
trading volume while an increase of 14% in data processing expense reflected
the ongoing custom programming work being performed at our data processing
service bureau (not related to Year 2000 remediation.) Other operating
expenses, which increased by 22%, included merger-related legal and other
expenses of $100,000. In addition, the provision for legal losses and computer
consulting fees increased significantly from the prior year.
Interest and dividend revenues increased by $616,000, or 27%, as a result of
continued growth in receivable balances from customer margin accounts, which
were approximately 40% higher than during the comparable period one year ago.
Partially offsetting a $713,000 increase in customer margin interest was a
$124,000 decline in bank interest income due to lower average cash balances
held in reserve bank accounts under federal regulations governing the
protection of customer balances. Interest expense increased by $238,000, or
26%, primarily as a result of higher interest-bearing customer credit balances
and increased average bank borrowing levels. Overall, interest and dividend
income, net of interest expense, increased by $378,000, or 28%, from the same
period last year.
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 increases in the amounts payable to
customers and other short-term liabilities incurred in the normal course of the
Company's securities brokerage business.
For the three month period ended September 25, 1998, net cash provided by
operations was $9,271,000. In addition to net income of $807,000, cash flow
from operations was also provided by, among other items, an increase in
payables to customers of $6,057,000. 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 and therefore are of limited value as indicators of
long-term trends in the Company's liquidity and capital resources. However,
increases in customer credit balances (excess funds kept by customers with the
Company) have been a significant source of cash in recent periods. Cash of
$7,359,000 was used for increasing the receivable from customers balance,
primarily for increased levels of margin lending.
Net cash flow of $893,000 was used for investing activities, which included
fixed asset additions of $497,000 and the extension of $325,000 of loans,
primarily related to employee recruiting efforts.
Financing activities used net cash of $7,119,000, which included repayment of
short-term bank loans of $11,700,000, as offset by increases in outstanding
drafts and cash from the issuance of common stock of $1,568,000 as a result of
the exercise of stock options and repayments of obligations under the
Management Stock Purchase Loan Plan.
At September 25, 1998, approximately 89% of the Company's assets were liquid,
consisting mainly of cash or assets readily convertible into cash. The
Company's largest asset is its receivables 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, 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 $60,000,000 in approved lines
of credit was available to the Company at September 25, 1998, of which
$7,200,000 was 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 exceeded the minimum requirements. At September
25, 1998, the Company's net capital of $18,554,304 exceeded the minimum
requirement by $15,893,439. Net capital was comprised entirely of
stockholders' equity less certain regulatory adjustments.
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.
YEAR 2000 ISSUES
When the date changes to January 1, 2000, there is general concern that some
computer systems may not correctly identify the numeral "00" as the Year
2000, but instead as 1900 or some other date. Such an error could seriously
disrupt information processing, communications, and impede commerce.
Because the Company relies on information processing and communications to
conduct its business, the Year 2000 issue is of concern to the Company. In
response to this concern, the Company has formed a Year 2000 Committee,
which includes members of senior management, to identify and evaluate its
Year 2000 issues, and take corrective action. This committee reports to the
Audit Committee of the Board of Directors.
The Company relies heavily on a third party service bureau for processing
the vast majority of its business transactions. Communications from the
service bureau indicate that it (a) is aware of its Year 2000 issues, (b)
has assessed these issues, (c) has completed remediation of its core
computer processing programs to make them Year 2000 compliant as of March
31, 1998, and (d) has completed internal testing of the programs and placed
them into production as of June 30, 1998. On July 15, 1998, the service
bureau began the process of "street wide" testing of its interfaces with
major service providers and participants in the securities industry,
including stock exchanges, major banks, execution services providers,
clearing firms, depositories, and information service providers. A testing
schedule provided by the service bureau indicates the status of ongoing
"point to point" testing with these industry participants. The testing
schedule indicates that all participants have been notified, testing has
been completed with 6 participants and is currently scheduled for 10 other
participants. The service bureau expects this testing to be completed by
the end of April 1999. In addition, the service bureau will be
participating in a broad securities industry testing program in March and
April of 1999. The service bureau also has a program of monitoring the Year
2000 readiness of entities which it is dependent upon and has provided the
Company a status report of their dependencies. The Company believes the
service bureau is adequately preparing and will be ready to successfully
handle the Year 2000 event. However, any failure on the part of the
service bureau would result in a serious disruption to the Company's ability
to record and process transactions. Virtually all of the Company's revenues
are dependent on its ability to process securities transactions on behalf of
its own and customers' accounts. In the event the service bureau is unable
to process these transactions, the Company would encounter significant
operational difficulties. The Company does not currently have a contingency
plan in the event the service bureau is unable to cope with the Year 2000.
However, should the service bureau indicate at any time that it or its
service providers will be unable to be Year 2000 compliant by December 31,
1999, contingency plans would be developed at that time. Other scenarios
which would seriously disrupt the Company's operations would include any
major disruption in telephone or electrical service.
In addition to the data processing service bureau, the Company maintains
other computer systems to provide a variety of data processing tasks such as
general ledger, fixed asset accounting, trading support, broker workstation
and portfolio support. Most of these programs are believed to be Year 2000
compliant based upon the Company's communications with its vendors. Broker
workstation software has been upgraded for Year 2000 compliance at the
server level, while desktop level software is expected to be upgraded for
YEAR 2000 compliance by December 31, 1998. The Company relies on financial
institutions and service providers for telecommunications, financial
services, market quotes and information, printing, and other services which
are important to the continued operation of its business. The Company has
identified its critical third party service providers and continues to
monitor their readiness for the Year 2000. Where adequate information is
not yet on file for these providers, the Company plans to make further
written inquires prior to December 31, 1998.
The activities of the Year 2000 Committee have thus far been carried out
utilizing existing personnel. The cost of Year 2000 remediation on the part
of the major third party service bureau is not directly billed to the
Company or itemized in such a manner as to result in an explicit incremental
cost to the Company. Although the Company may employ additional personnel
for Year 2000-related tasks over the next 15 months, it is not anticipated
the costs to address the Year 2000 issues will have a material effect on its
financial position or results of operations.
PART II - OTHER INFORMATION
Item 2. Changes in Securities
On July 17, 1998, 732 shares of the Company's Common Stock, valued at
$17,989, were issued to the Company's three outside Directors as
consideration for their services as Directors for the fiscal year ended June
26, 1998. In issuing these securities, the Company is relying upon an
exemption from registration provided by Section 4(2) of the Securities Act
of 1933.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 - Statement Re: Computation of Per Share Earnings
27.1 - Financial Data Schedule BD
(b) Reports on Form 8-K
The Registrant filed a Current Report on Form 8-K on August 10, 1998,
which reported the announcement of the Company's plan to merge with BB&T
Corporation.
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. November 9, 1998
John Sherman, Jr.
President and Chief Executive Officer
(Principal Executive Officer)
/s/Mike D. Johnson November 9, 1998
Mike D. Johnston
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)<PAGE>
EXHIBIT 11
STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE
For the Three Months Ended
September 25, 1998 September 26,1997
Basic Diluted Basic Diluted
Weighted average shares
outstanding:
Common shares 3,334,894 3,334,894 3,170,201 3,170,201
Dilutive potential
common shares under
stock options 0 226,242 0 193,732
Weighted average common
shares and dilutive
potential common shares
outstanding 3,334,984 3,561,136 3,170,201 3,363,933
Net earnings applicable
to common shares $807,183 $807,183 $1,625,464 $1,625,464
Earnings per share $0.24 $0.23 $0.51 $0.48
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