<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) THE SECURITIES EXCHANGE ACT OF
1934 For quarter ended September 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period to
------ ------
Commission file number: 0-15624
-------
SECOND BANCORP, INCORPORATED
-----------------------------------------------------
(exact name of registrant as specified in its charter)
Ohio 34-1547453
---- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
108 Main Ave. Warren, Ohio 44482-1311
-------------------------- ----------
(Address of principal executive offices) (Zip Code)
(216) 841-0123
--------------
Registrant's telephone number, including area code
Not applicable
--------------
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods 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 issuer's classes of
common stock, as of the latest practical date.
Common Stock, without par value -- 2,557,926 shares outstanding as of October
31, 1995.
Page 1 of 15
<PAGE> 2
SECOND BANCORP, INC. AND SUBSIDIARY
INDEX
Page
Number
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated balance sheets -
September 30, 1995 and 1994 and December 31, 1994 ....................3
Consolidated statements of income -
Three months and nine months ended September 30, 1995 and 1994 ... 4
Consolidated statements of cash flows -
Nine months ended September 30, 1995 and 1994........................ 5
Consolidated statement of shareholders' equity -
Year ended December 31, 1994 and
nine months ended September 30, 1995 ...........6
Notes to consolidated financial statements - September 30, 1995 ............7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations .. 9-11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ..................................12
Item 2. Changes in Securities ...........................12
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 ....................................................13
Statement 11 Re: Computation of Earnings Per Share...................14
Schedule 27 ....................................................15
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<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
SECOND BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) September 30 December 31 September 30
1995 1994 1994
- --------------------------------------------------------------------------------------------------------------------------
ASSETS (unaudited) (*) (unaudited)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash and Demand Balances Due from Banks $35,242 $30,546 $30,640
Federal Funds Sold 0 0 22,000
Securities:
Held-to-Maturity (market value $123,631,
$135,631 and $120,252, respectively) 121,074 140,260 122,602
Available-for-Sale 94,131 86,953 90,668
-------- ------- -------
Total Securities 215,205 227,213 213,270
Loans:
Commercial 268,363 238,053 230,446
Consumer 199,195 202,343 196,101
Real Estate 65,482 65,502 60,414
Real Estate Loans Held-for-Sale 1,403 0 0
-------- ------- -------
Total Loans 534,443 505,898 486,961
Reserve for Loan Losses 6,278 6,126 6,248
-------- ------- -------
Net Loans 528,165 499,772 480,713
Premises and Equipment 6,097 5,765 4,754
Accrued Interest Receivable 5,282 4,828 4,162
Goodwill and Intangible Assets 4,815 5,565 5,854
Other Assets 21,825 13,500 14,819
-------- -------- --------
Total Assets $816,631 $787,189 $776,212
-------- -------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
- -------------------------------------------------------------------------------------------------------------------------
Liabilities:
Demand Deposits (non-interest bearing) $77,368 $83,486 $79,591
Insured Money Market and Interest
Checking Accounts 118,334 116,935 112,474
Savings Deposits 120,170 129,791 132,625
Time Deposits 327,361 285,551 306,045
------- ------- -------
Total Deposits 643,233 615,763 630,735
Federal Funds Purchased and Securities Sold Under
Agreements to Repurchase 89,618 94,758 67,233
Note Payable 5,000 5,000 0
Borrowed Funds 5,761 3,668 10,535
Federal Home Loan Bank Advances 7,486 7,748 7,832
Accrued Expenses and Other Liabilities 4,014 4,369 4,410
------- ------- -------
Total Liabilities 755,112 731,306 720,745
Shareholders' Equity:
Preferred Stock, no par value;
Series A: 1,500,000 shares authorized, 718,750 shares
issued and 714,850, 718,750 and 718,750 shares
outstanding, respectively 13,163 13,235 13,235
Series B: authorized 1,500,000 shares 0 0 0
Common Stock, no par value; 10,000,000
shares authorized and 2,529,267 and 2,509,316
and 2,503,197 shares issued, respectively 13,546 13,140 13,038
Unrealized Holding Losses (684) (2,820) (2,023)
Retained Earnings 35,494 32,328 31,217
-------- -------- --------
Total Shareholders' Equity 61,519 55,883 55,467
-------- -------- --------
Total Liabilities and
Shareholders' Equity $816,631 $787,189 $776,212
-------- -------- --------
</TABLE>
(*) The balance sheet at December 31, 1994 has been derived from the audited
financial statements at that date.
-3-
<PAGE> 4
SECOND BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(Dollars in Thousands, Except Per Share Data) For the Three Months For the Nine Months
Ended September 30 Ended September 30
---------------------- ----------------------
1995 1994 1995 1994
---------------------- ----------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans (including fees):
Taxable $12,384 $10,350 $35,845 $29,901
Exempt from Federal Income Taxes 209 193 646 559
Investment Securities:
Taxable 2,703 2,161 8,315 5,595
Exempt from Federal Income Taxes 398 448 1,228 1,212
Federal Funds Sold 103 77 422 189
Time Deposits in Banks and Other
Interest Bearing Assets 0 0 0 14
----------------------------------------------------
Total Interest Income 15,797 13,229 46,456 37,470
INTEREST EXPENSE
Deposits 6,565 4,671 18,683 13,391
Federal Funds Purchased and Securities
Sold Under Agreements to Repurchase 1,018 759 3,281 1,693
Note Payable 111 0 334 0
Other Borrowed Funds 51 48 141 116
Federal Home Loan Bank Advances 116 109 352 260
----------------------------------------------------
Total Interest Expense 7,861 5,587 22,791 15,460
----------------------------------------------------
NET INTEREST INCOME 7,936 7,642 23,665 22,010
Provision for Loan Losses 709 570 1,878 1,890
----------------------------------------------------
Net Interest Income after Provision
for Loan Losses 7,227 7,072 21,787 20,120
NON-INTEREST INCOME
Trust Fees 555 506 1,655 1,519
Service Charges on Deposit Accounts 630 508 1,787 1,361
Security (Losses) Gains 0 (20) (67) 30
Other 582 266 1,651 776
----------------------------------------------------
Total Non-Interest Income 1,767 1,260 5,026 3,686
NON-INTEREST EXPENSE
Salaries and Employee Benefits 3,043 2,645 8,848 7,541
Net Occupancy 797 648 2,219 1,888
Assessment on Deposits and Other Taxes 445 511 1,510 1,483
Professional Services 313 341 1,029 931
Equipment 328 258 1,047 859
Data Processing Services 245 274 784 837
Amortization of Goodwill and Other Intangibles 250 202 750 558
Other 1,052 1,135 3,331 3,113
----------------------------------------------------
Total Non-Interest Expense 6,473 6,014 19,518 17,210
----------------------------------------------------
Income before Federal Income Taxes 2,521 2,318 7,295 6,596
Income Tax Expense 654 622 1,882 1,735
----------------------------------------------------
NET INCOME $1,867 $1,696 $5,413 $4,861
Preferred Stock Dividends (268) (270) (806) (809)
----------------------------------------------------
Net Income Applicable to Common Stock $1,599 $1,426 $4,607 $4,052
====================================================
Per Common Share Data:
Primary Earnings $0.63 $0.57 $1.82 $1.61
Fully Diluted Earnings $0.56 $0.51 $1.62 $1.47
Dividends Declared $0.19 $0.16 0.57 0.48
Weighted Average Number of
Primary Common Shares Outstanding 2,550,128 2,511,579 2,534,301 2,506,677
</TABLE>
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<PAGE> 5
CONSOLIDATED STATEMENTS OF CASH FLOWS
SECOND BANCORP, INC, and SUBSIDIARY
<TABLE>
<CAPTION>
For the Nine Months Ended September 30
--------------------------------------
(Dollars In Thousands) 1995 1994
-------------------- ---- ----
<S> <C> <C>
OPERATING ACTIVITIES
- ---------------------------------------------------------
Net Income $5,413 $4,861
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Provision for Loan Losses 1,878 1,890
Provison for Depreciation 792 691
Provision for Amortization of Intangibles 750 558
Goodwill Disposed from Sale of Student Loans 0 82
Amortization of Investment Discount and Premium 462 1,234
Amortization of Time Deposit with Banks and Other
Interest Bearing Assets Discount and Premium 0 (13)
Deferred Income Taxes (116) (1,174)
Securities Losses (Gains) 67 (30)
Other Gains, net (167) (45)
(Increase) Decrease in Interest Receivable (454) 922
Increase in Interest Payable 935 637
Originations of Loans Held-for-Sale (14,642) (7,153)
Proceeds from Sale of Loans Held-for-Sale 13,181 32,587
(Increase) in Other Assets (9,306) (3,555)
(Decrease) Increase in Other Liabilities (1,290) 361
------------------------------------
Net Cash (Used by) Provided by Operating Activities (2,497) 31,853
INVESTING ACTIVITIES
- ---------------------------------------------------------
Proceeds from Maturities of Securities - Held-to-Maturity 17,209 8,623
Proceeds from Maturities of Securities - Available-for-Sale 29,102 10,579
Proceeds from Sales of Securities - Held-to-Maturity 1,991 0
Proceeds from Sales of Securities - Available-for-Sale 24,360 36,062
Purchase of Securities - Held-to-Maturity (250) (73,842)
Purchase of Securities - Available-for-Sale (57,700) (35,245)
Net Decrease in Time Deposits with
Banks and Other Interest Bearing Accounts 0 1,007
Deposits Acquired - Branch Acquisitions 0 65,945
Premium Paid for Acquired Deposits 0 (3,112)
Net Increase in Revolving Credit Receivables (962) 0
Net Increase in Loans (27,696) (42,155)
Net Increase in Premises and Equipment (1,109) (1,052)
------------------------------------
Net Cash Used by Investing Activities (15,055) (33,190)
FINANCING ACTIVITIES
- ---------------------------------------------------------
Net (Decrease) Increase in Demand Deposits, Insured
Money Market and Interest Checking Accounts, and
Savings Deposits (14,340) 11,260
Net Increase (Decrease) in Time Deposits 41,810 (1,350)
Net (Decrease) Increase in Federal Funds Purchased
and Securities Sold Under Agreements
to Repurchase (5,140) 12,279
Net Increase In Borrowings 2,093 4,536
Net (Repayments) Advances from Federal Home Loan Bank (262) 6,864
Cash Dividends (2,247) (2,008)
Issuance of Common Stock 334 275
------------------------------------
Net Cash Provided by Financing Activities 22,248 31,856
------------------------------------
Increase in Cash and Cash Equivalents 4,696 30,519
------------------------------------
Cash and Cash Equivalents at Beginning of Year 30,546 22,121
------------------------------------
Cash and Cash Equivalents at End of Period $35,242 $52,640
====================================
</TABLE>
Supplementary Cash Flow Information: Cash paid for 1) Federal income taxes -
$2,370,000 and $2,979,000 for the nine months ended September 30, 1995 and 1994,
respectively and 2) Interest - $21,856,000 and $14,789,000 for the nine months
ended September 30, 1995 and 1994, respectively 3) FAS 115 mark to market
adjustments on the Available-for-Sale portfolio totaled $2,029,000 and
$(3,065,000) for the nine months ended September 30, 1995 and 1994,
respectively, with a resulting period end unrealized holding loss adjustment of
$684,000 and $2,023,000, respectively.
-5-
<PAGE> 6
SECOND BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Unrealized
(Dollars in Thousands) Preferred Common Holding Retained
Stock Stock Losses Earnings Total
---------- -------- ----------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1993 $13,235 $12,763 $0 $28,364 $54,362
Net Income 6,643 6,643
Cash Dividends Declared
Common Stock (1,601) (1,601)
Preferred Stock (1,078) (1,078)
Issuance of Common Stock - Dividend
Reinvestment Plan 342 342
Exercise of Stock Options 35 35
Adjustment to Unrealized Gains (Losses) on
Available-for-Sale securities,
net of tax (2,820) (2,820)
------------ ------ ------- ------ -------
Balance, December 31, 1994 13,235 13,140 (2,820) 32,328 55,883
Net Income 5,413 5,413
Cash Dividends Declared
Common Stock (1,441) (1,441)
Preferred Stock (806) (806)
Issuance of Common Stock - Dividend
Reinvestment Plan 301 301
Exercise of Stock Options 33 33
Conversion of Preferred Stock to
Common Stock (72) 72 0
Adjustment to Unrealized Gains (Losses) on
Available-for-Sale securities, net of tax 2,136 2,136
-------- ------- ------ ------- -------
Balance, September 30, 1995 $13,163 $13,546 ($684) $35,494 $61,519
======== ======= ===== ======= ======
</TABLE>
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<PAGE> 7
SECOND BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1995
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the nine month period ended September 30,
1995 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1995. Certain reclassifications have been made to
amounts previously reported in order to conform with current period
presentations. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1994.
NOTE B - PER SHARE DATA
The per share data is based upon the weighted average number of shares,
including common stock equivalents, outstanding during the period, as restated
for the three for two stock split effective May 1, 1995.
NOTE C - FINANCIAL ACCOUNTING STANDARDS BOARD STATEMENT 114, "ACCOUNTING BY
CREDITORS FOR IMPAIRMENT OF LOANS".
Effective January 1, 1995, the Company adopted Financial Accounting Standards
Board Statement 114, "Accounting by creditors for impairment of loans". Under
the new standard, the 1995 reserve for loan losses related to loans that are
considered impaired is based on discounted cash flows using the loan's initial
effective interest rate and the fair value of the collateral for certain
collateral dependent loans. The effect of adopting this new standard did not
have a material effect on the company's results of operations.
The company's definition of impaired loans includes non-accrual and past due
loans. The reserve for loan losses related to impaired loans was approximately
$275,000.
-7-
<PAGE> 8
NOTE D - FINANCIAL ACCOUNTING STANDARDS BOARD STATEMENT 122, "ACCOUNTING FOR
MORTGAGE SERVICING RIGHTS".
Effective April 1, 1995, the Company adopted Financial Accounting Standards
Board Statement 122 (FAS No. 122), "Accounting for Mortgage Servicing Rights"
an amendment to FAS No. 65. FAS No. 122 requires, when mortgage loans are sold
and servicing is retained, a portion of the cost of originating a mortgage
loan to be allocated to the mortgage servicing rights based on its fair value
relative to the loan as a whole. To determine the fair value of the servicing
rights, the Company used a valuation model that calculates the present value of
future cash flows, incorporating, among other factors, the estimated future net
servicing income, the discount rate and prepayment speeds. FAS No. 122
prohibits retroactive application to 1994. Accordingly, the Company's financial
statement reporting for 1994 was accounted for under the original FAS No. 65.
The impact of FAS No. 122 on second and third quarter 1995 results was an
increase to net income of $53,000 and $31,000 or $.02 and $.01 per fully
diluted share, respectively.
-8-
<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Second Bancorp, Incorporated, (the "Company") is a one-bank holding company
which owns The Second National Bank of Warren (the "Bank"), a Warren, Ohio
based commercial bank. Operating through twenty-six branches and one loan
production office, the Bank offers a wide range of commercial and consumer
banking and trust services primarily to business and individual customers in
various communities in a five county area in northeastern Ohio.
The Bank focuses its marketing efforts primarily on local independent and
professional firms and individuals who are the owners and principals of such
firms. The Bank has emphasized commercial lending and market area expansion.
FINANCIAL CONDITION
At September 30, 1995, the Company had consolidated total assets of $817
million, deposits of $643 million and shareholders' equity of $62 million.
Since September 30, 1994, total assets have grown by 5%. Loan growth remains
strong with commercial loans increasing by 16% to exceed $268 million at the
end of the third quarter from a year ago, while total earning assets have
increased by 4% and now total $750 million or 91.8% of total assets. To
accommodate the demand for commercial lending , the Company deceased balances
in consumer loans and securities over the past year.
Funding growth has primarily been generated through time deposits and
repurchase agreements. While deposits have increased by 2% over the past year,
time deposits have increased by 7% to $327 million. Repurchase agreements have
increased by 33% from a year ago to total $90 million.
RESULTS OF OPERATIONS
GENERAL. The Company achieved net income of $1,867,000 for the third quarter
of 1995, 10% higher than the $1,696,000 earned during the same period last
year. On a per share basis, as restated to reflect the three for two stock
split of May 1, 1995, primary earnings for the quarter were $.63, up from the
$.57 per share reported for the third quarter of 1994. Fully diluted earnings
per share were $.56 for the third quarter of 1995, 10% greater than the $.51
per share reported for the same period in 1994. Return on assets (ROA) and
return on equity (ROE) were .93% and 13.61% respectively for the third quarter
of 1995 compared to .94% and 13.58% for last year's third quarter.
-9-
<PAGE> 10
For the first nine months of 1995, net income was $5,413,000, or 11% greater
than the $4,861,000 reported as net income for the first three quarters of
1994. Primary earnings per share were $1.82 for the first nine months of 1995
compared to $1.61 for the same period of 1994. Similarly, fully diluted
earnings per share increased from $1.47 for the first nine months of 1994 to
$1.62 for the same period of 1995. ROA and ROE were .90% and 13.52%,
respectively for the first three quarters of 1995, compared to .93% and 12.98%
for the same period of 1994.
NET INTEREST INCOME. The increase in net income for the third quarter of 1995
was in part due to a 4% increase in net interest income. Net interest income
was $7,936,000 for the third quarter of 1995 while net interest income for the
same period of 1994 was $7,642,000. The increase in net interest income for
the third quarter can be attributed to a 10% increase in average earning assets
to $744,516,000 for the most recent quarter offset partially by a decrease in
net interest margin from 4.72% for the third quarter of 1994 to 4.43% for the
latest quarter. The net interest margin for the third quarter was an
improvement from the 4.30% net interest margin reported for the second quarter
of 1995.
For the first nine months of 1995, net interest income was $23,665,000, or 7.5%
greater than the same period for 1994. Average earning assets increased by 14%
since last year to $745,617,000. Net interest margin for the first three
quarters of 1995 was 4.40% compared to 4.66% for the same period in 1994.
NON-INTEREST INCOME. Non-interest income showed significant improvement over
the past year. For the third quarter of 1995, deposit service charge income
increased by $122,000, or 24%, over the third quarter of 1994 while other
income improved by 219% or $316,000 as the Company generated increased income
from loan sales, new income programs and a bank owned life insurance program
used to offset future benefit costs. There were no security sales for the
quarter compared to sales that generated a $20,000 loss for the third quarter
of 1994.
On a year-to-date basis, non-interest income has increased by 36% to
$5,026,000. Deposit service charges have increased by 31% to $1,787,000 while
other income increased by 113% to $1,651,000. Security transactions generated a
$67,000 loss for the first nine months of 1995 compared to a $30,000 gain for
the same period in 1994.
NON-INTEREST EXPENSE. Third quarter 1995 expenses increased 7.6% over 1994's
third quarter. Increases in the categories of salaries and employee benefits,
net occupancy, equipment and amortization of goodwill and other intangibles
were all directly related to the late third quarter 1994 acquisition of four
Portage County, Ohio branches from the Resolution Trust Corporation. The
remaining four major expense categories all showed decreases from the third
quarter 1994 totals. On a year-to-date basis, non-interest expenses total
$19,518,000, or 13% greater than the first nine months of 1994.
-10-
<PAGE> 11
ASSET QUALITY. The Company's asset quality position remained strong with its
reserve for loan losses standing at 1.17% of total loans at the end of the
third quarter and its non-performing loans representing only .93% of
quarter-end loans. The Company's coverage ratio at the end of second quarter
of 1995 was 126%, 3 percentage points higher than at the end of the second
quater of 1995. Net charge-offs averaged an annualized .37% of total loans for
the quarter which is in line with the Company's charge-off levels for the last
two years. Annualized net charge-offs for the first nine months are .44% as
compared to .29% for the same period of 1994. An increase in consumer loans
charge-offs is primarily responsible for the increase.
LIQUIDITY AND CAPITAL RESOURCES. The Company provides funds for asset growth,
deposit withdrawals and other liability maturities through maturing securities,
payments made on loans, and through the acquisition of new deposits. The
Company also has the ability to borrow in excess of $20 million in overnight
funds through correspondent banks to satisfy short-term liquidity needs.
Shareholders' equity has increased by 11% over the past year, with retained
earnings increasing by 14%. Unrealized holding losses were $684,000 as of
September 30, 1995 which is an improvement of over $1,300,000 since September
30, 1994. The tier I leverage ratio was 7.07% as of September 30, 1995, up
from 6.70% as of the same date in 1994. Similarly, risk based capital ratio
increased from 10.85% as of September 30, 1995 to 11.00% as of the end of the
most recent quarter.
-11-
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS -
The Company is subject to various pending and threatened lawsuits in which
claims for monetary damages are asserted in the ordinary course of business.
While any litigation involves an element of uncertainty, in the opinion of
management, liabilities, if any, arising from such litigation or threat thereof
will not have a material impact on the financial position or results of
operations of the Company.
ITEM 2. CHANGES IN SECURITIES - Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -
(a) - (d) Second Bancorp, Incorporated's Annual Shareholders Meeting was held
on May 9, 1995. The results of the votes on the matters presented to
shareholders was reported in the June 30, 1995 Form 10-Q.
ITEM 5. OTHER INFORMATION - Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
The following exhibits are included herein:
(11) Statement re: computation of earnings per share
The Corporation did not file any reports on Form 8-K during the three months
ended September 30, 1995.
-12-
<PAGE> 13
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.
SECOND BANCORP, INC.
Date: November 10, 1995 /s/ David L. Kellerman
--------------------------------
David L. Kellerman, Treasurer
Signing on behalf of the registrant and
as principal accounting officer and
principal financial officer.
-13-
<PAGE> 1
EXHIBIT 11
SECOND BANCORP, INCORPORATED AND SUBSIDIARY
STATEMENT 11 RE: COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------ ------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
PRIMARY:
Average shares outstanding 2,526,228 2,501,622 2,518,932 2,496,333
Net effect of dilutive stock options -
based on the treasury stock method
using average market price. 23,900 9,957 15,369 10,344
---------- --------- --------- ---------
2,550,128 2,511,579 2,534,301 2,506,677
Net income applicable to Common Stock $1,599 $1,426 $4,607 $4,052
Per share amount $0.63 $0.57 $1.82 $1.62
FULLY DILUTED:
Average shares outstanding 2,526,228 2,501,622 2,518,932 2,496,333
Net effect of dilutive stock options -
based on the treasury stock method
using average market price or period-
end market price, whichever is higher. 29,440 11,099 29,704 12,726
Assumed conversion of $1.50 Preferred
Stock Series A-1 798,988 803,420 801,047 803,420
--------- --------- --------- ----------
3,354,656 3,316,141 3,349,683 3,312,479
Net income $1,867 $1,696 $5,413 $4,861
Per share amount $0.56 $0.51 $1.62 $1.47
</TABLE>
-14-
<TABLE> <S> <C>
<ARTICLE> 9
<RESTATED>
<CIK> 0000803112
<NAME> SECOND BANCORP, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 35,242
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 94,131
<INVESTMENTS-CARRYING> 121,074
<INVESTMENTS-MARKET> 123,631
<LOANS> 534,443
<ALLOWANCE> 6,278
<TOTAL-ASSETS> 816,631
<DEPOSITS> 643,233
<SHORT-TERM> 100,379
<LIABILITIES-OTHER> 4,014
<LONG-TERM> 7,486
<COMMON> 13,546
0
13,163
<OTHER-SE> 34,810
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<INTEREST-TOTAL> 15,797
<INTEREST-DEPOSIT> 6,565
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<INCOME-PRE-EXTRAORDINARY> 2,521
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<EPS-PRIMARY> .63
<EPS-DILUTED> .56
<YIELD-ACTUAL> 8.61
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<ALLOWANCE-CLOSE> 6,278
<ALLOWANCE-DOMESTIC> 6,278
<ALLOWANCE-FOREIGN> 0
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</TABLE>
