<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
of the Securities and Exchange Act of 1934
For the Quarter Ended March 31, 1994
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 No. (0-16136)
INVESTORS BANK CORP.
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 41-1566301
- - --------------------- ----------
(state or other jurisdiction of (IRS employer
incorporation or reorganization) identification
number
200 East Lake Street, Wayzata, MN 55391
-----------------------------------------------------------
(Address of Principal Executive Offices Including Zip Code)
(612)475-8500
----------------------------------------------------
(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 and 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 practicable date: 3,425,564
at April 30, 1994. ---------------
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
INVESTORS BANK CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31
-------------------------
1994 1993
---------- ----------
<S> <C> <C>
INTEREST INCOME:
Interest on loans $13,739,998 $12,710,097
Interest on cash and investments 646,976 539,995
Interest and dividends on other assets 333,772 253,825
---------- ----------
TOTAL INTEREST INCOME 14,720,746 13,503,917
---------- ----------
INTEREST EXPENSE:
Interest on deposits 4,981,380 5,025,752
Interest on borrowings 3,225,097 2,632,939
---------- ----------
TOTAL INTEREST EXPENSE 8,206,477 7,658,691
---------- ----------
NET INTEREST INCOME 6,514,269 5,845,226
PROVISION FOR LOAN LOSSES 117,800 189,300
---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 6,396,469 5,655,926
NONINTEREST INCOME:
Mortgage banking 3,450,130 3,008,512
Loan servicing fees 1,307,179 823,658
Commissions on title insurance sales 214,113 86,028
Commissions on annuity sales 159,911 180,057
Other 194,150 265,641
---------- ----------
TOTAL NONINTEREST INCOME 5,325,483 4,363,896
---------- ----------
NONINTEREST EXPENSE:
Employee compensation and benefits 4,175,268 3,302,241
Occupancy and equipment 1,004,849 882,208
Advertising 268,318 180,000
Federal deposit insurance premiums 342,501 331,830
Other 1,410,168 1,183,929
---------- ----------
TOTAL NONINTEREST EXPENSE 7,201,104 5,880,208
---------- ----------
EARNINGS BEFORE INCOME TAX EXPENSE AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 4,520,848 4,139,614
INCOME TAX EXPENSE 1,857,266 1,658,516
---------- ----------
EARNINGS BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE 2,663,582 2,481,098
CUMULATIVE EFFECT OF ACCOUNTING CHANGE 125,000
---------- ----------
NET EARNINGS $ 2,663,582 $ 2,606,098
---------- ----------
---------- ----------
NET EARNINGS AVAILABLE FOR COMMON
STOCKHOLDERS $ 2,454,830 $ 2,364,136
---------- ----------
---------- ----------
EARNINGS PER COMMON SHARE:
BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE $0.66 $0.63
CUMULATIVE EFFECT OF ACCOUNTING CHANGE 0.00 0.03
---- ----
NET EARNINGS $0.66 $0.66
----- -----
----- -----
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES 3,734,945 3,591,203
---------- ----------
---------- ----------
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
INVESTORS BANK CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
------------ ------------
<S> <C> <C>
ASSETS
Cash and cash $ 61,922,829 $ 58,314,515
Investment securities 29,283,335 27,778,989
Mortgage loans held for sale 51,961,599 88,351,696
Mortgage loans 715,383,116 698,895,887
Consumer loans 95,764,147 91,124,400
Federal Home Loan Bank stock 16,250,000 16,250,000
Capitalized servicing rights 4,164,682 4,425,281
Office properties and equipment 16,392,707 15,731,333
Accrued interest receivable 3,971,490 3,653,453
Foreclosed real estate 6,221,825 6,674,799
Other assets 9,395,626 5,884,713
-------------- --------------
TOTAL ASSETS $ 1,010,711,356 $ 1,017,085,066
-------------- --------------
-------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $ 609,848,290 $ 603,412,708
Notes payable 310,000,000 325,000,000
Advances and loan payments from
borrowers held under escrow 9,033,234 8,409,797
Income taxes 960,533 549,263
Subordinated debt 25,800,000 25,800,000
Other liabilities 5,151,664 6,760,035
-------------- --------------
TOTAL LIABILITIES 960,793,721 969,931,803
-------------- --------------
STOCKHOLDERS' EQUITY:
Preferred stock 3,036 3,036
Common stock 34,256 33,255
Additional paid-in capital 20,343,657 19,111,504
Unamortized restricted stock (1,171,230) (675,808)
Retained earnings 30,707,916 28,681,276
-------------- --------------
TOTAL STOCKHOLDERS' EQUITY 49,917,635 47,153,263
-------------- --------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,010,711,356 $ 1,017,085,066
-------------- --------------
-------------- --------------
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
INVESTORS BANK CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31
-------------------------
1994 1993
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 2,663,582 $ 2,606,098
Adjustments to reconcile net earnings to net cash
provided (used) by operating activities:
Depreciation and amortization 549,105 726,220
Amortization of deferred loan fees and discounts (414,791) (417,413)
Gain on sales of loan servicing rights (1,800,501) (1,773,803)
Proceeds from sales of loan servicing rights 2,481,712 2,560,729
Gain on sales of mortgage loans (1,509,426) (1,143,145)
Provision for loan and real estate losses 108,711 189,300
Prepaid income taxes 184,074 119,307
Change in:
Capitalized servicing rights (649,561) (358,118)
Accrued interest receivable (318,037) (191,915)
Interest payable on deposit accounts 552,300 7,185
Mortgage loans held for sale 37,899,523 (11,641,385)
Other, net (4,824,010) (1,939,147)
---------- ----------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 34,922,681 (11,256,087)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase in loans (20,829,985) (25,409,005)
Purchase of investment securities (2,604,346) (1,667,617)
Maturities of investment securities 1,100,000 1,250,000
Sale of foreclosed real estate 462,063 1,150,289
Increase in office properties and equipment (981,530) (163,447)
---------- ----------
NET CASH USED BY INVESTING ACTIVITIES (22,853,798) (24,839,780)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits 5,883,282 24,638,664
Proceeds from FHLB advances 90,000,000 75,000,000
Repayment of FHLB advances (105,000,000) (82,000,000)
Net proceeds from common stock transactions 669,654 63,838
Dividends on preferred stock (208,752) (241,963)
Dividends on common stock (428,190) (308,418)
Net increase in advances and loan payments
from borrowers held under escrow 623,437 4,299,137
---------- ----------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES (8,460,569) 21,451,258
---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,608,314 (14,644,609)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 58,314,515 40,179,006
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $61,922,829 $25,534,397
---------- ----------
---------- ----------
SUPPLEMENTAL DISCLOSURES:
Cash paid during the year for:
Interest $7,730,596 $7,543,179
Income taxes 965,000 2,730,000
Noncash transfer of loans to foreclosed real estate 0 532,247
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
INVESTORS BANK CORP.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Investors
Bank Corp., a Delaware corporation (the "Company") and its wholly owned
subsidiary Investors Savings Bank, F.S.B. (the "Bank"), a federally chartered
savings bank with deposits insured by the Federal Deposit Insurance Corporation
(FDIC) through the Savings Association Insurance Fund (SAIF). The statements
have been prepared in accordance with the instructions to Form 10-Q and
therefore do not include all information and footnotes necessary for a complete
presentation of financial position, results of operations, and changes in cash
flows. The data presented herein is unaudited, but in the opinion of management
of the Company, includes all adjustments, consisting only of normal recurring
adjustments necessary for a fair presentation of the financial position of the
Company and its subsidiary and the results of their operations and cash flows.
The Company believes such presentation of the financial position is adequate to
make the information presented not misleading. Results for the interim periods
are not necessarily indicative of results for the entire year.
NOTE 2. INVESTMENT SECURITIES
The Company adopted the provisions of Statement of Financial Accounting
Standards (SFAS) No. 115, ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND EQUITY
Securities, as of January 1, 1994. Under SFAS No. 115, the Company must classify
its debt and marketable equity securities in one of three categories: trading,
available for sale, or held to maturity. Trading securities are bought and held
principally for the purpose of selling them in the near term. Securities
available for sale include securities that management intends to use as part of
its asset/liability strategy or that may be sold in response to changes in
interest rate, changes in prepayment risk, the need to increase regulatory
capital, or similar factors. The Company has the ability and intent to hold its
securities to maturity. Accordingly, there are no securities held in a trading
account or available for sale and the adoption of SFAS No. 115 had no impact on
the Company's consolidated financial statements as of January 1, 1994.
<PAGE>
NOTE 3. IMPAIRED LOANS
The Company adopted the provisions of SFAS No. 114, ACCOUNTING BY
CREDITORS FOR IMPAIRMENT OF A LOAN, as of January 1, 1994. SFAS No. 114
specifies how reserves for losses related to "impaired" loans should be
measured. A loan is considered impaired if it is probable that the Company will
be unable to collect all amounts due according to the contractual terms of the
loan agreement. When a loan is impaired, the Company will measure the amount of
impairment based on the present value of expected future cash flows, the loan's
observable market price or the fair value of any collateral. If foreclosure is
probable, the Company shall measure impairment based on the fair value of the
collateral. SFAS No. 114 does not apply to large groups of small balance,
homogeneous loans that are collectively evaluated for impairment. The adoption
of SFAS No. 114 had no effect on the consolidated financial statements as of
January 1, 1994.
NOTE 4. RESERVES FOR LOAN LOSSES
Included in mortgage loans are reserves for losses of $2,524,136 and
$2,414,254 at March 31, 1994 and December 31, 1993, respectively. Included in
consumer loans are reserves for losses of $569,173 and $566,332 at March 31,
1994 and December 31, 1993.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Investors Bank Corp.'s (the Company) net earnings increased 2% to $2.7
million for the three months ended March 31, 1994 from the same period last
year. Net earnings available for common shareholders were $2.5 million compared
to $2.4 million for the March 1993 quarter. Earnings per common share before the
cumulative effect of an accounting change were $.66 compared to $.63 in the 1993
first quarter. The March 1993 total earnings per common share of $.66 included
$.03 from recognition of the cumulative effect of a change in accounting method
to comply with Statement of Financial Accounting Standards (SFAS) No. 109,
"Accounting for Income Taxes". The increase in operating earnings in the 1994
first quarter was the result of higher net interest income and noninterest
income partially offset by greater noninterest expenses.
Net interest income for the quarter ended March 31, 1994 was $6.5 million,
up 11% from $5.8 million in the 1993 first quarter. The increase resulted from
growth in interest-earning assets, which grew 22% to an average of $926 million
during the quarter, up from $758 million in the year ago period. During the
latter part of 1993 and into 1994, the Company's mortgage banking operation
originated significant amounts of adjustable rate mortgage (ARM) loans which the
Company retains in its portfolio. Interest-earning assets were also increased to
a lesser extent by growth in consumer loans, primarily home equity loans, due to
continuing efforts by the Company to generate these types of assets. The
current interest rate environment supports demand for ARM loans and the Company
expects additional growth in ARMs and total interest-earning assets in the next
few months.
The increased net interest income resulting from the growth in
interest-earning assets was partially offset by a decline in the interest rate
spread from 2.84% in the first quarter of 1993 to 2.54% in the first quarter of
1994. Although market rates did not change substantially during the latter part
of 1993 and rose during the first quarter of 1994, asset yields and liability
costs declined between periods. Asset yields declined 77 basis points reflecting
the repricing of ARM loans indexed to market rates, the payoff of higher
yielding ARM loans and the addition of new ARM loans at lower initial yields.
Liability costs declined 47 basis points as significant amounts of market rate
accounts, certificates of deposit and FHLB advances repriced at lower rates than
a year ago. The net interest margin declined 26 basis points, from 3.04% to
2.78%, as the factors affecting the interest rate spread had a similar effect on
the margin. The Company expects increases in its spread and margin during the
remaining quarters in 1994 as a result of the recent increase in market rates.
Asset yields, especially on significant amounts of ARM loans which reprice based
on the one year Treasury bill rate and consumer loans which reprice with changes
in the prime rate, will be repricing upward but the Company's market place has
not increased deposit rates as rapidly.
<PAGE>
The provision for loan losses was $118 thousand for the March 1994 quarter
compared to $189 thousand for the same quarter a year ago. Based on management's
review of the loan portfolio, the 1994 provision was required only to increase
general reserves to compensate for the Company's loan growth.
Noninterest income for the 1994 first quarter increased 22% to $5.3 million
from $4.4 million a year ago. Mortgage banking income, which includes gain on
sale of mortgage loans and gain on sale of loan servicing rights, increased 15%
to $3.5 million and loan servicing fees were up 59% to $1.3 million.
The gain on sales of mortgage loans was $1.5 million for the March 1994
quarter, a 32% increase from the gain of $1.1 million for the same period last
year. The increase resulted primarily from a 25% increase in the amount of loans
sold to $182 million.
Gain on sales of loan servicing rights was $1.8 million in both the 1994
and 1993 first quarters. Although $164 million in servicing rights were sold in
the 1994 quarter, an 18% increase, market pricing was less favorable.
While the Company's strategy is to continue generating mortgage banking
income, the amounts of such income are affected by factors such as market
pricing, general demand for mortgage products, and the competitive environment
in the markets in which it originates mortgages. Because of the recent increase
in market interest rates, mortgage refinancing activity has declined
significantly and has reduced the amount of loans generated by the Company's
mortgage banking activity. As a result, the Company expects reduced gross
additions to its portfolio of loans serviced for others.
The Company's servicing fee income was $1.3 million in the March 1994
quarter, up 59% from $824 thousand in the March 1993 quarter. Between quarters
the average loans serviced for others increased 34% to $1.3 billion as the
Company continued its strategy of retaining a portion of the servicing rights on
loans generated by its mortgage banking activities. In addition, while the March
1993 quarter servicing fee income was reduced by a $203 thousand charge
reflecting higher than normal prepayments, no such reduction was necessary in
the March 1994 quarter. As a result of the reduced mortgage refinancing
activity, the Company does not expect a high level of prepayments during 1994.
The other categories of noninterest income increased 7% to $568 thousand
compared to $532 thousand in the same quarter last year. The Company's growing
title insurance business contributed to the additional income.
<PAGE>
Noninterest expense was $7.2 million, a 22% increase compared to the same
period last year. Approximately two-thirds of the increase was in employee
compensation and benefits which were up primarily due to increased staffing
required for three new retail bank offices and two new mortgage production
offices opened in the latter part of 1993 and early 1994. Staff was also added
to support growth in consumer lending, mortgage loan servicing and marketing.
Occupancy and equipment increased $123 thousand due to the costs of the new
banking and mortgage offices, relocating of the mortgage loan servicing group
and equipment to support expansion. Advertising increased by $88 thousand
because of significantly greater newspaper advertising to promote new products
and increased use of "point-of-sale" promotional materials. Federal deposit
insurance premiums increased $11 thousand because of increased deposits. The
Company expects that its deposit insurance premium rate will remain at 23 basis
points during 1994. Other noninterest expenses increased $226 thousand and
included greater data processing fees, supplies and other costs associated with
Company's growth and increased business activity.
FINANCIAL CONDITION
Total assets of the Company were $1.0 billion at March 31, 1994, which was
the same level as at December 31, 1993. However, there was some realignment of
interest-earning assets during the quarter. Chief among these was a decline of
$36 million in mortgage loans held for sale as the Company's mortgage production
pace slowed reflecting the significant decline in refinancing activity. Funds
provided by this reduction were used to increase loans by $21 million. Of the
increase, $16 million was in ARM loans and $5 million in consumer home equity
loans. Funds were also supplied by a $6 million increase in deposits which were
generated by new retail bank offices opened in late 1993. Funds were applied to
reduce FHLB advances by $15 million. Maximum advances from the FHLB during the
quarter were $325 million and were incurred during the initial part of January,
1994. The current market interest rate environment has increased demand for the
Company's ARM loan products and the Company expects increases during the next
few months in its ARM portfolio. While the Company continues to promote its
deposit products and expects deposit growth from its new offices, it plans to
continue using advances from the FHLB as a funding source when necessary.
Nonperforming assets were $8.3 million at March 31, 1994, down slightly
from $8.6 million at December 31, 1993. The decline was primarily in foreclosed
residential real estate from sale of a large property. Approximately $4.8
million of the total nonperforming assets is commercial real estate and the
Company expects to reduce this amount through sales during 1994.
<PAGE>
The Company intends to support the Bank's efforts to maintain a capital
level adequate to support its projected growth as well as maintain its "well
capitalized" status. Approximately $3.5 million in funds attained during the $23
million December 1992 subordinated debt offering remains in the parent company
and is available for future capital needs.
At March 31, 1994, the Bank met each of the three regulatory capital
standards to continue to be classified as a "well capitalized" institution. The
following is a summary of the Bank's capital position:
<TABLE>
<S> <C>
Tier 1 leverage (core) capital standard:
Adjusted total assets $1,008,969,479
Tier 1 capital 66,776,548
Tier 1 capital ratio 6.62%
Tier 1 risk based capital standard:
Risk adjusted total assets $591,944,856
Tier 1 capital 66,776,548
Tier 1 risk based capital ratio 11.28%
Risk based capital standard:
Risk adjusted assets $591,944,856
Risk based capital 69,740,700
Risk based capital ratio 11.78%
</TABLE>
Management believes the Bank will continue to meet all three "well
capitalized" standards in 1994.
In 1993, the Office of Thrift Supervision (OTS) issued its final
regulations on interest rate risk. Under this rule, effective January 1, 1994,
institutions deemed to have an "above normal" level of interest rate risk as
calculated by the OTS based on quarterly reports submitted by the Bank are
subject to a capital charge and must deduct a portion of that risk from total
risk based regulatory capital. At December 31, 1993, the Bank's required risk
based regulatory capital was not impacted by the interest rate risk rule. While
the Bank has not yet been notified by the OTS as to the impact of the rule on
its March 31, 1994 risk based capital, management does not believe the Bank will
be impacted by this rule during 1994.
<PAGE>
PART II.
ITEM 2. CHANGES IN SECURITIES
On May 3, 1994, the shareholders of the Company adopted an amendment to the
Company's Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 5,000,000 shares to 10,000,000 shares.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of shareholders of Investors Bank Corp. was held at 3:30
p.m. on Tuesday, May 3, 1994. Shareholders holding 3,026,530 shares, or
approximately 88% of the outstanding shares, were represented at the meeting by
proxy or in person. Matters submitted at the meeting for vote by the
shareholders were as follows:
a. Election of Directors
The following nominees were elected to serve as members of the Board
of Directors until the annual meeting of shareholders in 1997 or until such time
as a successor may be elected:
TABULATION OF VOTES
-----------------------------
FOR WITHHELD
--------- -----------
James M. Burkholder 2,956,835 69,695
Leonard E. Brown 2,922,436 104,094
b. Amendment to Certificate of Incorporation
Shareholders approved an amendment to the Company's Certificate of
Incorporation increasing the number of authorized shares of common stock from
5,000,000 to 10,000,000 by a vote of 2,933,031 shares, or 86%, in favor, 85,142
shares against, 6,925 shares abstained, and 1,432 shares not voted.
c. Approval of 1993 Stock Incentive Plan
Shareholders approved the Investors Bank Corp. 1993 Stock Incentive
Plan, pursuant to which the Company may issue stock options, restricted stock,
stock appreciation rights, dividend rights and other stock based incentives to
employees, and which provides for formula grants to nonemployee directors of
options to purchase 2,666 shares annually and eliminates further authorization
under existing plans, by a vote of 2,127,258 shares, or 62%, in favor, 154,353
shares against, 12,670 shares abstained, and 732,249 shares not voted.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4.1 Certificate of Amendment to Certificate of Incorporation
11. Computation of Earnings per Share
<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.
INVESTORS BANK CORP.
/s/ JAMES M. BURKHOLDER
-----------------------
James M. Burkholder
President
Chief Executive Officer
Dated: May 12, 1994
-----------------------
<PAGE>
EXHIBIT 11
INVESTORS BANK CORP.
COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
Three months ended
March 31
-----------------------
1994 1993 (1)
-------- --------
<S> <C> <C>
PRIMARY:
Average shares outstanding 3,391,702 3,286,128
Net effect of the assumed purchase of stock
under the stock option plan based on the
treasury stock method using average
market price 256,106 266,101
Net effect of the assumed exercise of common
stock warrants based on the treasury
stock method using average market price 87,137 38,973
--------- ---------
3,734,945 3,591,203
--------- ---------
--------- ---------
Earnings before preferred stock dividends and
cumulative effect of accounting change $2,663,582 $2,481,098
Preferred stock dividends 208,752 241,962
--------- ---------
Earnings for common stockholders before
cumulative effect of accounting change 2,454,830 2,239,136
Cumulative effect of accounting change 125,000
--------- ---------
Net earnings available for common stockholders $2,454,830 $2,364,136
--------- ---------
--------- ---------
Per common share:
Earnings for common stockholders before
cumulative effect of accounting change $0.66 $0.63
Cumulative effect of accounting change 0.00 0.03
---- ----
Net earnings available for common stockholders $0.66 $0.66
----- -----
----- -----
FULLY DILUTED:
Average shares outstanding 3,391,702 3,286,128
Net effect of the assumed purchase of stock
under the stock option plan based on the
treasury stock method using ending
market price 256,136 285,516
Net effect of the assumed exercise of common
stock warrants based on the treasury
stock method using ending market price 87,137 61,919
--------- ---------
3,734,975 3,633,563
--------- ---------
--------- ---------
Earnings before preferred stock dividends and
cumulative effect of accounting change $2,663,582 $2,481,098
Preferred stock dividends 208,752 241,962
--------- ---------
Earnings for common stockholders before
cumulative effect of accounting change 2,454,830 2,239,136
Cumulative effect of accounting change 125,000
--------- ---------
Net earnings available for common stockholders $2,454,830 $2,364,136
--------- ---------
--------- ---------
Per common share:
Earnings for common stockholders before
cumulative effect of accounting change $0.66 $0.62
Cumulative effect of accounting change 0.00 0.03
---- ----
Net earnings available for common stockholders $0.66 $0.65
----- -----
----- -----
<FN>
NOTE 1. Restated for the effects of the four-for-three common stock split on
December 31, 1993.
</TABLE>
