<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 2000.
Commission file number 0-15839
EMPIRE BANC CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Michigan
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(State or other jurisdiction of incorporation or organization)
1227 E. Front Street
Traverse City, Michigan
----------------------------------------
(Address of principal executive offices)
38-2727982
------------------------------------
(IRS Employer Identification Number)
49686-2928
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(Zip code)
(616) 922-2111
----------------------------------------------------
(Registrant's telephone number, including area code)
Not applicable
--------------------------------------------------------------------
(Former name, address and 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, and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
The number of shares outstanding of each of the issuer's classes of common
stock was 3,166,234 shares of no par common stock outstanding as of March 31,
2000.
<PAGE> 2
Empire Banc Corporation - Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31 December 31 March 31
(in thousands, except share data) 2000 1999 1999
<S> <C> <C> <C>
Assets
Cash and due from banks $ 13,875 $ 19,174 $ 12,900
Federal funds sold 2,400 3,300 15,300
-------- -------- --------
Cash and cash equivalents 16,275 22,474 28,200
Securities available for sale 95,946 100,765 112,579
Loans
Commercial 181,018 179,080 162,395
Residential real estate 89,138 80,505 68,713
Consumer 108,375 106,916 92,629
-------- -------- --------
Total loans 378,531 366,501 323,737
Allowance for loan losses (5,500) (5,400) (5,050)
-------- -------- --------
Net loans 373,031 361,101 318,687
Mortgage loans held for sale 427 2,218 2,543
Premises and equipment 5,715 5,938 5,549
Accrued interest receivable 3,295 3,009 3,196
Other assets 8,729 10,195 8,034
-------- -------- --------
Total assets $503,418 $505,700 $478,788
======== ======== ========
Liabilities
Deposits
Non-interest-bearing $ 57,461 $ 66,896 $ 53,228
Interest-bearing 366,660 351,527 357,316
-------- -------- --------
Total deposits 424,121 418,423 410,544
Federal funds purchased -- 3,000 --
Federal Home Loan Bank advances 25,000 30,000 17,000
Accrued interest payable 1,183 1,116 1,119
Other liabilities 6,937 7,275 8,185
-------- -------- --------
Total liabilities 457,241 459,814 436,848
Shareholders' equity
Preferred stock-$1 par value,
2,000,000 shares authorized, none outstanding
Common stock-no par value, 5,000,000 shares authorized,
shares outstanding: 3/31/00 & 12/31/99-3,166,234;
3/31/99-3,011,790 33,474 33,452 31,027
Retained earnings 13,792 13,251 10,353
Accumulated other comprehensive income (loss) (1,089) (817) 560
-------- -------- --------
Total shareholders' equity 46,177 45,886 41,940
-------- -------- --------
Total liabilities and shareholders' equity $503,418 $505,700 $478,788
======== ======== ========
- -------------------------------------------------------------------------------------------
See accompanying notes.
</TABLE>
<PAGE> 3
Empire Banc Corporation - Consolidated Statements of Income
<TABLE>
<CAPTION>
Year to Date
March 31
(in thousands, except per share data) 2000 1999
<S> <C> <C>
Interest income
Loans, including fees $8,362 $7,428
Securities: taxable 1,414 1,599
tax-exempt 100 80
Federal funds sold 48 148
------ ------
Total interest income 9,924 9,255
Interest expense
Deposits 4,013 3,748
Federal Home Loan Bank advances
and other borrowings 439 254
------ ------
Total interest expense 4,452 4,002
------ ------
Net interest income 5,472 5,253
Provision for loan losses 116 256
------ ------
Net interest income after
provision for loan losses 5,356 4,997
Non-interest income
Trust 1,125 832
Net gains from sale of mortgage loans 234 675
Deposit fees 477 384
Service charges 302 405
Loan service fees, net 136 65
Other income 25 27
------ ------
Total non-interest income 2,299 2,388
Non-interest expense
Salaries and employee benefits 2,952 3,141
Occupancy 314 333
Furniture and equipment 369 321
Outside processing and other services 171 233
Legal and professional 63 119
Business taxes 141 126
Merger & acquisition expense 514 --
Other expense 719 705
------ ------
Total non-interest expense 5,243 4,978
------ ------
Income before federal income taxes 2,412 2,407
Federal income taxes 921 797
------ ------
Net income $1,491 $1,610
====== ======
- --------------------------------------------------------------------------
</TABLE>
<PAGE> 4
Consolidated Statements of Income - Empire Banc Corporation
(continued)
<TABLE>
<CAPTION>
Year to date
March 31
(in thousands, except share data) 2000 1999
- --------------------------------------------------------------------
<S> <C> <C>
Basic earnings per share $ .47 $ .53
Diluted earnings per share .47 .51
Basic average shares outstanding 3,181 3,023
Diluted average shares outstanding 3,199 3,166
- --------------------------------------------------------------------
See accompanying notes.
</TABLE>
Consolidated Statements of Comprehensive Income
Empire Banc Corporation
<TABLE>
<CAPTION>
Year to date
March 31
(in thousands) 2000 1999
- --------------------------------------------------------------------
<S> <C> <C>
Net income $1,491 $1,610
Other comprehensive income (loss)
Net unrealized gains (losses) on securities
available for sale, net of tax (272) (404)
------ ------
Total other comprehensive income (loss) (272) (404)
------ -------
Comprehensive income $1,219 $1,206
====== ======
- --------------------------------------------------------------------
See accompanying notes.
</TABLE>
<PAGE> 5
Empire Banc Corporation - Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Year to Date
March 31
(in thousands) 2000 1999
<S> <C> <C>
Operating activities
Net income $ 1,491 $ 1,610
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation and amortization 298 248
Provision for loan losses 116 256
Mortgage loans originated for sale (12,235) (33,270)
Sale of mortgage loans 14,260 37,843
Net gain on loans held for sale (234) (675)
Net amortization/accretion on securities 50 103
Change in
Accrued interest receivable (286) (175)
Accrued interest payable 67 (1)
Other assets 1,546 (1,282)
Other liabilities (175) 154
------- -------
Total adjustments 3,407 3,201
------- -------
Net cash from operating activities 4,898 4,811
Investing activities
Securities available for sale
Proceeds from maturities, repayments and calls 5,320 17,686
Purchases (964) (10,581)
Loans granted net of repayments (12,046) (4,435)
Investment in real estate limited partnership (80) --
Premises and equipment expenditures, net (75) (294)
------- -------
Net cash from investing activities (7,845) 2,376
Financing activities
Net increase in deposits 5,698 405
Change in federal funds purchased (3,000) --
Cash dividends paid (950) (753)
Federal Home Loan Bank advances 4,000 3,000
Federal Home Loan Bank repayments (9,000) (3,000)
Issuance of common stock, net -- 21
------- -------
Net cash from financing activities (3,252) (327)
------- -------
Net change in cash and cash equivalents (6,199) 6,860
Beginning cash and cash equivalents 22,474 21,340
------- -------
Ending cash and cash equivalents $16,275 $28,200
======= =======
- ------------------------------------------------------------------------------
Interest paid $ 4,385 $ 4,002
Income taxes paid (refunded) (1,400) 30
- ------------------------------------------------------------------------------
See accompanying notes.
</TABLE>
<PAGE> 6
Empire Banc Corporation - Consolidated Statements of Changes in
Shareholders' Equity
<TABLE>
<CAPTION>
(in thousands) 2000 1999
<S> <C> <C>
- ----------------------------------------------------------------------------
Balance January 1 $45,886 $40,756
Net income 1,491 1,610
Common stock issued, net of
redemptions and tax benefits -- 744
Directors deferred compensation plan 22 --
Cash dividends (950) (766)
Change in net unrealized gain (loss)
on securities available for sale,
net of tax (272) (404)
------- -------
Balance March 31 $46,177 $41,940
======= =======
- ----------------------------------------------------------------------------
See accompanying notes.
</TABLE>
Notes to Consolidated Financial Statements
Note 1 Merger Agreement
On February 7, 2000 Empire Banc Corporation and Huntington Bancshares
Incorporated (Huntington) jointly announced they have signed a definitive
agreement for Huntington to acquire the Corporation. The Corporation
shareholders will receive 2.0355 Huntington shares for each share of
Corporation stock in a tax-free exchange. This is equivalent to approximately
$43.25 per share based on Huntington's closing stock price on February 4,
2000. The acquisition will be accounted for as a purchase, is subject to
normal regulatory and shareholder approvals, and is expected to close in June
of 2000. Huntington plans to issue approximately 6.5 million shares in
connection with the transaction, which are to be purchased on the open market.
Huntington is a regional bank holding company headquartered in Columbus, Ohio
with assets of $29 billion.
Note-2 The unaudited condensed consolidated financial statements include the
accounts of Empire Banc Corporation (the Corporation) and its wholly-owned
subsidiary, Empire National Bank (the Bank). These statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-Q and Rule 10-01
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 three month period
ending March 31, 2000 are not necessarily indicative of the results that may
be expected for the year ended December 31, 2000. For further information,
refer to the consolidated financial statements and footnotes thereto included
in the Corporation's Annual Report on Form 10-K for the year ended December 31,
1999.
<PAGE> 7
Note-3 Earnings per share is based on weighted-average common and
contingently issuable shares outstanding. Diluted earnings per share
further assumes the dilutive effect of additional common shares issuable
under stock options. A reconciliation of basic earnings per share and
diluted earnings per share is presented below:
<TABLE>
<CAPTION>
Three Months Ending
March 31,
(in thousands, except per share data) 2000 1999
- --------------------------------------------------------------------------
<S> <C> <C>
Net income $ 1,491 $ 1,610
======= =======
Basic earnings per share
Average common shares outstanding 3,166 3,012
Average contingently issuable shares 15 11
----- -----
3,181 3,023
===== =====
Basic earnings per share $ .47 $ .53
===== =====
Diluted earnings per share
Average shares outstanding, per above 3,181 3,023
Effect of stock options 18 143
----- -----
3,199 3,166
===== =====
Diluted earnings per share $ .47 $ .51
===== =====
- --------------------------------------------------------------------------
</TABLE>
<PAGE> 8
Management's Discussion and Analysis
Summary
Empire Banc Corporation's 2000 first quarter earnings were $1,491,000,
a $119,000, or 7%, decrease from 1999 first quarter results. These 2000 first
quarter earnings were influenced by $514,000 of expenses related to the
merger of Empire Banc Corporation and Huntington Bancshares. Basic and
diluted earnings per share were $.47 each in 2000 and $.53 and $.51 in 1999.
The annualized return on assets was 1.19% for the quarter versus 1.34% in
1998. The annualized return on equity was 12.99% compared to 15.42% in the
prior year quarter. Year to date net income, before expenses related to the
merger totaled $2,005,000 in 2000, an increase of 25% over the first quarter
of 1999.
Net interest income grew $219,000, or 4%,over first quarter 1999 results
primarily due to the growth of $24.0 million in average earning assets.
Non-interest income decreased $89,000, or 4%, due primarily to the decline of
$441,000 in gains from sale of mortgage loans, a result of reduced mortgage
lending activity, offset by increased trust, deposit fee and loan service fee
growth. Non-interest expense increased $265,000, or 5.3%, over 1999 results,
impacted by the $514,000 in merger related costs.
In measuring asset quality, annualized net charge-offs were .02% of average
loans in the first quarter of 2000, substantially below industry norms, and
non-performing assets were .70% of loans at March 31, 2000. With the
continued growth in the loan portfolio, in particular commercial loans, the
allowance for loan losses was increased $100,000 during the first quarter of
2000 and was 1.45% of loans and 206% of non-performing assets at March 31,
2000.
Strong economic growth in the region, coupled with the Corporation's efforts
to attract and retain customer relationships led to total assets of $503.4
million at March 31, 2000, a 5% increase from March 31, 1999. During the last
twelve months deposits grew $13.6 million to $424.1 million and total loans
increased 17% to total $378.5 million at the end of the quarter.
Total shareholders' equity increased 11% during the last twelve months
to $46.2 million, improving book value per share to $14.58 from the $13.93
at March 31, 1999.
Quantitative and Qualitative Disclosures about Market Risk.
There have been no material changes in the three months ended March 31, 2000.
<PAGE> 9
Other Matters
Year 2000
During 1999, the Corporation completed its comprehensive Year 2000 (Y2K) plan
in preparing for the Year 2000 date change. To date, the Corporation has
experienced no disruption in service of any type in the transition to 2000.
There was no material effect for the Corporation on financial performance in
preparing for the Year 2000 transition. Although considered unlikely,
unanticipated problems in the Corporation's core business process, including
problems associated with non-compliant third parties and disruptions to the
economy in general, could still occur despite efforts to date to remedy
affected systems and develop contingency plans. All business processes will
continue to be monitored, including interaction with the Corporation's
customers, vendors and other third parties, throughout 2000 to address any
issues and ensure all processes continue to function properly.
Forward-Looking Statements
Certain statements contained in this Form 10-Q constitute "forward looking
statements" as prescribed by regulation. These forward-looking statements are
identified by the use of such terms as "believes", "expects", "anticipates",
"provides", or other words having a similar meaning. Uncertainties and other
factors may cause actual results to differ materially from those expressed or
implied by such forward looking statements. Forward-looking statements in this
Form 10-Q are based on current expectations and/or the assumptions made in
the earnings simulation analyses, but numerous factors could cause variances
in these projections, and their underlying assumptions, such as changes in
interest rates, changes in customer preferences for deposit and loan products,
the degree of competition and changes in laws, regulations or policy.
<PAGE> 10
<TABLE>
<CAPTION>
Net Interest Income
Quarter Ending
March 31
(in thousands) 2000 1999
<S> <C> <C>
- --------------------------------------------------------------------------
Interest income $9,924 $9,255
Taxable equivalent adjustment 70 41
------ ------
Interest income (TE) 9,994 9,296
Interest expense 4,452 4,002
------ ------
Net interest income (TE) $5,542 $5,294
====== ======
Increase (decrease) due to change in:
Volume $ 556 $ 422
Rate (308) 103
------ ------
Total $ 248 $ 525
====== ======
- --------------------------------------------------------------------------
</TABLE>
First quarter net interest income on a taxable equivalent ("TE") basis was
$5.5 million, a 5% increase from the $5.3 million earned in the year ago
quarter. Average earning assets increased 5% or $24.0 million while net
interest margin, the other principal determinant of net interest income,
decreased from 4.76% to 4.69% in the quarter to quarter comparison.
Average loans outstanding increased $46.7 million or 14%, from the first
quarter of 1999, to $371.4 million for the current quarter. The commercial
portfolio grew on average 14% or $22.0 million to average $179.6 million and
average consumer loans increased 15% or $14.3 million to average $107.6
million. The mortgage loan portfolio increased $10.4 million, or 14% to
average $84.2 million in the first quarter of 2000. The average rate earned on
the loan portfolio declined 20 basis points (bp) in the first quarter 2000 in
comparison to first quarter 1999, primarily due to interest recoveries
recorded in the first quarter of 1999.
The securities portfolio declined on average $13.3 million, or 12% from the
first quarter of 1999. The average rate earned increased 17 bp to 6.19% in the
quarter to quarter comparison. The rate earned on overnight federal funds
sold increased 92 bp and the average outstandings declined $9.3 million, to
average $3.4 million.
Interest bearing deposits averaged $359.4 million for the first quarter of
2000, a $4 million increase over 1999. Federal Home Loan Bank advances
increased on average $11.4 million in the quarter to quarter comparison. The
average rate paid on interest bearing funds was 4.62%, compared to the 4.36%
average paid in the first quarter of 1999. Average net non-interest bearing
funds supporting earning assets increased 11% or $8.7 million compared to last
year's first quarter.
<PAGE> 11
Net Interest Income
Average Balances, Interest Income/Expense, Average Rates
<TABLE>
<CAPTION>
Quarter Ending March 31, 2000 1999
- ------------------------------------------------------------------------------------------
Average Average Average Average
(dollars in thousands, Balance Interest Rate** Balance Interest Rate**
taxable equivalent) -------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Loans, including fees* $371,449 $8,389 9.08% $324,792 $7,434 9.28%
Taxable securities 91,904 1,414 6.16% 106,558 1,599 6.00%
Tax-exempt securities* 8,693 143 6.56% 7,343 116 6.29%
-------- ------ -------- ------
Securities 100,597 1,557 6.19% 113,901 1,715 6.02%
Federal funds sold 3,405 48 5.55% 12,735 147 4.63%
-------- ------ -------- ------
Earning assets 475,451 9,994 8.45% 451,428 9,296 8.35%
Cash and due from banks 14,779 14,413
Other assets 10,975 13,087
-------- --------
Total assets $501,205 $478,928
======== ========
Liabilities and equity
CDs over $100,000 $ 12,956 177 5.41% $ 13,860 160 4.62%
Savings & interest checking 75,388 388 2.07% 72,748 362 2.02%
Money market deposits 125,548 1,395 4.47% 126,564 1,218 3.90%
Time deposits 145,529 2,053 5.67% 142,249 2,008 5.72%
-------- ------ -------- ------
Interest-bearing deposits 359,421 4,013 4.49% 355,421 3,748 4.28%
FHLB advances and other 28,421 439 6.12% 17,062 254 5.96%
-------- ------ -------- ------
Interest-bearing
liabilities 387,842 4,452 4.62% 372,483 4,002 4.36%
-------- ------ -------- ------
Demand deposits 59,991 55,222
Other liabilities 7,450 9,458
Shareholders' equity 45,922 41,765
-------- --------
Total liabilities
and equity $501,205 $478,928
======== ========
Net interest spread (TE) 3.83% 3.99%
==== ====
Net interest income (TE) $5,542 $5,294
====== ======
Net interest margin (TE) 4.69% 4.76%
==== ====
- -------------------------------------------------------------------------------------------
* Interest income on tax-exempt securities and certain tax-exempt loans have
been adjusted to a tax-equivalent basis.
** Average rates are annualized based on 91/366 days in 2000 and 90/365 days in 1999.
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
Non-Interest Income
Quarter Ending
March 31
Increase (decrease)
(in thousands) Amount Percent
<S> <C> <C>
- -------------------------------------------------------------------------
Trust $ 293 35 %
Net gains from sale of mortgage loans (441) (65)%
Deposit fees 93 24 %
Service charges (103) (25)%
Loan service fees, net 71 109 %
Other income (2) (7)%
----- ---
Change in non-interest income $ (89) (4)%
===== ===
</TABLE>
Non-interest income for the first quarter totaled $2.3 million, a $89,000
or 4% decrease from the first quarter of 1999. Trust income grew 35% in the
quarter to quarter comparison as funds under management have increased $59
million. Income from the sales of mortgage loans decreased 65% with a higher
interest rate environment and less refinancing activity slowing mortgage
origination volume in comparison to the first quarter of 1999. Deposit fees
have grown 24% from the year ago quarter. Service charges declined 25% from
last year as sales of investment products declined $84,000 or 38% from the
first quarter of 1999. Loan service fees, net of amortization, increased 109%
from the first quarter of 1999, which was impacted by accelerated
amortization of mortgage servicing rights due to increased refinancing
activity in 1999.
<TABLE>
<CAPTION>
Non-Interest Expense
Quarter Ending
March 31
Increase (decrease)
(in thousands) Amount Percent
<S> <C> <C>
- -------------------------------------------------------------------------
Salaries and employee benefits $(189) (6)%
Occupancy (19) (6)%
Premises and equipment 48 15 %
Outside processing and other services (62) (27)%
Legal and professional (56) (47)%
Business taxes 15 12 %
Merger & acquisition expense 514 --
Other expense 14 2 %
----- ---
Change in non-interest expense $ 265 5 %
===== ===
</TABLE>
<PAGE> 13
Non-interest expenses for the first quarter totaled $5.2 million, an
increase of $265,000, or 5%, from the first quarter of 1999. Nonrecurring
merger expense associated with the Empire Banc Corporation and Huntington
Bancshares affiliation was $514,000 in the first quarter of 2000. Personnel
related expenses declined $189,000 or 6%, principally influenced by reduced
activity based commissions.
Asset Quality
<TABLE>
<CAPTION>
Non-Performing Assets
(in thousands) 3/31/00 12/31/99 3/31/99
<S> <C> <C> <C>
- --------------------------------------------------------------------------
Non-accrual loans $1,887 $1,950 $ 847
Renegotiated loans 271 225 395
------ ------ ------
Total non-performing loans 2,159 2,175 1,242
Other real estate 510 307 260
------ ------ ------
Total non-performing assets $2,668 $2,482 $1,502
====== ====== ======
Non-performing assets as a percent
of total loans .70% .68% .46%
Accruing loans 90 days or
more past due $ -- $ 6 $ 9
- --------------------------------------------------------------------------
</TABLE>
Total non-performing assets at March 31, 2000 increased $1.2 million, or 78%
from March of 1999. Non-accrual loans increased $1.0 million, renegotiated
loans declined $124,000 and other real estate increased $250,000 from March of
1999. Non-performing assets are .70% of total loans at March 31, 2000 as
compared to .68% and.46% at December 31, 1999 and March 31, 1999. Loans
identified as potential problem loans totaled $2.2 million at March 31, 2000,
$1.2 million at December 31, 1998 and $3.1 million at March 31, 1999.
<PAGE> 14
The following table summarizes the provision for loan losses, net loan
losses and the allowance for loan losses.
<TABLE>
<CAPTION>
Three Months Twelve Months Three Months
Ended Ended Ended
(in thousands) 3/31/00 12/31/99 3/31/99
<S> <C> <C> <C>
- ---------------------------------------------------------------------------
Provision for loan losses $ 116 $ 701 $ 256
Net loan losses 16 126 31
Period-end allowance for
loan losses 5,500 5,400 5,050
Allowance as a percent of
period-end loans 1.45% 1.47% 1.56%
Net loan losses to average
loans outstanding .02% * .04% .04% *
* Annualized
- ---------------------------------------------------------------------------
</TABLE>
For the current quarter, net charge-offs were $16,000 compared to $31,000 in
1999. The allowance for loan losses increased $450,000 over the last twelve
months and was 1.45% of total loans as of March 31, 2000. Management believes
the increase in the allowance for loan losses is prudent with the continued
growth in the commercial loan portfolio. Average commercial loans for the
first quarter of 2000 were $180 million, a $22 million increase over the
average for the first quarter of 1999. The allowance for loan losses
increased $100,000 in the first quarter of 2000 as the commercial loan
portfolio grew on average $9 million over the fourth quarter of 1999. The
allowance for loan losses was 206% of non-performing assets at March 31, 2000,
compared to 218% and 336% at December 31, 1999 and March 31, 1999.
Under accounting guidance regarding impaired loans, at March 31, 2000
there were $2,244,000 in impaired loans with $971,000 for which an allowance
for loan losses is allocated. Impaired loans totaled $2,236,000 and
$1,062,000 at December 31, 1999 and March 31, 1999.
<PAGE> 15
Securities available for sale
Securities available for sale and their fair values at March 31, 2000 were as
follows:
<TABLE>
<CAPTION>
Available for sale
Amortized Unrealized Fair
(in thousands) Cost Gain Loss Value
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------
U.S. government and agency $39,294 $ 5 $ (500) $38,799
State and municipal 17,476 10 (386) 17,100
Mortgage-backed 20,866 33 (734) 20,165
Other 17,464 -- (258) 17,206
Equity 2,496 180 -- 2,676
------- ---- ------- -------
$97,596 $228 $(1,878) $95,946
======= ==== ======= =======
- ---------------------------------------------------------------------------
</TABLE>
There were no sales of securities during the three months ended March 31,
2000 or 1999.
<PAGE> 16
Shareholders' Equity and Capital Resources
Total equity at March 31, 2000 was $46.2 million, compared to $45.9 million
and $41.9 million at December 31, 1999 and March 31, 1999. The Corporation
declared $950,000, or $.30 per share, in dividends for the first quarter of
2000 as compared to $766,000, or $.25 per share in the first quarter of 1999.
This is a 20% increase over the first quarter dividend of 1999.
The changes in other comprehensive income (loss) for the three months ended
March 31, 2000 and 1999 were comprised of net unrealized losses on securities
available for sale, net of tax, of $272,000 and $404,000. Recorded in
shareholders' equity was accumulated other comprehensive loss of $1,089,000 at
March 31, 2000 and accumulated other comprehensive income of $560,000 at March
31, 1999.
<TABLE>
<CAPTION>
The following summarizes the consolidated Corporation's capital amounts and
ratios.
Regulatory
Capital Standards
Well Capitalized Actual
----------------- --------------------------------
(in thousands) 3/31/00 3/31/00 12/31/99 3/31/99
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------
Risk-based capital amounts
Tier 1 leverage $25,088 $ 46,999 $ 46,426 $ 41,073
Tier 1 risk-based 24,364 46,999 46,426 41,073
Total risk-based 40,607 52,080 51,563 45,554
Risk-weighted assets 406,066 410,724 357,910
Quarterly average assets 501,758 504,843 477,662
Risk-based ratios
Tier 1 leverage 5% 9.37% 9.20% 8.60%
Tier 1 risk-based 6% 11.57% 11.30% 11.48%
Total risk-based 10% 12.83% 12.55% 12.73%
- -----------------------------------------------------------------------------
</TABLE>
Risk-based capital ratios for the Corporation continue to be well above
the guidelines established for well-capitalized institutions, which is
the highest capital standard.
<PAGE> 17
Empire Banc Corporation
Part II - Other Information
Item 4. Submission of matters to a vote of security holders
(a) none
Item 6. Reports on Form 8-K filed in the first quarter of 2000:
Form 8-K, dated February 9, 2000, concerning a press release
stating Empire Banc Corporation and Huntington Bancshares
Incorporated (Huntington) entered into an Agreement and Plan
of Merger and a Supplemental Agreement (collectively the
"Merger Agreements") pursuant to which Empire will be merged
with and into Huntington (the "Merger"). As a result of the
Merger, each outstanding share of Empire's common stock, no
par value will be converted into 2.0355 shares of Huntington
common stock, without par value. The Merger is conditioned
upon, among other things, approval by a majority vote of the
shareholders of Empire, and receipt of certain regulatory
approvals.
Exhibits to Form 8-K, dated February 9, 2000.
2.1 Agreement and Plan of Merger dated February 4, 2000
between Empire Banc Corporation and Huntington Bancshares
Incorporated.
2.2 Supplemental Agreement dated February 4, 2000 between Empire
Banc Corporation and Huntington Bancshares Incorporated, with
Warrant Purchase Agreement and Warrant attached as exhibits
thereto
.
4 Amendment dated February 4, 2000 to Empire Banc Corporation
Rights Agreement.
99 Press Release dated February 7, 2000.
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.
Empire Banc Corporation
-----------------------
(Registrant)
<TABLE>
<S> <C>
Date: May 12, 2000
/s/ James E. Dutmers, Jr.
---------------------------------------
James E. Dutmers, Jr.
Chairman and Chief Executive Officer
Date: May 12, 2000
/s/ William T. Fitzgerald, Jr.
---------------------------------------
William T. Fitzgerald, Jr.
Secretary, Treasurer & Chief Financial
Officer
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 13,875
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,400
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 95,946
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<INVESTMENTS-MARKET> 0
<LOANS> 378,531
<ALLOWANCE> 5,500
<TOTAL-ASSETS> 503,418
<DEPOSITS> 424,121
<SHORT-TERM> 4,000
<LIABILITIES-OTHER> 8,120
<LONG-TERM> 21,000
0
0
<COMMON> 33,474
<OTHER-SE> 12,703
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<INCOME-PRETAX> 2,412
<INCOME-PRE-EXTRAORDINARY> 1,491
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,491
<EPS-BASIC> .47
<EPS-DILUTED> .47
<YIELD-ACTUAL> 4.69
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<ALLOWANCE-DOMESTIC> 3,029
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</TABLE>
