FORM 10 - QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1996
-------------------------
Commission File Number 0-16587
-----------
South Branch Valley Bancorp, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
West Virginia 55-0672148
-------------------------------------------------------
(State or other jurisdiction (IRS Employer
incorporation or organization) Identification No.)
310 North Main Street
Moorefield, West Virginia 26836
-------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(304) 538-2353
-------------------------------------------------------
(Registrant's telephone number, including area code)
Check whether the issuer: (1) has filed all reports required by Section 13 or
15(d) of the Exchange Act of 1934 during the past 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
---- ---
State the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
378,510 common shares were outstanding as of November 12, 1996.
Transitional Small Business Disclosure Format (check one): Yes No X
----- -----
1
<PAGE>
SOUTH BRANCH VALLEY BANCORP, INC. AND SUBSIDIARY
INDEX
Page
I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated balance sheets
September 30, 1996 (unaudited) and
December 31, 1995 3
Consolidated statements of
income for the three months and nine
months ended September 30, 1996, and
1995 (unaudited) 4
Consolidated statements of
cash flows for the nine months ended
September 30, 1996 and 1995 (unaudit 5-6
Consolidated statements of
shareholders' equity for the three
months and nine months ended September 30,
1996 and 1995 (unaudited) 7
Notes to consolidated financial
statements (unaudited) 8
Item 2. Management's Discussion and
Analysis of Financial Condition and Results
of Operations 9-15
II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 16
Signatures 17
2
<PAGE>
<TABLE>
SOUTH BRANCH VALLEY BANCORP, INC., AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
1996 1995
ASSETS (Unaudited) *
----------- -----------
<S> <C> <C>
Cash and due from banks $2,790,957 $2,191,647
Interest bearing deposits with other banks 1,653,000 2,134,919
Federal funds sold 805,825 2,161,745
Securities available for sale 30,806,727 31,480,580
Loans, net 79,582,795 70,598,398
Bank premises and equipment, net 3,118,623 3,180,351
Accrued interest receivable 933,488 983,841
Other assets 295,548 386,377
----------- -----------
Total Assets $119,986,963 $113,117,858
=========== ===========
LIABILITIES
Non-interest bearing deposits $8,938,172 $7,832,774
Interest bearing deposits 94,486,675 92,213,562
----------- -----------
Total deposits 103,424,847 100,046,336
Securities sold w/agreement to repurchase 1,862,466 --
Long-term borrowings 1,706,595 750,000
Other liabilities 937,704 992,862
----------- -----------
Total Liabilities 107,931,612 101,789,198
----------- -----------
SHAREHOLDERS' EQUITY
Common stock, $2.50 par value, authorized
600,000 shares, issued 382,625 shares 956,562 956,562
Surplus 685,534 685,534
Net unrealized gain (loss) on securities 182,978 340,650
Retained earnings 10,397,247 9,512,884
Less cost of shares acquired for the
treasury 1996, 4,115; and 1995, 4,115 (166,970) (166,970)
----------- -----------
Total Shareholders' Equity 12,055,351 11,328,660
----------- -----------
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $119,986,963 $113,117,858
=========== ===========
December 31, 1995 financial information has been extracted from audited
financial statements.
See Notes to Condensed Consolidated Financial Statements
3
</TABLE>
<PAGE>
<TABLE>
SOUTH BRANCH VALLEY BANCORP, INC., AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months and Nine Months ended September 30, 1996 and 1995
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
<S> <C> <C> <C> <C>
1996 1995 1996 1995
------------- ---------- ----------- -----------
Interest income:
Interest and fees on loans $1,912,956 $1,688,555 $5,546,873 $4,841,827
Interest on securities:
Taxable 466,236 457,647 1,419,388 1,316,430
Tax-exempt 70,454 40,948 179,672 118,539
Interest on federal funds sold 5,293 8,368 41,084 40,308
------------- ---------- ----------- -----------
Total interest income 2,454,939 2,195,518 7,187,017 6,317,104
------------- ---------- ----------- -----------
Interest expense:
Interest on deposits 1,158,061 1,044,353 3,458,129 2,910,256
Interest on federal funds purchased
and securities sold under
repo agmt 23,470 1,737 25,066 2,875
Interest on other borrowings 32,810 7,115 79,695 34,479
------------- ---------- ----------- -----------
Total interest expense 1,214,341 1,053,205 3,562,890 2,947,610
------------- ---------- ----------- -----------
Net interest income 1,240,598 1,142,313 3,624,127 3,369,494
Provision for loan losses 15,000 5,000 40,000 55,000
Net interest income after
provision for loan losses 1,225,598 1,137,313 3,584,127 3,314,494
------------- ---------- ---------- -----------
Non-interest income:
Insurance commissions 30,741 31,543 79,465 78,808
Trust department income 501 --- 493 508
Service fee income 58,490 53,430 167,635 156,648
Securities gains (losses) (3,912) (17,292) 30,000 (19,147)
Other income 17,326 11,083 43,394 34,854
------------- ---------- ----------- -----------
Total other income 103,146 78,764 320,987 251,671
------------- ---------- ----------- -----------
Non-interest expense:
Salaries and employee benefits 428,579 382,356 1,294,552 1,164,266
Net occupancy expense of premises 46,458 30,077 147,045 87,750
Equipment expense 47,198 39,359 147,240 120,681
FDIC insurance premiums 500 (5,692) 2,000 91,269
Other expenses 243,340 211,177 775,449 654,721
------------- ---------- ----------- -----------
Total other expense 766,075 657,277 2,366,286 2,118,687
------------- ---------- ----------- -----------
Income before income tax expense 562,669 558,800 1,538,828 1,447,478
Income tax expense 181,825 186,203 510,630 508,417
------------- ---------- ----------- -----------
Net Income $380,844 $372,597 $1,028,198 $939,061
============= ========== =========== ===========
Earnings per common share (Note 2) $1.01 $0.98 $2.72 $2.48
============= ========== =========== ===========
Dividends per common share $--- $--- $0.38 $0.33
============= ========== =========== ===========
See Notes to Condensed Consolidated Financial Statements
4
</TABLE>
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended
September 30, 1996 and 1995 (Unaudited)
<TABLE>
Nine Months Ended
September 30, September 30,
<S> <C> <C>
1996 1995
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $1,028,198 $939,061
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation 167,528 111,275
Provision for loan losses 40,000 55,000
Securities (gains) losses (30,000) 19,147
Provision for deferred income tax expense 3,682 21,648
(Increase) decrease in accrued income receivable 50,353 (116,084)
Amortization of security premiums and
(accretion of discounts), net 42,472 73,115
(Increase) decrease in other assets 74,465 (89,031)
Increase in other liabilities 43,547 104,092
(Gain) on sale of other assets (6,318) --
----------- ----------
Net cash provided by operating activities 1,413,927 1,118,223
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of securities
held to maturity -- 100,000
Purchases of securities held to maturity -- (615,567)
Proceeds from sales of securities
available for sale 6,235,258 2,030,688
Proceeds from maturities of securities
available for sale 3,425,000 2,075,000
Purchases of securities available for sale (9,708,744) (5,724,686)
Principal payments received on securities held
to maturity -- 254,883
Principal payments received on securities
available for sale 453,490 99,518
(Increase) decrease in Federal funds sold, net 1,355,920 (184,047)
Principal collected on (loans to customers), net (9,024,397) (4,025,598)
(Purchase of) proceeds from interest bearing
deposits with other banks 481,919 (491,163)
Purchase of Bank premises and equipment (105,800) (958,147)
Proceeds sales of other assets 19,000 --
----------- ----------
Net cash provided by (used in) investing
activities (6,868,354) (7,439,119)
----------- ----------
Continued
See Notes to Condensed Consolidated Financial Statements
</TABLE>
5
<PAGE>
SOUTH BRANCH VALLEY BANCORP, INC., AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
For the Nine Months Ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
Nine Months Ended
September 30, September 30,
<S> <C> <C>
1996 1995
--------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand deposits, NOW and
savings accounts 1,214,514 3,123,228
Proceeds from sales of time deposits, net 2,163,998 3,990,680
Increase in securities sold with agreement to
repurchase 1,862,465 --
Net increase (decrease) in other borrowings 956,595 (700,000)
Dividends Paid (143,835) (124,908)
--------------- ------------
Net cash provided by (used in) financing
activities 6,053,737 6,289,000
--------------- ------------
Increase (decrease) in cash and due from banks 599,310 (31,896)
Cash and due from banks:
Beginning 2,191,647 2,152,919
--------------- ------------
Ending $2,790,957 $2,121,023
=============== ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest paid to depositors $3,412,237 $2,824,075
=============== ============
Income taxes $435,313 $559,222
=============== ============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES
Other real estate acquired in settlement
of loans $0 $8,400
=============== ============
See Notes to Condensed Consolidated Financial Statements
</TABLE>
6
<PAGE>
<TABLE>
SOUTH BRANCH VALLEY BANCORP, INC., AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Nine Months ended September 30, 1996 and 1995
(Unaudited)
Three Months Ended
-----------------------------------
September 30, September 30,
<S> <C> <C>
1996 1995
---------------- -------------
Balance, beginning of period $11,300,153 $10,512,831
Net income 380,844 372,597
Change in net unrealized gain (loss)
on securities available for sale 374,354 (19,742)
---------------- -------------
Balance, September 30 $12,055,351 $10,865,686
================ =============
Nine Months Ended
-----------------------------------
September 30, September 30,
1996 1995
---------------- -------------
Balance, beginning of period $11,328,660 $9,378,140
Net income 1,028,198 939,061
Cash dividends declared (143,834) (124,908)
Change in net unrealized gain (loss)
on securities available for sale (157,673) 673,393
---------------- -------------
Balance, September 30 $12,055,351 $10,865,686
================ =============
See Notes to Condensed Consolidated Financial Statements
</TABLE>
7
<PAGE>
SOUTH BRANCH VALLEY BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
The financial information included herein is unaudited; however,
such information reflects all adjustments (consisting solely of
normal recurring adjustments) which are, in the opinion of
management, necessary for a fair statement of results for the
interim periods.
The presentation of financial statements in conformity with
generally accepted accounting procedures requires management to make
estimates and assumptions that effect the reported amount of assets
and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from the estimates.
The results of operations for the nine month period ended September
30, 1996 are not necessarily indicative of the results to be
expected for the full year. The Condensed Consolidated Financial
Statements and notes included herein should be read in conjunction
with the Company's 1995 audited financial statements and Form 10-K.
Note 2. Earnings Per Share
Earnings per common share are computed based upon the weighted
average shares outstanding. The weighted average shares outstanding
were 378,510 at September 30, 1996 and 1995.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION AND SUMMARY
The following is Management's discussion and analysis of the financial
condition and financial results of operations for South Branch Valley Bancorp,
Inc. and its wholly owned subsidiary, South Branch Valley National Bank, as of
September 30, 1996. Since the primary business activities of South Branch Valley
Bancorp, Inc. are conducted through the Bank, this discussion focuses primarily
on the financial condition and operations of the Bank.
Net income for the third quarter of 1996 was $381,000, a 2.1% increase
from the third quarter earnings of 1995 which totaled $373,000. This translated
to $1.01 earned per share during the third quarter of 1996 compared to $.98
during the third quarter of 1995.
Net income for the nine months ended September 30, 1996 totaled
$1,028,000, which is an $89,000 or 9.5% increase from the $939,000 earned in the
first nine months of 1995. Annualized return on average assets for 1996 was
1.19% as compared to 1.25% at September 30, 1995. Earnings per share increased
from $2.48 for the first nine months of 1995 to $2.72 for the first nine months
of 1996.
RESULTS OF OPERATIONS
Net Interest Income
- -------------------
For purposes of this discussion, the "taxable equivalent basis" adjustment
has been included in interest income to reflect the level of income had income
on state and municipal obligations exempt from Federal income tax been taxable,
assuming a Federal tax rate of 34% in both 1996 and 1995. The amounts of tax
equivalent adjustments were $39,000 in 1996 and $28,000 in 1995.
For the nine months ended September 30, 1996, the Company's net interest
income, as adjusted, increased $266,000 or 7.8% to $3,663,000 as compared with
$3,397,000 for the nine months ended September 30, 1995. The Company's net
interest yield on earning assets decreased 25 basis points from 4.70% at
September 30, 1995 to 4.45% for the nine months ended September 30, 1996.
Management feels that this decrease is due primarily to a competitive local
market for loans and deposits which has caused a general lowering of rates on
loans while deposit rates have remained steady. A detailed analysis of the net
interest yield is shown on Table I.
9
<PAGE>
<TABLE>
South Branch Valley Bancorp, Inc. and Subsidiary
- ---------------------------------------------------------------------------------------------
Table I - Average Distribution of Assets, Liabilities and Shareholders'
Equity, Interest Earnings & Expenses, and Average Rates
September 30, 1996 September 30, 1995
------------------------------ -----------------------------
(In thousands of dollars)Average Earnings/ Yield/ Average Earnings/ Yield/
Balances Expense Rate Balances Expense Rate
-------- ---------- ---------- -----------------------------
ASSETS
Interest earning assets:
Loans, net of unearned
<S> <C> <C> <C> <C> <C> <C>
interest $74,964 $5,547 9.87% $64,993 $4,842 9.93%
Securities
Taxable 27,293 1,320 6.45% 25,745 1,216 6.30%
Tax-exempt 4,494 219 6.50% 2,756 147 7.11%
Interest bearing
deposits
with other banks 1,967 99 6.71% 1,943 100 6.86%
Federal funds sold 993 41 5.51% 842 40 6.33%
-------- -------- ------ --------- --------- ------
Total interest earning
assets 109,711 7,226 8.78% 96,279 6,345 8.79%
Noninterest earning
assets 5,974 3,928
-------- ---------
Total assets $115,685 $100,207
======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities:
Interest bearing
demand deposits $19,625 $505 3.43% $17,267 $465 3.59%
Regular savings 15,507 410 3.53% 13,123 330 3.35%
Time savings 57,480 2,543 5.90% 50,531 2,116 5.58%
Federal funds purchased
and Sec sold w/agmt to
repurchase 791 25 4.21% 60 3 6.67%
Other borrowings 1,790 80 5.96% 855 34 5.30%
-------- -------- ------ --------- --------- ------
95,193 3,563 4.99% 81,836 2,948 4.80%
Noninterest bearing liabilities:
Demand deposits 8,257 7,649
Other liabilities 889 660
-------- ---------
Total liabilities 104,339 90,145
Shareholders' equity 11,346 10,062
-------- ---------
Total liabilities and
shareholders' equity $115,685 $100,207
======== ==========
NET INTEREST EARNINGS $3,663 $3,397
======== =========
NET INTEREST YIELD ON EARNING ASSETS 4.45% 4.70%
====== =====
</TABLE>
10
<PAGE>
Provision for Loan Losses and Loan Quality
- -----------------------------------------
An allowance for loan losses is maintained by the Company and is funded
through the provision for loan losses as a charge to current earnings. The
allowance for loan losses is reviewed by management on a quarterly basis to
determine that it is maintained at levels considered necessary to cover
potential losses associated with the Bank's current loan portfolio. The
Company's provision for loan losses for the first nine months of this year
totaled $40,000 compared to $55,000 for the nine months ended September 30,
1995. At September 30, 1996 the reserve for loan losses totaled $849,000 or 1.1%
of net loans compared to $860,000 or 1.2% of net loans at December 31, 1995.
Net loan charge-offs for the first nine months of 1996 were $50,000 as
compared to $188,000 for the first nine months of 1995. Expressed as a
percentage of average loans (net of unearned interest), net charge-offs were
.07% for the first nine months of 1996 compared to .28% for the comparable
period of 1995.
Summary of Past Due Loans and Non-Performing Assets
September 30 December 31
---------------- ------------
1996 1995 1995
----- ---- ----
Loans contractually past due
90 days or more and still
accruing interest $238 $280 $260
==== ==== ====
Non-performing assets:
Non-accruing Loans $384 $625 $538
Other Real Estate Owned 30 40 40
---- ---- ----
$414 $665 $578
==== ==== ====
The level of non-performing assets has decreased during the past year due
to management's continuing efforts to improve the quality of the Company's
assets. Total loans past due 90 days or more plus non-performing assets have
decreased approximately 31.0% from the same period last year. Loans
contractually past due 90 days or more and still accruing interest have
decreased approximately 8.5% or $22,000 since December 31, 1995.
11
<PAGE>
Non-interest Income
- -------------------
Total other income increased approximately $69,000 or 27.4% during the
first nine months of 1996, as compared to the first nine months of 1995.
Service fee income increased approximately $11,000 or 7.0%. Management is
presently studying ways of improving the Company's service fee income and
believes the Company will be able to maintain levels of service fee income
similar to third quarter level throughout the remainder of 1996. Management
plans to initiate a new service fee structure for commercial accounts during the
first quarter of 1997.
Securities gains (losses) increased from a loss of ($19,000) for the first
nine months of 1995 to a gain of $30,000 for the first nine months of 1996. This
$49,000 increase in securities gains represents a 257.9% improvement for the
nine months ending September 30, 1996 as compared to the nine months ending
September 30, 1995 due to sales to improve rates and GAP.
Other income increased approximately $8,000 or 22.9% from September 30,
1995 to September 30, 1996. This increase is primarily attributable to an
increase in merchant fees on credit cards and profits realized on sales of other
real estate owned.
Non-interest Expense
- --------------------
Total non-interest expense increased approximately $248,000 or 11.7%
during the first nine months of 1996 as compared to the first nine months of
1995. A more detailed discussion of non-interest expense components follows:
An increase of approximately $131,000 or 11.3% in salaries and employee
benefits can be attributed to a general increase in salaries and a slight
increase in insurance costs. Also contributing to this increase was the purchase
of the Petersburg branch in November 1995. This new branch increased our number
of full time equivalent employees by 9.6% from 52 employees before the purchase
to 57 employees after the purchase.
Net occupancy expense increased approximately $59,000 to $147,000 or 67.0%
from September 30, 1995 to September 30, 1996. Equipment expense also increased
21.5% from approximately $121,000 for the period ending September 30,1995 to
$147,000 for the period ending September 30, 1996. These increases were expected
and planned for by management due to the purchase of the Petersburg branch
during the fourth quarter of 1995 and the recently completed renovation and
addition to the Company's home office in Moorefield.
12
<PAGE>
Due to the decrease in the semi-annual rate of deposit insurance from
$.115 per hundred dollars of deposits to a minimum assessment of $1,000, FDIC
insurance premiums decreased approximately $89,000 for the first nine months of
1996 as compared to the first nine months of 1995.
Other expenses increased approximately $120,000 or 18.3% from $655,000 to
$775,000 during the first nine months of 1996 compared to the first nine months
of 1995. The major factors contributing to this increase are as follows:
** During the first nine months of 1996 the bank did a computer
conversion and experienced some one time expenses. Data processing
expense increased 63.6% from approximately $55,000 in 1995 to
$90,000 in 1996. ATM expense increased from $14,000 to $25,000 or
78.6%. Management does not expect these large increases in expenses
to continue.
** Associated with the acquisition of the new branch in Petersburg as
of November 1995 was the creation of a new expense, amortized
goodwill. This expense has totaled $28,000 thus far in 1996 and will
continue at this rate through the end of 2000.
** Credit card expense increased 29.6% from $27,000 in 1995 to $35,000
in 1996. This increase is the result of a decrease in the number of
banks being serviced by the Company's processor and thus increasing
the share of each bank's cost.
** The bank's strong loan demand required more credit reports which
increased credit reference fees from $14,000 in 1995 to $19,000 in
1996, an increase of 35.7%.
** On September 7, 1996 the bank's main office located in Moorefield
experienced a flood with water approximately eleven inches deep
in the entire building. Flood clean up expenses through the end
of September totaled approximately $6,000. This does not include
any building or furniture damage, which is in the process of
being determined by the insurance company. At this time
management is uncertain as to the total damages caused by the
flood, but the Bank's insurance deductible appears to be the
Bank's only significant exposure to loss. The Bank's flood
insurance deductible is $10,000.
13
<PAGE>
Liquidity
- ---------
Liquidity in commercial banking can be defined as the ability to satisfy
customer loan demand and meet deposit withdrawals while maximizing net interest
income. The Company's primary sources of funds are deposits and principal and
interest payments on loans. Additional funds are provided by maturities of
securities. The Company uses ratio analysis to monitor the changes in its
sources and uses of funds so that an adequate liquidity position is maintained.
At September 30, 1996 the loan to deposit ratio was 76.9% as compared to 73.0%
at September 30, 1995. Cash and due from banks totaled $2,791,000 or 2.3% of
total assets. Additionally, securities and interest bearing deposits with other
banks maturing within one year approximated $3,878,000 or 3.2% of total assets.
Management believes that the liquidity of the Company is adequate and foresees
no demands or conditions that would adversely affect it.
FINANCIAL CONDITION
The Company's total assets have increased approximately 6.1% or $6.9
million from December 31, 1995. The overall composition of the Company's assets
has not changed significantly since December of 1995.
Total loans have increased approximately $9.0 million or 12.7% since
December 31, 1995. This has increased the loan to deposit ratio to 77.0% as
compared to 71.0% as of December 1995. This increase in the loan to deposit
ratio was planned for and expected by management.
Total deposits have increased approximately $3.4 million or 3.4% since
December 31, 1995. Approximately $1.1 million of this increase was in
noninterest bearing deposits and approximately $2.3 million was in interest
bearing accounts. This growth is consistent with the Company's overall business
plan.
In the Bank's never ending quest to provide better service to all of it's
customer base, the Bank began a new service on June 30, 1996. This service is
called securities sold under agreement to repurchase. Federal law prohibits the
payment of interest on corporate demand accounts. In order to be more
competitive and to better serve it's corporate customers, the Bank was pleased
to be able to offer this new service to corporate customers who typically
maintain deposits in excess of $250,000. The Bank has set aside a group of U. S.
Agency securities for these repurchase agreements. These repurchase agreements
totaled $1.9 million on September 30, 1996 with a yield of 4.13%. These Repos
are reflected on the Condensed Consolidated Balance Sheet as borrowings.
14
<PAGE>
The Bank increased it's long term borrowings from the Federal Home Loan
Bank by approximately $957,000. This increase was used to fund some of the
Bank's loan growth.
The Company's total shareholders' equity has increased approximately
$726,000 or 6.4% since December 31, 1995. This increase is due to internally
generated undistributed net income. The Company's equity to total assets ratio
was 10.0% at September 30, 1996 and at December 31, 1995. The Company's
subsidiary bank's risk weighted capital ratio was approximately 16.1% at
September 30, 1996, and is well within Federal regulatory guidelines. The
Company is not aware of any pending Federal regulation which would have a
material negative impact on its operations at this point in time.
15
<PAGE>
PART II
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
No reports on Form 8-K were filed by the Company during the quarter ended
September 30, 1996.
16
<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.
South Branch Valley Bancorp, Inc.
(registrant)
By: /s/ H. Charles Maddy, III
-----------------------------
H. Charles Maddy, III, President
and Chief Financial Officer
By: /s/ Russell F. Ratliff, Jr.
------------------------------
Russell F. Ratliff, Jr.
Treasurer
Date: November 13, 1996
-----------------------
17
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000811808
<NAME> SOUTH BRANCH VALLEY NATIONAL BANK
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 2,790,957
<INT-BEARING-DEPOSITS> 1,653,000
<FED-FUNDS-SOLD> 805,825
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 30,806,727
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 80,432,264
<ALLOWANCE> (849,469)
<TOTAL-ASSETS> 119,986,963
<DEPOSITS> 103,424,847
<SHORT-TERM> 0
<LIABILITIES-OTHER> 937,704
<LONG-TERM> 1,706,595
0
0
<COMMON> 956,562
<OTHER-SE> 11,098,789
<TOTAL-LIABILITIES-AND-EQUITY> 119,986,963
<INTEREST-LOAN> 5,546,873
<INTEREST-INVEST> 1,599,060
<INTEREST-OTHER> 41,084
<INTEREST-TOTAL> 7,187,017
<INTEREST-DEPOSIT> 3,458,129
<INTEREST-EXPENSE> 3,562,890
<INTEREST-INCOME-NET> 3,624,127
<LOAN-LOSSES> 40,000
<SECURITIES-GAINS> 30,000
<EXPENSE-OTHER> 2,366,286
<INCOME-PRETAX> 1,538,828
<INCOME-PRE-EXTRAORDINARY> 1,028,198
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,028,198
<EPS-PRIMARY> 2.72
<EPS-DILUTED> 2.72
<YIELD-ACTUAL> 4.50
<LOANS-NON> 383,776
<LOANS-PAST> 238,211
<LOANS-TROUBLED> 54,901
<LOANS-PROBLEM> 2,720,089
<ALLOWANCE-OPEN> 859,681
<CHARGE-OFFS> 72,036
<RECOVERIES> 21,824
<ALLOWANCE-CLOSE> 849,469
<ALLOWANCE-DOMESTIC> 849,469
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
