SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - Q
X Quarterly report pursuant to Section 13 or 15 (d) of the Securities
_____Exchange Act of 1934
For the quarter ended March 31, 1996
______________
or
_____Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the transition period from ___________________to______________________
Commission File Number 0 - 16123
_______________
Bethel Bancorp
____________________________
(Exact name of registrant as specified in its charter)
Maine 01 - 0425066
__________________________________ __________________________________
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
489 Congress Street, Portland, Maine 04101
_______________________________________ ___________
(Address of principal executive offices) (Zip Code)
(207) 772 - 8587
____________________________________________________
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
______________ ___________
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15 (d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.
Not Applicable
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Shares outstanding as of April, 30, 1996: 1,212,010 of common stock,
$1.00 par value per share.
- ------------------------------------------------------------------------------
BETHEL BANCORP AND SUBSIDIARIES
Table of Contents
Part I. Financial Information
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets
March 31, 1996 and June 30, 1995
Consolidated Statements of Income
Three Months ended March 31, 1996 and 1995
Consolidated Statements of Income
Nine Months ended March 31, 1996 and 1995
Consolidated Statements of Changes in Shareholders' Equity
Nine Months ended March 31, 1996 and 1995
Consolidated Statements of Cash Flows
Nine Months ended March 31, 1996 and 1995
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operation
Part II. Other Information
Items 1 - 6.
Signature Page
Index to Exhibits
<TABLE>
<CAPTION>
BETHEL BANCORP AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, June 30,
1996 1995
_______________ _______________
<S> <C> <C>
Assets
Cash and due from banks $ 4,166,451 $ 3,855,648
Interest bearing deposits in other banks 424,968 367,423
Federal Home Loan Bank overnight deposits 5,936,292 10,517,000
Trading account securities at market 1,142,285 1,375
Available for sale securities 26,899,364 10,148,251
Federal Home Loan Bank stock 2,300,000 2,150,000
Loans held for sale 578,571 528,839
Due from broker 1,005,403 941,407
Loans 168,041,063 170,442,082
Less deferred loan origination fees 318,231 302,178
Less allowance for loan losses 2,497,000 2,396,000
_______________ _______________
Net loans 165,225,832 167,743,904
Bank premises and equipment, net 3,682,436 3,873,278
Real estate held for investment 478,607 452,479
Other real estate owned 668,638 1,068,454
Goodwill (net of accumulated amortization
of $854,150 at 3/31/96 and
$631,146 at 6/30/95) 2,643,822 2,866,826
Other assets 3,034,905 2,994,253
_______________ _______________
Total Assets 218,187,574 207,509,137
=============== ===============
Liabilities and Shareholders' Equity
Liabilities
Deposits $ 146,618,164 $ 147,119,870
Repurchase Agreements 3,782,271 2,585,387
Advances from Federal Home Loan Bank 43,100,000 35,700,000
Notes payable 1,626,813 2,010,091
Due to broker 3,070,348 989,062
Other Liabilities 1,480,704 1,829,449
_______________ _______________
Total Liabilities 199,678,300 190,233,859
Shareholders' Equity
Preferred stock, Series A,
45,454 shares issued and outstanding 999,988 999,988
Preferred stock, Series B,
71,428 shares issued and outstanding 999,992 999,992
Common stock, par value $ 1, issued
and outstanding, 1,203,486 shares at
12/31/95 and 547,502 at 6/30/95 1,203,764 547,502
Additional paid in capital 5,332,838 4,643,059
Retained earnings 10,456,450 10,180,244
_______________ _______________
18,993,032 17,370,785
Net unrealized loss on available
for sale securities (483,758) (95,507)
_______________ _______________
Total Shareholders' Equity 18,509,274 17,275,278
Total Liabilities and Shareholders'
Equity $ 218,187,574 $ 207,509,137
=============== ================
BETHEL BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
Three Months Ended
March 31,
1996 1995
_______________ ________________
Interest and Dividend Income
Interest on FHLB overnight deposits $ 129,919 $ 88,336
Interest on loans & loans held for sale 4,053,993 3,811,479
Interest on investment securities &
available for sale securities 351,339 393,563
Dividends on Federal Home Loan Bank stock 35,868 45,271
Other Interest Income 5,220 5,321
________________ _______________
Total Interest Income 4,576,339 4,343,970
Interest Expense
Deposits 1,611,581 1,410,184
Repurchase agreements 42,872 25,721
Other borrowings 654,874 628,565
_______________ _______________
Total Interest Expense 2,309,327 2,064,470
_______________ _______________
Net Interest Income 2,267,012 2,279,500
Provision for loan losses 159,960 145,776
_______________ _______________
Net Interest Income after
Provision for Loan Losses 2,107,052 2,133,724
Other Income
Service charges 250,005 248,119
Available for sale securities gains (losses) 19,187 (1,848)
Gain (Loss) on trading account 16,093 151,910
Other 170,181 145,717
_______________ _______________
Total Other Income 455,466 543,898
Other Expenses
Salaries and employee benefits 1,095,931 1,003,890
Net occupancy expense 171,886 149,483
Equipment expense 180,026 190,717
Goodwill amortization 74,335 72,294
Other 557,960 614,482
_______________ _______________
Total Other Expenses 2,080,138 2,030,866
_______________ _______________
Income Before Income Taxes 482,380 646,756
Income tax expense 180,575 238,683
_______________ _______________
Net Income $ 301,805 $ 408,073
=============== ===============
Earnings Per Share
Primary $ 0.20 $ 0.31
Fully Diluted $ 0.19 $ 0.28
BETHEL BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
Nine Months Ended
March 31,
1996 1995
_______________ _______________
Interest and Dividend Income
Interest on FHLB overnight deposits $ 485,995 $ 295,448
Interest on loans & loans held for sale 12,230,893 11,084,775
Interest on investment securities &
available for sale securities 734,496 859,340
Dividends on Federal Home Loan Bank stock 109,605 148,188
Other Interest Income 22,697 17,980
_______________ _______________
Total Interest Income 13,583,686 12,405,731
Interest Expense
Deposits 4,899,241 3,864,227
Repurchase agreements 125,665 47,163
Other borrowings 1,847,784 1,861,647
_______________ _______________
Total Interest Expense 6,872,690 5,773,037
_______________ _______________
Net Interest Income 6,710,996 6,632,694
Provision for loan losses 455,524 494,590
_______________ _______________
Net Interest Income after
Provision for Loan Losses 6,255,472 6,138,104
Other Income
Service charges 766,824 698,405
Available for sale securities gains (losses) 225,570 6,280
Gain (Loss) on trading account 23,098 375,732
Other 604,746 531,412
Total Other Income _______________ _______________
1,620,238 1,611,829
Other Expenses
Salaries and employee benefits 3,091,775 2,873,541
Net occupancy expense 420,155 382,659
Equipment expense 524,128 508,121
Goodwill amortization 223,004 162,124
Other 1,772,671 1,896,899
_______________ _______________
Total Other Expenses 6,031,733 5,823,344
_______________ _______________
Income Before Income Taxes 1,843,977 1,926,589
Income tax expense 677,099 705,691
_______________ _______________
Net Income $ 1,166,878 $ 1,220,898
=============== ===============
Earnings Per Share
Primary $ 0.83 $ 0.91
Fully Diluted $ 0.76 $ 0.84
</TABLE>
<TABLE>
<CAPTION>
BETHEL BANCORP AND SUBSIDIARIES
Consolidated Statements of Changes in Shareholders' Equity
Nine Months Ended March 31, 1996 and 1995
Net
Unrealized
Gains(Losses)
Additional on Available
Common Preferred Paid - In Retained for Sale
Stock Stock Capital Earnings Securities Total
_______________ _______________ _______________ _______________ _______________ _______________
<S> <C> <C> <C> <C> <C> <C>
Balance at June 30, 1994 $ 547,400 $ 1,999,980 $ 4,640,968 $ 9,006,038 $ (438,023) $ 15,756,363
Net income for Nine months
ended March 31,1995 -- -- -- 1,220,898 -- 1,220,898
Dividends paid on common
stock -- -- -- (131,376) -- (131,376)
Dividends paid on preferred
stock -- -- -- (104,999) -- (104,999)
Net change in unrealized
losses on securities
available for sale -- -- -- -- 4,427 4,427
_______________ _______________ _______________ _______________ ______________ _______________
Balance March 31, 1996 $ 547,400 $ 1,999,980 $ 4,640,968 $ 9,990,561 $ (433,596) $ 16,745,313
=============== =============== =============== =============== =============== ===============
Balance at June 30, 1995 $ 547,502 $ 1,999,980 $ 4,643,059 $ 10,180,244 $ (95,507) $ 17,275,278
Net income for Nine months
ended March 31, 1996 -- -- -- 1,166,878 -- 1,166,878
Dividends paid on common
stock -- -- -- (187,930) -- (187,930)
Dividends paid on preferred
stock -- -- -- (104,999) -- (104,999)
Issuance of common stock 519 -- 7,779 -- -- 8,298
Common stock warrants
exercised 50,000 -- 650,000 -- -- 700,000
Stock split effected in the form
of a dividend 597,743 -- -- (597,743) -- 0
Stock options exercised 8,000 -- 32,000 -- -- 40,000
Net change in unrealized
losses on securities
available for sale -- -- -- -- (388,251) (388,251)
_______________ _______________ _______________ _______________ _______________ _______________
Balance March 31, 1996 $ 1,203,764 $ 1,999,980 $ 5,332,838 $ 10,456,450 $ (483,758) $ 18,509,274
=============== =============== =============== =============== =============== ===============
BETHEL BANCORP AND SUBSIDIARIES
Consolidated Statements of Cash Flow
Nine Months Ended
March 31,
1996 1995
_______________ _______________
<S> <C> <C>
Cash provided by operating activities
$ 3,567,289 $ 2,205,597
Cash flows from investing activities:
FHLB stock purchased (150,000) (205,000)
Held to maturity securities purchased -- (12,421,919)
Held to maturity securities matured -- 1,481,795
Available for sale securities purchased (35,381,445) (265,841)
Available for sale securities principal
reductions 524,396 66,882
Available for sale securities sold 16,746,027 149,417
New loans, net of repayments & charge offs 1,993,534 (9,146,040)
Net capital expenditures (248,449) (1,325,865)
Real estate owned sold 585,116 664,621
Real estate held for investment purchased (56,096) (21,905)
Real estate held for investment sold 40,000 168,600
Premium paid for Key Bank acquisition -- (1,590,228)
_______________ _______________
Net cash provided by (used in)
investing activities (15,946,917) (22,445,483)
Cash flows from financing activities:
Net change in deposits (501,706) 25,161,838
Net change in repurchase agreements 1,196,884 2,425,603
Dividends paid (292,929) (236,375)
Proceeds from stock issuance 748,298 --
Net (decrease) increase in advances
from Federal Home Loan Bank of Boston 7,400,000 (9,700,000)
Net change in notes payable (383,278) (382,511)
_______________ _______________
Net cash provided by financing
activities 8,167,269 17,268,555
_______________ _______________
Net (decrease) increase in cash
and cash equivalents (4,212,359) (2,971,331)
Cash and cash equivalents,
beginning of period 14,740,070 11,336,505
_______________ _______________
Cash and cash equivalents,
end of period $ 10,527,711 $ 8,365,174
=============== ===============
Cash and cash equivalents include cash
on hand, amounts due from banks, interest
bearing deposits and federal funds sold
Supplemental schedule of noncash
investing activities:
Net increase (decrease) in valuation
for unrealized market value adjustments
on available for sale securities (388,251) 4,427
Net transfer (to) from Loans to
Other Real Estate Owned (100,174) 481,775
Supplemental disclosure of cash paid
during the period for:
Income taxes paid, net of refunds 693,700 693,500
Interest paid 6,904,084 5,743,798
</TABLE>
BETHEL BANCORP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 1996
1. Basis of Presentation
_____________________
The accompanying unaudited condensed and 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 March 31, 1996 are not necessarily
indicative of the results that may be expected for the year ending
June 30, 1996. For further information, refer to the audited consolidated
financial statements and footnotes thereto for the fiscal year ended
June 30, 1995 included in the Company's annual report on Form 10-K.
2. Securities
__________
Securities available for sale at the carrying and approximate market
values are summarized below.
<TABLE>
<CAPTION>
March 31, 1996 June 30, 1995
_________________________ _________________________
Market Market
Cost Value Cost Value
____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
Debt securities issued
by the U.S. Treasury
and other U.S.
Government corporations
and agencies $ 1,250,000 $ 1,229,850 $ 250,000 $ 239,225
Corporate bonds 149,634 141,750 149,599 141,436
Mortgage-backed
securities 25,675,509 25,052,140 9,315,419 9,297,505
Equity securities 557,187 475,624 577,939 470,085
____________ ____________ ____________ ____________
$27,632,330 $26,899,364 $10,292,957 $10,148,251
============ ============ ============ ============
March 31, 1996 June 30, 1995
_________________________ ________________________
Market Market
Cost Value Cost Value
____________ ____________ ____________ ____________
Due in one year
or less -- -- -- --
Due after one year
through five years 250,000 239,850 -- --
Due after five years
through ten years 149,634 141,750 399,599 380,661
Due after ten years 1,000,000 990,000 -- --
Mortgage-backed
securities (including
securities with interest
rates ranging from
5.15% to 8.5% maturing
April 2009 to
March 2026) 25,675,509 25,052,140 9,315,419 9,297,505
Equity securities 557,187 475,624 577,939 470,085
____________ ____________ ____________ ____________
$27,632,330 $26,899,364 $10,292,957 $10,148,251
============ ============ ============ ============
</TABLE>
BETHEL BANCORP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 1996
3. Allowance for Loan Losses
_________________________
The following is an analysis of transactions in the allowance for loan losses:
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
_______________________________
1996 1995
______________ ______________
<S> <C> <C>
Balance at beginning of year $ 2,396,000 $ 2,463,000
Add provision charged to operations 455,524 494,590
Recoveries on loans previously charged off 58,229 36,387
______________ ______________
2,909,753 2,993,977
Less loans charged off 412,753 463,977
______________ ______________
Balance at end of period $ 2,497,000 $ 2,530,000
============== ==============
</TABLE>
4. Advances from Federal Home Loan Bank
____________________________________
A summary of borrowings from the Federal Home Loan Bank is as follows:
<TABLE>
<CAPTION>
March 31, 1996
__________________________________________________
Principal Interest Maturity
Amounts Rates Dates
<C> <C> <C>
______________ _____________________ ____________
$22,100,000 5.17% - 8.30% 1997
4,500,000 4.97% - 6.86% 1998
16,500,000 5.64% - 6.35% 1999
______________
$43,100,000
==============
June 30, 1995
___________________________________________________
Principal Interest Maturity
Amounts Rates Dates
______________ _____________________ ___________
$25,400,000 4.41% - 7.65% 1996
5,300,000 5.17% - 8.30% 1997
4,000,000 4.97% - 6.35% 1998
1,000,000 5.75% 1999
______________
$35,700,000
==============
</TABLE>
5. Stock Dividend
_______________
The Company paid a 100% stock dividend to all shareholders on
December 15, 1995. Based on this dividend, the current common stock
outstanding was 1,203,764 shares at March 31, 1996. The Company anticipates
continuing the annual dividend of $.32 per share, resulting in an increase
in yield to shareholders.
BETHEL BANCORP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 1996
6. Reserve for Credit Losses
_________________________
Effective July 1, 1995, the Company adopted Financial Accounting Standards
Board (FASB) Statement No. 114,"Accounting by Creditors for Impairment of
a Loan"(SFAS No. 114) as amended by SFAS No. 118, "Accounting by Creditors
for Impairment of a Loan-Income Recognition and Disclosures"(SFAS No. 118).
SFAS 114 and 118, taken together, require the Company to identify impaired
loans and generally value them at the lower of (i) the present value of
expected cash flows discounted at the loan's effective interest rate or (ii)
the loan's observable market price or (iii) fair value of the loan's
collateral, if the loan is collateral dependent. The two statements, in
connection with recent regulatory guidance, require the Company to reclassify
its in-substance foreclosures to loans and disclose them as impaired loans.
Commercial and commercial real estate loans, with balances to one borrower
greater than $25,000, are considered impaired when it is probable that the
Company will not collect all amounts due in accordance with the contractual
terms of the loan. Except for certain restructured loans, impaired loans
are loans on non-accrual status. Residential mortgage loans and consumer
installment loans are considered homogenous loans that will be reserved for
under the Company's general reserve analysis. The Company's policy for
charging off loans to the reserve is 120 days delinquent for consumer
installment loans and for all other loans when a loss has been determined.
The Company policy for an insignificant delay in payments is when the
contractual payment is up to 60 days delinquent and considers an immaterial
shortfall in payments to be 10% or less of the contractual payment amount
due. Upon adoption of SFAS 114 and 118, the Company did not change its method
of recognizing interest income on impaired loans. When a loan is placed on
non-accrual status, all interest previously accrued, but not collected, is
reversed against interest income. Subsequent cash receipts are amortized
and applied to principal and interest based on the contractual terms of the
non-accrual loan. Impaired loans are returned to accrual status and are no
longer considered impaired when they become current, as to principal and
interest, and demonstrate a period of performance under the contractual terms,
and, in management's opinion, are fully collectable. Residential and consumer
installment loans are returned to accrual status when the contractual payments
are less than 90 days delinquent and in management's opinion are fully
collectable.
Loans which were restructured prior to the adoption of SFAS No. 114, and which
are performing in accordance with the renegotiated terms are not required to
be reported as impaired. Loans restructured subsequent to the adoption of
SFAS No. 114 are required to be reported as impaired in the year of
restructuring. Thereafter, such loans can be removed from the impaired loan
disclosure if the loans were paying a market rate of interest at the time of
restructuring and are performing in accordance with their renegotiated terms.
In accordance with SFAS No. 114, a loan is classified as an in-substance
foreclosure when the Company has taken possession of the collateral regardless
of whether formal foreclosure proceedings have taken place. Loans classified
as in-substance foreclosures prior to adoption of SFAS No. 114, but for which
the Company had not taken possession of the collateral was $304,232 at June 30,
1995. This balance was reclassified from real state owned to loans for the
comparable periods on the consolidated balance sheets and did not have a
significant effect on the financial position, liquidity or results of
operations of the Company.
At March 31, 1996, the recorded investment in impaired loans was $754,095 of
commercial loans and $1,019,622 of commercial real estate loans, for a total
of $1,773,717, all of which were on non-accrual status. Included in this amount
is $1,107,340 of impaired loans for which the related impairment reserve is
$509,266, and $666,377 of impaired loans which do not require an impairment
reserve. The average recorded investment in impaired loans was $1,882,061 and
$1,866,132 for the quarter and nine months ended March 31, 1996, respectively.
The amount of interest income recognized on impaired loans for the quarter was
$26,741 and nine months ended March 31, 1996 was $60,636. The allowance for
loan losses contains $1,988,000 for homogenous loans as deemed necessary to
maintain reserves at levels considered adequate by management.
7. Merger of Banking Subsidiaries and Proposed Name Change
_______________________________________________________
On Monday, January 8, 1996, the President of Bethel Bancorp (the "Company"),
James D. Delamater, announced that the Company, intends to merge the Company's
two wholly-owned banking subsidiaries, Bethel Savings Bank F.S.B. and Brunswick
Federal Savings Bank, F.A. (the "Bank Subsidiaries"). The proposed merger
was approved by the Boards of Directors of the two Bank Subsidiaries on
January 3, 1996 and the Office of Thrift Supervision on March 19, 1996.
The resulting bank will be known as Northeast Bank, F.S.B.
On the same day, Mr. Delamater announced that the Company intends to change
its name to Northeast Bancorp upon the merger of its two Bank Subsidiaries
and at the same time to change the symbol under which its stock trades
on The NASDAQ Stock Market to NEBC.
BETHEL BANCORP AND SUBSIDIARIES
Part I.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
_______________________________________________________________________
of Operation
____________
Financial Condition
___________________
Total consolidated assets were $218,187,574, which represents an increase of
$10,678,437 for the nine months ended March 31, 1996, when compared to
June 30, 1995. Total loans decreased by $2,401,019, while loans held for
sale increased by $49,732. Federal Home Loan Bank (FHLB) overnight deposits
decreased by $4,580,708, while cash and due from banks increased by $310,803
from June 30, 1995 to March 31,1996. Securities available for sale,
trading account securities and FHLB Stock increased by $16,751,113,
$1,140,910 and $150,000, respectively during the same period. Total deposits
decreased by $501,706, total repurchase agreements increased by $1,196,884,
and total borrowings from the FHLB increased by $7,400,000 from June 30, 1995
to March 31, 1996.
The Company increased its FHLB advances by $7,400,000. The proceeds from the
increased borrowings, along with $4,580,708 from the reduction of FHLB
overnight deposits, were utilized to purchase mortgage-backed securities,
thereby increasing the Company s earning assets. The Company restructured its
investment portfolio, during the quarter ended December 31, 1995, to improve
the yield on the securities portfolio. This was accomplished by selling
mortgage-backed securities with lower coupon rates and purchasing additional
mortgage-backed securities with better yields. In the March 31, 1996 quarter,
the Company took advantage of the fluctuating market rates and prices and
purchased additional mortgage-backed securities, resulting in an increase in
securities available for sale of $14,389,182 in the current quarter and
$16,751,113 year to date. The additional securities will have a net earnings
yield benefit of 200 basis points, when factoring in the average yield on
FHLB overnight deposits and the average cost on FHLB advances. FHLB stock
increased by $150,000 due the increased levels of FHLB advances. The FHLB
requires institutions to hold a certain level of FHLB stock based on
advances outstanding.
Total loans decreased by $2,401,019 for the nine months ended March 31, 1996.
The total principal decrease was primarily due to regular principal payments
on the loan portfolio as well as a principal reductions from portfolio loan
pay-offs. The local competitive environment and customer's response to
favorable secondary market rates has effected the Company's ability to
increase the loan portfolio. Loans held for sale increased by $49,732 due to
the increased volume of mortgage loans sold and still pending closure to
Freddie Mac and Fannie Mae. The increased volume was due to favorable
secondary market rates during the Company's March 31, 1996 quarter.
The loan portfolio contains elements of credit and interest rate risk. The
Company primarily lends within its local market areas, which management
believes helps it to better evaluate credit risk. The Company also maintains
a well collateralized position in real estate mortgages. Residential real
estate mortgages make up 69% of the total loan portfolio, in which 49% of the
residential loans are variable rate products. It is management's intent to
increase the volume in variable rate residential loans, by selling fixed rate
loans to the secondary market and marketing portfolio variable rate loans,
to reduce the interest rate risk in this area. Fifteen percent of the
Company's total loan portfolio balance is commercial real estate mortgages.
Similar to the residential mortgages, the Company tries to mitigate credit
risk by lending in its local market area as well as maintaining a well
collateralized position in the real estate. The commercial real estate loans
have minimal interest rate risk as 86% of the portfolio consists of variable
rate products. Commercial loans make up 7% of the total loan portfolio, in
which 90% of its balance are variable rate instruments. The credit loss
exposure on commercial loans is highly dependent on the cash flow of the
customer's business. The Banks attempt to mitigate losses in commercial loans
through lending in accordance to the Company's credit policies. Consumer and
other loans make up 9% of the loan portfolio. Since these loans are primarily
fixed rate products, they have interest rate risk when market rates increase.
These loans also have credit risk with, at times, minimal collateral security.
Management attempts to mitigate risk by keeping the products offered
short-term, receiving a rate of return equal to the measured risks, and lending
to individuals in the Company's known market areas.
Other real estate owned decreased by $399,816 from June 30, 1995 to March 31,
1996 due to sales of properties. On July 1, 1995 the Company adopted FASB
Statement of Financial Accounting Standards Nos. 114 and 118. The adoption
resulted in the reclassification, as of June 30,1995, of in-substance
foreclosure loans to impaired loans. SFAS 114 and 118, taken together, require
the Company to identify impaired loans and generally value them at the lower
of (i) the present value of expected future cash flows discounted at the
loan's original effective interest rate or (ii) the loan's observable market
price or (iii) fair value of the loan's collateral, if the loan is collateral
dependent. The two statements, in connection with recent regulatory guidance,
require the Company to reclassify its in-substance foreclosures to loans and
disclose them as impaired loans. The effect of SFAS 114 and 118 did not have
a significant effect on the financial position, liquidity or results of
operations of the Company and is more fully discussed in footnote 6 to
the financial statements.
Bank premises and equipment decreased by $190,842 and Goodwill decreased by
$223,004 from June 30, 1995 to March 31, 1996. The reduction in these
accounts were due to normal depreciation and amortization.
Total deposits were $146,618,164 and securities sold under repurchase
agreements were $3,782,271 as of March 31, 1996. These amounts represent a
decrease of $501,706 and an increase of $1,196,884, respectively, compared to
June 30, 1995. The Company s subsidiary Banks experienced some seasonal
fluctuation in balances. Brokered deposits represented $6,630,988 of the
total deposits for the quarter ended March 31, 1996 and decreased by
$2,156,713 when compared to June 30, 1995's $8,787,701 balance. The Company
utilizes, as alternative sources of funds, brokered CD's when the national
brokered CD interest rates are less than the interest rates on local market
deposits. Brokered deposits are similar to local deposits, in that both are
interest rate sensitive with the respect to the Company's ability to retain
the funds. Based on the normal growth of local deposits and attractive
FHLB advance rates, management has chosen to reduce its level of brokered
deposits. Management will be reviewing an additional $2,500,000 of brokered
deposits maturing in the next quarter. Total advances from the FHLB were
$43,100,000 as of March 31, 1996, an increase of $7,400,000 when compared to
June 30, 1995. The Company's current advance availability, subject to the
satisfaction of certain conditions, is approximately $52,500,000 over and
above the March 31, 1996 advances reported. Mortgages, free of liens, pledges
and encumbrances are required to be pledged to secure FHLB advances. The
Company utilizes FHLB advances, as alternative sources of funds, when the
interest rates of the advances are less than market deposit interest rates and
to fund short-term liquidity demands for loan volume. With the borrowing
capacity at the Federal Home Loan Bank and the continued growth in bank
deposits and repurchase agreements, management believes that the Company's
available liquidity resources are sufficient to support future loan growth.
Notes payable decreased by $383,278, for the nine months ended March 31, 1996,
due to regular principal payments. Due to broker increased by $2,081,286
due to the purchase of GNMA securities that had not settled by March 31, 1996.
Total equity of the Company was $18,509,274 as of March 31, 1996 versus
$17,275,278 at June 30, 1995. On September 8, 1995 Square Lake Holding
Corporation exercised 50,000 warrants at an aggregate price of $700,000.
These proceeds have been utilized as general working capital. The exercise of
these warrants contributed to the growth of the Company's total equity.
Warrants outstanding were 133,764 as of March 31, 1996. The Company paid a
100% stock dividend to all shareholders on December 15, 1995. The current
common stock outstanding was 1,203,764 shares at March 31, 1996. The Company
anticipates continuing the annual dividend of $.32 per share, resulting in an
increase in yield to shareholders, from prior to the stock dividend. Due to
the ability of the Company to pay dividends from the subsidiaries to the
holding company, the effect of increasing the dividend payout to common stock
shareholders will not have a significant effect on the financial position,
liquidity, or results of operations of the Company. Book value per common
share was $13.71 as of March 31, 1996 and $13.95 at June 30, 1995, when
restated for the 100% stock dividend. Total equity to total assets of the
Company as of March 31, 1996 was 8.48%.
At March 31, 1996, the Banks' regulatory capital was in compliance with
regulatory capital requirements as follows:
<TABLE>
<CAPTION>
Brunswick
Bethel Savings Federal Savings,
Bank, F.S.B. F.A.
_________________ ________________
<S> <C> <C>
Capital Requirements:
Tangible capital $ 1,677,000 $ 1,548,000
Percent of tangible assets 1.50% 1.50%
Core capital $ 3,354,000 $ 3,095,000
Percent of adjusted tangible assets 3.00% 3.00%
Leverage capital $ 4,472,000 $ 4,127,000
Percent of adjusted leverage assets 4.00% 4.00%
Risk-based capital $ 5,867,000 $ 4,398,000
Percent of risk-weighted assets 8.00% 8.00%
Actual:
Tangible capital $ 8,178,000 $ 7,689,000
Percent of adjusted total assets 7.32% 7.45%
Excess of requirement $ 6,501,000 $ 6,141,000
Core capital $ 8,178,000 $ 7,689,000
Percent of adjusted tangible assets 7.32% 7.45%
Excess of requirement $ 4,824,000 $ 4,594,000
Leverage capital $ 8,178,000 $ 7,689,000
Percent of adjusted leverage assets 7.32% 7.45%
Excess of requirement $ 3,706,000 $ 3,562,000
Risk-based capital $ 8,480,000 $ 8,377,000
Percent of risk-weighted assets 11.56% 15.24%
Excess of requirement $ 2,613,000 $ 3,979,000
</TABLE>
The carrying value of securities available for sale of the Company was
$26,899,364, which is $732,966 less than the cost of the underlying securities,
at March 31, 1996. The reduction in carrying value from the cost was
primarily attributable to the decline in market value of mortgage-backed
securities. The difference between cost and carrying value of the securities
was primarily due to the change in current market prices from the price at the
time of purchase. The Company has primarily invested in mortgage-backed
securities. Substantially all of the mortgage-backed securities are high grade
government backed securities. Management believes that the yields currently
received on this portfolio are satisfactory. As in any long term earning
asset with a fixed earning rate, the market value of mortgage-backed
securities will decline when market interest rates increase. Since these
mortgage-backed securities are backed by the U.S. government, there is little
or no risk in loss of principal. Therefore, management believes that during
adverse market fluctuations it would be advantageous to hold these securities
until the market values recover.
The Company's allowance for loan losses was $2,497,000 as of March 31, 1996
versus $2,396,000 as of June 30, 1995, representing 1.49% and 1.41% of total
loans, respectively. The Company had non-performing loans totaling
$3,070,000 at March 31, 1996 as compared to $2,266,000 at June 30, 1995.
Non-performing loans represented 1.41% and 1.09% of total assets at March 31,
1996 and June 30, 1995, respectively. The Company's allowance for loan
losses was equal to 81% and 106% of the total non-performing loans at March 31,
1996 and June 30, 1995, respectively. At March 31, 1996, the Company had
approximately $4,027,000 of loans classified substandard, exclusive of the
non-performing loans stated above, that could potentially become
non-performing due to delinquencies or marginal cash flows. Along with
non-performing and delinquent loans, management takes an aggressive posture
in reviewing its loan portfolio to classify loans substandard. The following
table represents the Company's non-performing loans as of March 31 and
June 30, 1995, respectively:
<TABLE>
<CAPTION> March 31, June 30,
Description 1996 1995
_________________________ _______________ ________________
<S> <C> <C>
1-4 Family Mortgages $ 1,354,000 637,000
Commercial Mortgages 1,250,000 1,223,000
Commercial Installment 375,000 375,000
Consumer Installment 91,000 31,000
_______________ ________________
Total non-performing 3,070,000 2,266,000
=============== ================
</TABLE>
The following table reflects the quarterly trend of total delinquencies 30 days
or more past due, including non-performing loans, for the Company as a
percentage of total loans:
<TABLE>
<C> <C> <C> <C>
6-30-95 9-30-95 12-31-95 3-31-96
2.46% 2.15% 3.51% 2.82%
</TABLE>
The majority of the non-performing loans are seasoned loans located in the
Oxford county area. This geographic area continues to have a depressed
economy resulting in high unemployment and a soft real estate market, while the
economy in the state of Maine appears to be stable with moderate or flat
growth. The weakness in the Oxford county economy is a risk to the overall
credit quality of the loan portfolio of Bethel Savings Bank. Bethel Savings
Bank has expanded its market beyond Oxford county with the acquisition of the
Key Bank branches. Management has allocated substantial resources to the
collection area in an effort to control the growth in non-performing,
delinquent and substandard loans in Oxford county. In addition, the Company
has historically experienced a seasonal increase in delinquent loans during
the winter months, which increased total delinquencies during the second
quarter, followed by an improvement in the spring and summer months. The
Company will continue to monitor loans within these portfolios and increase
the levels of allowance for loan losses when necessary.
Classified assets are also considered in management's analysis of the adequacy
of allowance for loan losses. Based on reviewing the credit risk and collateral
of delinquent loans, classified loans and non-performing loans, management
has considered the risks of the loan portfolio and believes the allowance for
loan losses is adequate. Management at each of the subsidiary Banks primarily
lends within their local market areas, which management believes helps it
to better evaluate credit risk. The Company also maintains a well
collateralized position in real estate mortgage loans. On a regular and
ongoing basis, Company management evaluates the adequacy of the allowance
for loan losses. The process to evaluate the allowance involves a high degree
of management judgement. The methods employed to evaluate the allowance for
loan losses are quantitative in nature and consider such factors as the
loan mix, the level of non-performing loans, delinquency trends, past
charge-off history, loan reviews and classifications, collateral, and the
current economic climate. Management believes that the allowance for loan
losses is adequate considering the level of risk in the loan portfolio. While
management uses its best judgement in recognizing loan losses in light of
available information, there can be no assurance that the Company will not have
to increase its provision for loan losses in the future as a result of changing
economic conditions, adverse markets for real estate or other factors. In
addition, various regulatory agencies, as an integral part of their examination
process, periodically review the Company's allowance for loan losses. Such
agencies may require the Company to recognize additions to the allowance for
loan losses based on their judgements about information available to them at
the time of their examination. The Company's most recent examination by the
OTS was on May 15, 1995. At the time of the exam the regulators proposed no
additions to the allowance for loan losses.
Results of Operations
_____________________
Net income for the quarter ended March 31, 1996 was $301,805. Primary earnings
per share was $.20 and the fully diluted earnings per share was $.19 for the
quarter ended March 31, 1996. This compares to earnings of $408,073 or a
primary earnings per share of $.31 per share and a fully diluted earnings per
share of $.28, for the quarter ended March 31, 1995. Net income for the nine
months ended March 31, 1996 was $1,166,878 versus $1,220,898 for the period
ended March 31, 1995. Primary earnings per share was $.83 and fully diluted
earnings per share was $.76 for the nine month period ended March 31, 1996
versus primary earnings per share of $.91 and fully diluted earnings per share
of $.84 for the period ended March 31, 1995. The 1995 earnings per share has
been restated to give consideration to the 100% stock dividend.
The Company's net interest income was $2,267,012 for the quarter ended
March 31, 1996 versus $2,279,500 for the quarter ended March 31, 1995, for a
decrease of $12,488. This decrease was due to an increase of $232,369
in total interest income offset by an increase in total interest expense of
$244,857.
The Company's net interest income was $6,710,996 for the nine months ended
March 31, 1996, versus $6,632,694 for the nine months ended March 31, 1995,
an increase of $78,302. Total interest income increased $1,177,955 during the
nine months ended March 31, 1996 compared to the nine months ended
March 31, 1995, resulting from the following items. Interest income on loans
and loans held for sale increased by $1,146,118 for the nine months ended
March 31, 1996 resulting from a $458,255 increase due to an increase in the
volume of loans as well as an increase of $687,863 due to increased rates on
loans. Interest income on investment securities decreased by $157,952
resulting from a $103,062 decrease due to a decrease in volume as well as a
decrease of $54,890 due to decreased rates on investments. Interest income on
short term liquid funds increased by $189,789 resulting from a $158,467
increase due to an increase in volume as well as an increase of $31,322 due to
increased rates on FHLB overnight deposits. The increase in total interest
expense of $1,099,653 for the nine months ended March 31, 1996 resulted from
the following items. Interest expense on deposits increased by $1,035,014
for the nine months ended March 31, 1996 resulting from a $350,974 increase due
to an increase in the volume of deposits as well as an increase of $684,040 due
to increasing deposit rates. Interest expense on repurchase agreements
increased by $78,502 due to an increase of $75,657 in the volume of repurchase
agreements as well as an increase of $2,845 due to increased repurchase
agreement rates. Interest expense on borrowings decreased by $13,863 for the
nine months ended March 31, 1996 resulting from a decrease of $193,345 due
to a decrease in the volume of borrowings offset by an increase of $179,482
due to a change in the mix of interest rates on borrowings. The information
produced for the rate/volume analysis is based on average balances for the
year. In utilizing average balances, the rate/volume trends are reported in a
more accurate manner and could be different than the volume trends reported
on the consolidated balance sheets. The changes in net interest income, as
explained above, are also presented in the schedule below.
<TABLE>
<CAPTION>
Bethel Bancorp
Rate/Volume Analysis for the nine months ended
March 31, 1996 versus March 31, 1995
Difference Due to
Volume Rate Total
____________ ____________ ___________________
<S> <C> <C> <C>
Investments (103,062) (54,890) (157,952)
Loans 458,255 687,863 1,146,118
FHLB & Other Deposits 158,467 31,322 189,789
____________ ____________ ___________________
Total 513,660 664,295 1,177,955
Deposits 350,974 684,040 1,035,014
Repurchase Agreements 75,657 2,845 78,502
Borrowings (193,345) 179,482 (13,863)
____________ ____________ ___________________
Total 233,286 866,367 1,099,653
____________ ____________ ___________________
Net Interest Income 280,374 (202,072) 78,302
============ ============ ===================
</TABLE>
Rate/Volume amounts spread proportionately between volume and rate.
From October 1993 to late 1995, actions by the Federal Reserve Board resulted
in increases in prime lending rates. In December 1995, actions by the Federal
Reserve Board resulted in a decrease in prime lending rates. Approximately
20% of the Company's loan portfolio is comprised of floating rate loans based
on a prime rate index. Interest income on these existing loans will fluctuate
in the same direction as the prime rate, as well as on approximately 21% of
other loans in the Company's portfolio that are based on short-term rate
indices such as the one-year treasury bill. A fluctuation in short-term
interest rates will also effect deposit and FHLB advance rates, in the same
manner. The Company is experiencing and anticipates additional net interest
margin compression due to fluctuating rates. The impact on net interest
income will depend on, among other things, actual rates charged on the
Company's loan portfolio, deposit and advance rates paid by the Company and
loan volume.
Total non-interest income was $455,466 and $1,620,238 for the three and nine
months ended March 31, 1996 versus $543,898 and 1,611,829 for the three and
nine months ended March 31, 1995. Service fee income was $250,005 and $766,824
for the three and nine months ended March 31, 1996 versus $248,119 and $698,405
for the three and nine months ended March 31, 1995. The March 31, 1996 nine
month increase of $68,419 in service fee income was primarily due to the
deposit fee income generated from the acquisition of the Key Bank branches.
Income from available for sale securities gains was $19,187 and $225,570 for
the three and nine months ended March 31, 1996 versus $(1,848) and $6,280
for the three and nine months ended March 31, 1995. Gains from the sale of
securities have increased due to the Company selling some of its available
for sale securities, taking advantage of the fluctuation in market prices in
the mortgage-backed security portfolio. Income from trading account securities
was $16,093 and 23,098 for the three and nine months ended March 31, 1996
versus $151,910 and $375,732 for the three and nine months ended March 31,
1995. The gain on trading account, in the March 31, 1995 quarter, was due to
the sale and appreciation in the market values of the securities classified as
trading.
Other income was $170,181 and $604,746 for the three and nine months ended
March 31, 1996, which was an increase of $24,464 and an increase of $73,334
from other income for the three and nine months ended March 31, 1995, which
was $145,717 and $531,412, respectively. Gains on the sale of loans held for
sale amounted to $59,218 and $182,386 for the three and nine months ended
March 31, 1996 versus $24,639 and $141,399 for the three and nine months ended
March 31, 1995. Gains from the sale of loans have increased as a result of
increased originations due to secondary market loan demand from the Company's
customers due to current low rates. Gross income for First New England
Benefits was $67,766 and $222,267 for the three and nine months ended March 31,
1996 versus $85,659 and $255,349 for the three and nine months ended
March 31, 1995. The amounts discussed in this paragraph are reflected in other
income.
Total operating expense, or non-interest expense, for the Company was
$2,080,138 and $6,031,733 for the three and nine months ended March 31, 1996
versus $2,030,866 and $5,823,344 for the three and nine months ended
March 31, 1995.
Compensation expense increased by $92,041 and $218,234 for the three and nine
months ended March 31, 1996 as a result of the addition of the four new
branches, annual salary increases and the increase in the number of individual
employees qualifying for the Company's profit sharing and 401(k) program. Net
occupancy expenses increased by $22,403 and $37,496 for the three and nine
months ended March 31, 1996. The quarter and nine month increase in occupancy
expense was primarily due to seasonal factors and the four new branches
acquired from Key Bank, respectively. Equipment expense decreased by $10,691
and increased by $16,007 for the three and nine months ended March 31, 1996
due to the expenses associated with the new acquisitions as well as the general
needs at the subsidiaries. Goodwill expense increased by $2,041 and $60,880
for the three and nine months ended March 31, 1996 due to the amortization of
the premium paid for the four Key Bank branches. Other expenses have decreased
by $56,522 and $124,228 for the three and nine months ended March 31, 1996 as
compared to the three and nine months ended March 31, 1995, primarily due to
the Company decreasing its computer services, loan expenses, telephone,
supplies and deposit insurance expenses . In September 1995, the Company
received a rebate from the FDIC for its BIF insured deposits. This rebate
reduced other expenses by approximately $56,000.
The FDIC has proposed a one time assessment on all SAIF insured deposits in a
range of $.85 to $.90 per $100 of domestic deposits held as of March 31, 1995.
This one time assessment is intended to recapitalize the SAIF to the required
level of 1.25% of insured deposits and could be payable in early 1996. If the
assessment is made at the proposed rates, the effect on the Company would be an
after tax charge of approximately $320,000 (assuming an income tax rate of
36%). The one time charge assumes a .85% charge on Brunswick Federal
Savings, F.A. deposits of approximately $60,000,000 at March 31, 1995, which
does not include the BIF insured deposits of the newly acquired Key Bank
branches. Subsequent to the proposed payment of the one time assessment, the
ongoing risk based assessment schedule for the newly capitalized SAIF would
be similar to the schedule of BIF (the current FDIC board proposal has rates
ranging from 4 to 31 basis points). The Company anticipates that it would be
assessed at the lowest BIF rate as it currently is assessed at the lowest SAIF
rate due to its regulatory standing. If the Company's premium is reduced to 4
basis points, the Company would have future after tax annual savings of
approximately $180,000 (assuming an income tax rate of 36%). The annual
savings assumes a .04% insurance premium charge compared to the current .23%
insurance premium paid on the Company's total deposit base of $149,000,000.
The Company announced its intention to merge the Company's two wholly-owned
banking subsidiaries, Bethel Savings Bank, F.S.B. and Brunswick Federal
Savings, F.A.. The merged banking subsidiaries would operate under the new
name Northeast Bank, F.S. B.. The Company also intends to relocate its
corporate headquarters and open a new retail banking facility in the
Lewiston/Auburn area. The subsidiary merger received regulatory approval on
March 19, 1996 and is expected to be completed by July 1, 1996. Due to the
corporate plans mentioned above, the Company will incur additional expenses
that will have a negative impact on earnings in the following quarters. The
additional merger expenses are one time in nature and are estimated to be at
a minimum of approximately $200,000. The Company anticipates, over the long
term, these moves will lead to an increase in efficiency and performance.
Impact of Inflation
The consolidated financial statements and related notes herein have been
presented in terms of historic dollars without considering changes in the
relative purchasing power of money over time due to inflation. Unlike many
industrial companies, substantially all of the assets and virtually all of
the liabilities of the Company are monetary in nature. As a result, interest
rates have a more significant impact on the Company's performance than the
general level of inflation. Over short periods of time, interest rates may not
necessarily move in the same direction or in the same magnitude as inflation.
BETHEL BANCORP AND SUBSIDIARIES
Part II - Other Information
Item 1. Legal Proceedings
_________________
Not Applicable.
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
___________________________________________________
Not Applicable.
Item 5. Other Information
_________________
Not Applicable.
Item 6. Exhibits and Reports on Form 8 - K
__________________________________
(a) Exhibits
________
3.2 Restated by-laws of Bethel Bancorp as amended February 23, 1996
11 Statement regarding computation of per share.
27 Financial data schedule
(b) Reports on Form 8 - K
_____________________
On January 12, 1996, the Company filed a report on Form 8-K announcing
that it intends to merge the Company's two wholly-owned banking subsidiaries,
Bethel Savings Bank F.S.B. and Brunswick Federal Savings Bank, F.A. (the "Bank
Subsidiaries"). The proposed merger was approved by the Boards of Directors of
the two Bank Subsidiaries on January 3, 1996. The resulting bank, which will
be known as Northeast Bank, F.S.B. will have assets of over $200,000,000 and
will operate eight branches in four Maine counties. On March 19, 1996, the
Bank Subsidiaries received approval from the Office of Thrift Supervision
for the proposed merger.
Included in the report on Form 8-K filed on January 12, 1996, the Company
announced that it intends to change its name to Northeast Bancorp upon the
merger of its two Bank Subsidiaries and at the same time will change the
symbol under which its stock trades on the NASDAQ Stock Market to NEBC.
BETHEL BANCORP AND SUBSIDIARIES
Signatures
Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
BETHEL BANCORP
__________________
(Registrant)
/s/ James D. Delamater
____________________________
James D. Delamater
President and CEO
/s/ Richard Wyman
____________________________
Richard Wyman
Chief Financial Officer
Date: May 13, 1996
BETHEL BANCORP AND SUBSIDIARIES
Index to Exhibits
EXHIBIT NUMBER DESCRIPTION
11 Statement regarding computation of per share earnings
27 Financial Data Schedule
BY-LAWS OF BETHEL BANCORP
APPROVED BY THE BOARD OF DIRECTORS
AS AMENDED THROUGH FEBRUARY 23, 1996
-------------------------------------------
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1. Place of Meeting. All meetings of the shareholders of the
_________ _________________
Corporation shall be held at the principal office of the Corporation in the
State of Maine, or at such other place, within or without the State of Maine,
as may, from time to time, be fixed by the Board of Directors or as shall be
specified or fixed in the respective notices or waivers of notice thereof.
Section 2. Annual Meetings. The annual meeting of the shareholders shall
_________ ________________
be held not more than one hundred, thirty-five (135) days after the close of
the fiscal year of the Corporation, on such date and at such hour as may be
fixed by the Board of Directors and stated in the notice of such meeting or
on such other date and at such time as shall be stated in the notice of the
meeting or otherwise specified by the President. The Clerk shall serve
personally or by mail a written notice not less than ten (10) days nor more
than fifty (50) days before such meeting, addressed to each shareholder at
his address as it appears on the stock book; but at any meeting at which all
shareholders not present shall have waived notice in writing, the giving of
notice as above required, may be foregone.
Section 3. Special Meetings. A special meeting of the shareholders for
_________ _________________
any purpose or purposes, unless otherwise prescribed by statue, may be called
at any time by the Chairman of the Board, if any, the President, or a
Vice-President, or by a majority of the Board of Directors, or upon written
application therefore to the Clerk by the holders of not less than ten percent
(10%) of the shares entitled to vote at the meeting. Written notice of such
meeting, stating the purpose for which it is called, shall be served
personally, or by mail, not less than ten (10) nor more than fifty (50) days
before the date set for such meeting. If mailed, it shall be directed to every
shareholder at his address as it appears on the stock book, but, at any meeting
at which all shareholders shall be present, or of which all shareholders not
present have waived notice in writing, the giving of notice as above required
may be foregone. No business other than that specified in the call for the
meeting shall be transacted at any special meeting of the shareholders.
Section 4. Quorum. At each meeting of the shareholders, the presence,
_________ _______
in person or by proxy, of the holders of a majority of the issued and
outstanding stock of the corporation entitled to vote at such meeting, shall
constitute a quorum for the transaction of business except where otherwise
provided by law or by the Articles of Incorporation of the Corporation or any
amendment thereto. In the absence of a quorum at any meeting or any
adjournment thereof, the shareholders of the Corporation present in person
or by proxy and entitled to vote shall have the power to adjourn the meeting,
from time to time, until shareholders holding the requisite amount of stock
shall be present or represented. At any such adjourned meeting at which a
quorum is present, any business may be transacted which might have been
transacted at the meeting as originally called. Notice of any adjourned
meeting of the shareholders shall not be required to be given, except when
expressly required by law.
Section 5. Organization. The Chairman of the Board, if any, or in the
_________ _____________
absence of the Chairman of the Board, the President or a Vice-President, or a
Chairman designated by the Board of Directors or by the shareholders shall
preside at every meeting of the shareholders. In the absence of the Secretary,
the presiding officer shall appoint a secretary pro tempore.
Section 6. Voting. (a) Each shareholder of the corporation having voting
__________ _______
rights shall, except as otherwise provided by law or by the Articles of
Incorporation of the Corporation, at every meeting of the shareholders be
entitled to one vote in person or by proxy for each share of the stock of the
Corporation registered in his name on the books of the Corporation
(1) on the date fixed pursuant to Section 2 of Article VI of the By-laws
as the record date for the determination of shareholders entitled to
vote at such meeting, notwithstanding the sale, or other disposal or
transfer on the books of the Corporation of such share on or after
the date so fixed, or
(2) if no such record date shall have been fixed, then at the date on
which notice of such meeting is mailed.
(b) At any meeting of shareholders at which a quorum is present, the holders
of a majority in interest of the stock having voting rights represented thereat
in person or by proxy shall decide any question brought before such meeting
unless a larger or different vote or proportion is required by law or by the
Articles of Incorporation of the Corporation or by these By-laws.
(c) When so requested by a majority of the holders of outstanding shares
present at the meeting, a written ballot shall be used for any vote of the
shareholders. If a written ballot shall be used, each ballot shall state the
name of the shareholder voting, the number of shares owned by him, and if such
ballot be cast by proxy, the name of the proxy.
Section 7. Shareholders' Action Without Meeting. Any action which, under
_________ ____________________________________
any provision of the Maine Business Corporation Act, may be taken at a
meeting of shareholders, may be taken without such a meeting, if consent in
writing, setting forth the action so taken or to be taken, is signed severally
or collectively by the holders of all the issued and outstanding shares of
stock entitled to vote upon such action. The Secretary shall file such consent
or consents with the minutes of the meetings of the Shareholders.
-------------------------------------------
ARTICLE II
BOARD OF DIRECTORS
Section 1. General Powers. The property, affairs and business of the
_________ ______________
Corporation shall be controlled and managed by the Board of Directors.
Without limiting the generality of the foregoing, such control shall include
the power to: hire employees, professional, clerical and secretarial; enter
into employment agreements with employees where deemed advisable; determine
levels of employee compensation, including wages, salaries, bonuses and other
fringe benefits; terminate the employment of an employee; determine conditions
of employment, including hours of work, work responsibility, vacation time,
and sick leave; authorize the purchase or rental of property and determine
all policies of the Corporation with regard to the conduct of the business
of the Corporation. The Board of Directors may, from time to time, delegate
particular responsibilities to specified officers of the Corporation as it
shall deem advisable. They may adopt such rules and regulations for the
conduct of their meeting and the management of the Corporation not
inconsistent with these By-laws, the Corporation's Articles of Incorporation,
or the laws of the State of Maine as they may deem proper.
Section 2. Number, qualifications and Term of Office. Subject to the
_________ __________________________________________
provisions hereof relating to the initial Board, the number of directors of
the Corporation shall be no less than nine (9) and no more than fifteen (15).
The exact number of Directors, within the minimum and maximum limitations
specified in the preceding sentence, shall be fixed, from time to time,
by the Board pursuant to a resolution adopted by a majority of the entire
Board. No decrease in the number of directors constituting the Board shall
shorten the term of any incumbent director. At the 1988 annual meeting of
Shareholders, the Directors shall be divided into three classes as nearly
equal in number as possible with the term of office of the first class to
expire at the 1989 annual meeting of shareholders, the term of office of the
second class to expire at the 1990 annual meeting of shareholders and the
term of office of the third class to expire at the 1991 annual meeting of
Shareholders. At each annual meeting of shareholders following such initial
classification and election, Directors elected to succeed those Directors
whose terms expire shall be elected for a three-year term of office to
expire at the third succeeding annual meeting of shareholders after their
election. Directors need not be shareholders or residents of the State of
Maine.
Section 3. Manner of Election. At the annual meeting of shareholders, the
_________ ___________________
persons receiving the largest number of votes cast, shall be Directors.
Section 4. Quorum and Manner of Acting. A majority of the total number
_________ ___________________________
of Directors then holding office, shall constitute a quorum for the transaction
of business at any meeting except where otherwise provided by statute, the
Corporation's Articles of Incorporation or these By-laws; but, less than a
quorum may adjourn the meeting. At all meetings of the Board of Directors,
each Director present is to have one vote. At all meetings of the Board
of Directors, all questions, the manner of deciding which, is not specifically
regulated by statute or the Corporation's Articles of Incorporation, shall
be determined by a majority of the Directors present at the meeting.
Section 5. Place of Meeting, etc. The Board of Directors may hold its
_________ ______________________
meetings and have one or more offices at such places within or without the
State of Maine as the Board, from time to time, may determine or, in the
case of meetings, as shall be specified or fixed in the respective notices or
waivers of notice thereof.
Section 6. Books and Records. The correct and complete books and records
__________ _________________
of account and minutes of the proceedings of Shareholders and the Board of
Directors shall be kept at the registered office of the Corporation.
Section 7. First Meeting. The Board of Directors shall meet for the
_________ _____________
purpose of organization, the election of officers and the Clerk, and the
transaction of other business as soon as practicable after each annual election
of Directors, on the same day and at the same place at which regular meetings
of the Board are held, or as may be otherwise provided by resolution of the
Board. Notice of such meeting need not be given. Such meeting may be held
at any other time or place which shall be specified in a notice given as
hereinafter provided for special meetings of the Board of Directors or in a
consent and waiver of notice, thereof, signed by all the Directors.
Section 8. Regular Meetings. Regular meetings of the Board of Directors
_________ ________________
shall be held at such place and at such time as the Board shall, from time to
time, by resolution, determine. Notice of regular meetings need not be given.
Section 9. Special Meetings; Notice. Special meetings of the Board of
_________ _________________________
Directors shall be held whenever called by the Chairman of the Board, if any,
or by the President, or by the Clerk at the request of any two Directors at
the time being in office. Notice of each such meeting shall be mailed to each
Director, addressed to him at his residence or usual place of business, at
least two (2) days before the day on which the meeting is to be held, or
shall be sent to him at such place by telegraph, cable, radio or wireless, or
be given personally or by telephone, not later than the day before the day on
which the meeting is to be held. Every such notice shall state the time and
place of the meeting, but, need not state the purpose thereof. Notice of any
meeting of the Board need not be given to any Directors, however, if waived
by him in writing or by telegraph, cable, radio or wireless, whether before or
after such meeting be held, or if he shall be present at such meeting unless
his attendance at the meeting is expressly for the purpose of objecting to
the transaction of any
business because the meeting is not lawfully convened; and any meeting of the
Board shall be a legal meeting without any notice thereof having been given,
if all of the Directors shall be present thereat.
Section 10. Resignations. Any Director of the Corporation may resign at
__________ ____________
any time by giving written notice to the President or to the Clerk of the
Corporation. Such resignation shall take effect at the time specified
therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 11. Removal of Directors. At any meeting of Shareholders called
___________ _____________________
expressly for the purpose, any Director may be removed form office by the
affirmative vote of the holders of seventy-five percent (75%) of the shares
entitled to vote or if removal is for cause, then by a majority of the shares
then entitled to vote. For "cause" shall mean a final adjudication by a
court of competent jurisdiction that the Director (i) is liable for
negligence or misconduct in the performance of his duty, (ii) guilty of a
felony conviction, (iii) has failed to act or has acted in a manner which is
in derogation of the Director's duties.
Section 12. Vacancies. Any vacancy in the Board caused by death,
__________ __________
resignation, retirement, disqualification, removal, or other cause, shall be
filled by a majority vote of the remaining Directors, though less than a
quorum. A Director so chosen shall hold office for the unexpired term of
their predecessors in office. Any Directorship to be filled by reason of an
increase in the authorized number of Directors may be filled by the Board
for a term of office continuing only until the next election of Directors
by the Shareholders.
Section 13. Compensation. Directors shall receive such compensation for
__________ _____________
attendance at regular or special meetings as the Board of Directors shall,
from time to time, determine.
Section 14. Directors' Participation in Meeting by Telephone. A Director
__________ ________________________________________________
may participate in a meeting of the Board of Directors by means of conference
telephone or similar communication equipment enabling all Directors
participating in the meeting to hear one another. Participation in a meeting
pursuant to this section shall constitute presence in person at such meeting.
Section 15. Director's Action Without Meeting. If all the Directors then
__________ _________________________________
holding office severally or collectively consent in writing to any action
taken or to be taken by the Corporation, such action shall be valid as though
it had been authorized at a meeting of the Board of Directors. The Clerk
shall file such consent or consents with the minutes of the meetings of the
Board of Directors.
-------------------------------------------
ARTICLE III
COMMITTEES
Section 1. Designation; Vacancies. The Board of Directors, by a resolution
_________ ______________________
passed by a majority of the whole Board, may designate such number of their
members not less than two (2), including the President of the Corporation,
as it may, from time to time, determine to constitute an Executive Committee,
each member of which, unless otherwise determined by the Board, shall continue
to be member thereof until the expiration of his term of office as a Director.
Section 2. Powers. During the intervals between the meetings of the
_________ ______
Board of Directors, the Executive Committee shall have all of the powers of
the Board of Directors in the management of the business and affairs of the
Corporation, except those prescribed by applicable Maine law, and may
exercise such powers in such manner as the Executive Committee shall deem
best for the interests of the Corporation in all cases in which specific
directions shall not have been given by the Board of Directors.
Section 3. Procedure; Meetings; Quorum. The Executive Committee shall
_________ ____________________________
make its own rules of procedure and shall meet at such times and at such place
or places as may be provided by such rules or by resolution of the Executive
Committee. A majority of the whole number of the members of the Executive
Committee shall constitute a quorum at any meeting thereof, and the act of
a majority of those present at a meeting at which a quorum is present shall
be the act of the Executive Committee. The Board of Directors shall have
power at any time to change the members of the Executive Committee, to fill
vacancies, and to discharge the Executive Committee.
Section 4. Other Committees. The Board of Directors, by resolution passed
_________ _________________
by a majority of the whole Board, may designate members of the board to
constitute other committees, which shall in each case consist of such number
of Directors and shall have and may exercise such powers as the Board may
determine and specify in the respective resolutions appointing them. Such
committees shall have such name or names as may be determined, from time to
time, by resolution adopted by the Board of Directors. The Board of Directors
shall have power at any time to change the members of any such committee, to
fill vacancies, and to discharge any such committee.
Section 5. Compensation. Members of the Executive Committee or of other
_________ ____________
committees of the Board of Directors shall receive such compensation for their
services as members of such committees as the Board of Directors shall, from
time to time, determine.
-------------------------------------------
ARTICLE IV
OFFICERS
Section 1. Number. The officers of the Corporation may include a
_________ ______
Chairman of the Board and shall include a President, Treasurer, Secretary
and such other officers as the Board of Directors may, from time to time,
deem appropriate. One person may hold the office and perform the duties of
more than one of said officers. The Corporation shall also have a Clerk,
who shall not be an officer.
Section 2. Election, Term of Office and Qualifications. The officers,
_________ ___________________________________________
and the Clerk, shall be elected annually by the Board of Directors. Each
officer shall hold office, and the Clerk shall remain Clerk of the Corporation,
until his successor shall have been elected and shall have qualified, or until
his death or until he shall have resigned or shall have been removed in the
manner hereinafter provided.
Section 3. Removal. Any officer, or the Clerk, may be removed by the Board
_________ _______
of Directors whenever, in its judgement, the best interests of the Corporation
will be served by such action.
Section 4. Resignations. Any officer, or the Clerk, may resign at any
_________ ____________
time by giving written notice to the Board of Directors or to the President
or to the Clerk. Such resignation shall take effect at the time specified
therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make if effective.
Section 5. Vacancies. A vacancy in any office, or in the position of
_________ _________
Clerk, because of death, resignation, removal or any other cause shall be
filled for the unexpired portion of the term in the manner prescribed in
these By-laws for election or appointment to such office or position of Clerk.
Section 6. The Chairman of the Board. The Chairman of the Board, if there
_________ _________________________
shall be one, shall be elected from among the Directors and shall, if present,
preside at all meetings of the shareholders and of the Board of Directors.
Except where, by law, the signature of the President is required, he shall
possess the same power as the President to sign all certificates, contracts
and other instruments of the Corporation which may be authorized by the
Board of Directors or by the Executive Committee. He shall, in general,
perform all duties incident to the office of the Chairman of the Board,
subject, however, to the direction and control of the Board of Directors
and of the Executive Committee, and such other duties as, from time to time,
may be assigned to him by the Board of Directors or by the Executive Committee.
Section 7. The President. The President shall be the chief executive
_________ _____________
and administrative officer of the Corporation and shall have general and
active supervision and direction over the day-to-day business and affairs of
the Corporation and over its several officers, subject, however, to the
direction and control of the Board of Directors and of the Executive
Committee. At the request of the Chairman of the Board, or in case of his
absence or inability to act, the President may act in his place. He shall
sign or countersign all certificates, contracts and other instruments of the
Corporation as authorized by the Board of Directors, and shall perform all
such other duties as, from time to time, may be assigned to him by the Board of
Directors or the Executive Committee.
Section 8. The Vice-Presidents. Each Vice-President shall have such powers
_________ ___________________
and perform such duties as the Board of Directors may, from time to time,
prescribe. At the request of the President, or in case of his absence or
inability to act, any Vice President may act in his place, and when so acting
shall have all the powers and be subject to all the restrictions of the
President.
Section 9. The Clerk. The Clerk, who shall be an inhabitant of the State
_________ _________
of Maine and shall keep his office therein, shall perform the functions
provided in the Maine Business Corporation Act, as it may be amended. The
Clerk shall keep, or cause to be kept in books provided for the purpose the
minutes of the meetings of the shareholders and of the Board of Directors;
shall see that all notices are duly given in accordance with the provisions
of these By-laws and as required by law; shall be the custodian of the records,
stock certificates records and of the seal of the corporation and see that
the seal is affixed to all documents the execution of which on behalf of the
Corporation under its seal is duly authorized in accordance with the provisions
of these By-laws.
Section 10. The Secretary. The Secretary shall perform such duties and have
__________ _____________
such powers as are required or permitted by law and as the Board of Directors
shall, from time to time, designate. In his absence, an Assistant Secretary
or a secretary pro tempore shall perform his duties, and the Assistant
Secretary shall have such other powers and duties as the Board of Directors
shall, from time to time, designate. In the absence of the Clerk, the
Secretary shall keep or cause to be kept, in books provided for the purpose,
the minutes of the meetings of the shareholders and of the Board of Directors
and shall perform such other functions as are provided to be performed by
the Clerk.
Section 11. The Treasurer. The Treasurer shall be the financial officer
__________ _____________
of the Corporation; shall have charge and custody of, and be responsible for,
all funds of the Corporation, and deposit all such funds in the name of the
Corporation in such banks, trust companies or other depositories as shall be
selected by the Board of Directors; shall receive, and give receipts for,
moneys due and payable to the Corporation from any source whatsoever; and in
general, shall perform all the duties incident to the office of Treasurer and
such other duties as, from time to time, may be assigned to him by the Board of
Directors or by the President.
Section 12. Salaries. The salaries of the Chairman of the Board, President,
__________ ________
Treasurer, Secretary, other officers and the Clerk, shall be fixed, from time
to time, by the Board of Directors. No officer or the Clerk shall be prevented
from receiving such salary by reason of the fact that he is also a Director
of the Corporation.
-------------------------------------------
ARTICLE V
CONTRACTS, CHECKS, NOTES, ETC.
Section 1. Execution of Contracts. All contracts and agreements authorized
_________ ______________________
by the Board of Directors, and all checks, drafts, notes, bonds, bills of
exchange and orders for the payment of money shall, unless otherwise directed
by the Board of Directors, or unless otherwise required by law, be signed by
any two of the following officers: The Chairman of the Board, President,
Vice-President, Treasurer, or Secretary. The Board of Directors may, however,
authorize any one of said officers to sign checks, drafts and orders for the
payment of money singly and without necessity of counter signature, and may
designate officers and employees of the Corporation other than those named
above, or different combinations of such officers and employees, who may, in
the name of the Corporation, execute checks, drafts, and orders for the payment
of money on its behalf.
Section 2. Loans. No loans, to the Corporation, shall be contracted on
_________ _____
behalf of the Corporation and no negotiable paper shall be signed in its name
unless authorized by resolution of the Board of Directors. When authorized by
the Board of Directors to do so, any officer or agent of the Corporation
thereunto authorized may effect loans and advances at any time for the
Corporation from any bank, trust company or other institution, or from any
firm, corporation or individual, and for such loans and advances may make,
execute and deliver promissory notes, bonds or other certificates or
evidences of indebtedness of the Corporation and, when authorized so to do,
may pledge, hypothecate or transfer any securities or advances. Such authority
may be general or confined to specific instances.
-------------------------------------------
ARTICLE VI
STOCK AND DIVIDENDS
Section 1. Certificate of Stock. Every stockholder shall be entitled
_________ ____________________
to have a certificate certifying the number of shares owned by him in the
Corporation. The certificates of stock shall be numbered and registered in
the order in which they are issued, indicating the name of the person owning
the shares therein represented with the number of shares and the date thereof.
The certificates shall exhibit the holder's name and number of shares
represented thereby. They shall be signed by the President and countersigned
by the Secretary and may be sealed with the seal of the Corporation or a
facsimile thereof. Such certificates shall be transferable on the stock books
of the Corporation in person or by attorney, but, except as hereinafter
provided in the case of loss, destruction or mutilation of certificates, no
transfer of stock shall be entered until the previous certificate, if any,
given for the same shall have been surrendered and cancelled.
A record of shareholders giving the names and addresses of all shareholders
and the number and class of the shares held by each, shall be kept at the
Corporation's registered office or principal place of business.
The person in whose name shares of stock stand on the books of the
Corporation shall be deemed the owner thereof for all purposes as regards
the Corporation.
The Board of Directors may make such rules and regulations as it may deem
expedient, not inconsistent with these By-laws, concerning the issue, transfer
and registration of certificates for shares of the capital stock of the
Corporation.
Section 2. Closing of Transfer Books or Fixing of Record Date. For the
_________ __________________________________________________
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled
to receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty (50) days. If the stock
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, such books
shall be closed for at least ten(10) days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may fix in
advance a date as the record date for any such determination of shareholders,
such date in any case to be not more than fifty (50) days and, in case of a
meeting of shareholders, not less than ten (10) days prior to the date on
which the particular action, requiring such determination of shareholders, is
to be taken.
Section 3. Lost, Destroyed or Mutilated Certificates. In case of loss,
_________ _________________________________________
destruction or mutilation of any certificate of stock, another may be issued
in its place upon proof of such loss, destruction or mutilation and upon
satisfying such other requirements as the Board of Directors shall specify,
including such provision for indemnity as may seem advisable to the Board of
Directors.
Section 4. Dividends. Subject to the provisions of the Articles of
_________ _________
Incorporation of the Corporation, and to the extent permitted by law, the
Board of Directors may declare dividends on the shares of stock of the
Corporation at such times and in such amounts as, in its opinion, are advisable
in view of the condition of the affairs of the Corporation.
-------------------------------------------
ARTICLE VII
SEAL
The Board of Directors shall provide a corporate seal which shall be in the
form of a circle and shall bear the name of the Corporation and words and
figures indicating the year and state in which the Corporation was
incorporated.
-------------------------------------------
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Corporation shall be fixed by the Board of Directors.
-------------------------------------------
ARTICLE IX
WAIVER OF NOTICE
Whenever any notice is required to be given to any shareholder or Director
by these By-laws or the Articles of Incorporation or the laws of the State
of Maine, a waiver of the notice in writing, signed by the person or persons
entitled to the notice, whether before or after the time stated therein,
shall be deemed equivalent to giving the notice.
-------------------------------------------
ARTICLE X
AMENDMENTS, ETC.
Section 1. Amendments. The By-laws of the Corporation may be amended at
_________ __________
any time by the affirmative vote of a majority of the entire Board, subject
to repeal, change or adoption of any contravening or inconsistent provision
only by vote of the holders of at least two-thirds (2/3) of all the shares
entitled to vote on the matter at a meeting expressly called for that purpose.
Section 2. Supplemental Resolutions. The Board of Directors by resolution,
_________ ________________________
adopted by (i) two-thirds of the Directors who are not affiliated with any
acquiring or offering person in the case of Sections 2 and 4 of Exhibit B to
the Articles of Incorporation or (ii) a majority of the Directors in all
other cases, may supplement, interpret, clarify or enforce the provisions of
the Articles of Incorporation and By-laws. Such resolution shall be binding
and may be relied upon for all purposes provided that the resolution is not
inconsistent with law, the Articles of Incorporation or these By-laws.
-------------------------------------------
ARTICLE XI
INDEMNIFICATION
Section 1. Indemnification of Officers and Directors. As provided in
_________ _________________________________________
Section 719 of the Maine Business Corporation Act, and without limiting any
rights provided therein, the Corporation may in all cases indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
Director, officer, Clerk, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a Director, officer, Clerk,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, against expenses, including attorney's fees, judgements,
fines and amounts paid in settlement actually and reasonable incurred by him
in connection with such action, suit or proceeding; provided that no
indemnification shall be provided for any person with respect to any matter
as to which he shall have been finally adjudicated in any action, suit or
proceeding not to have acted in good faith in the reasonable belief that his
action was in the best interests of the Corporation or, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful. The termination of any action, suit or proceeding by
judgement, order or conviction adverse to such person, or by settlement or plea
of nolo contendere or its equivalent, shall not of itself create a presumption
that such person did not act in good faith in the reasonable belief that his
action was in the best interest of the Corporation and with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
Section 2. Insurance. The Corporation shall purchase and maintain
_________ _________
insurance on behalf of any person who is or was a Director, Officer or
Clerk of the Corporation. Furthermore, the Corporation may, at its discretion,
purchase and maintain insurance on behalf of any person who is or was an
employee or agent of the Corporation, or is or was serving at the request of
the Corporation as a Director, Officer, Clerk, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the Corporation would
have the power to indemnify him against such liability under this section.
BETHEL BANCORP AND SUBSIDIARIES
Part II - Other Information
Item 1. Legal Proceedings
_________________
Not Applicable.
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
___________________________________________________
Not Applicable.
Item 5. Other Information
_________________
Not Applicable.
Item 6. Exhibits and Reports on Form 8 - K
__________________________________
(a) Exhibits
________
3.2 Restated by-laws of Bethel Bancorp as amended February 23, 1996
11 Statement regarding computation of per share.
27 Financial data schedule
(b) Reports on Form 8 - K
_____________________
On January 12, 1996, the Company filed a report on Form 8-K announcing
that it intends to merge the Company's two wholly-owned banking subsidiaries,
Bethel Savings Bank F.S.B. and Brunswick Federal Savings Bank, F.A. (the "Bank
Subsidiaries"). The proposed merger was approved by the Boards of Directors of
the two Bank Subsidiaries on January 3, 1996. The resulting bank, which will
be known as Northeast Bank, F.S.B. will have assets of over $200,000,000 and
will operate eight branches in four Maine counties. On March 19, 1996, the
Bank Subsidiaries received approval from the Office of Thrift Supervision
for the proposed merger.
Included in the report on Form 8-K filed on January 12, 1996, the Company
announced that it intends to change its name to Northeast Bancorp upon the
merger of its two Bank Subsidiaries and at the same time will change the
symbol under which its stock trades on the NASDAQ Stock Market to NEBC.
BETHEL BANCORP AND SUBSIDIARIES
Signatures
Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
BETHEL BANCORP
__________________
(Registrant)
/s/ James D. Delamater
____________________________
James D. Delamater
President and CEO
/s/ Richard Wyman
____________________________
Richard Wyman
Chief Financial Officer
Date: May 13, 1996
BETHEL BANCORP AND SUBSIDIARIES
Index to Exhibits
EXHIBIT NUMBER DESCRIPTION
11 Statement regarding computation of per share earnings
27 Finanacial Data Schedule
BETHEL BANCORP AND SUBSIDIARIES
Exhibit 11. Statement Regarding Computation of Per Share Earnings
Three Months Ended Three Months Ended
March 31, 1996 March 31, 1995*
____________________ ____________________
EQUIVALENT SHARES:
Average Shares Outstanding 1,203,764 1,094,800
Total Equivalent Shares 1,203,764 1,094,800
Total Primary Shares 1,313,669 1,222,957
Total Fully Diluted Shares 1,558,516 1,456,721
Net Income $ 301,805 $ 408,073
Less Preferred Stock Dividend 35,000 35,000
____________________ ____________________
Net Income after Preferred
Dividend $ 408,436 $ 373,073
==================== ====================
Primary Earnings Per Share $ 0.20 $ 0.31
Fully Diluted Earnings Per Share $ 0.19 $ 0.28
Nine Months Ended Nine Months Ended
March 31, 1996 March 31, 1995*
____________________ ____________________
EQUIVALENT SHARES:
Average Shares Outstanding 1,173,201 1,094,800
Total Equivalent Shares 1,173,201 1,094,800
Total Primary Shares 1,273,434 1,228,539
Total Fully Diluted Shares 1,527,953 1,462,303
Net Income $ 1,166,878 $ 1,220,898
Less Preferred Stock Dividend 104,999 104,999
____________________ ____________________
Net Income after Preferred
Dividend $ 795,074 $ 1,115,899
==================== ====================
Primary Earnings Per Share $ 0.83 $ 0.91
Fully Diluted Earnings Per Share $ 0.76 $ 0.84
*The 1995 earnings per share was restated due to the 100% common stock
dividend.
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