<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 2000
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or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from
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Commission file number. 0-15752
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CENTURY BANCORP, INC.
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(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
COMMONWEALTH OF MASSACHUSETTS 04-2498617
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer IdentificationNo.)
400 MYSTIC AVENUE, MEDFORD, MA 02155
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(Address of principal executive offices) (Zip Code)
</TABLE>
(781)391-4000
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 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.
X Yes No
--- ---
Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of September 30, 2000:
CLASS A COMMON STOCK, $1.00 PAR VALUE 3,416,000 SHARES
CLASS B COMMON STOCK, $1.00 PAR VALUE 2,144,350 SHARES
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.
Date: NOVEMBER 13, 2000 CENTURY BANCORP, Inc.
-------------------------------- -----------------------------------------
(Registrant)
/s/ Paul V. Cusick, Jr. /s/ Kenneth A. Samuelian
---------------------------------- ---------------------------------------
PAUL V. CUSICK, JR. KENNETH A. SAMUELIAN
VICE PRESIDENT AND TREASURER VICE PRESIDENT AND CONTROLLER,
(PRINCIPAL FINANCIAL OFFICER) CENTURY BANK & TRUST COMPANY
(CHIEF ACCOUNTING OFFICER)
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Century Bancorp, Inc.
Page
Index Number
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PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets:
September 30, 2000 and December 31, 1999. 3
Consolidated Statements of Income:
Three (3) Months Ended September 30,
2000 and 1999; and Nine (9) Months 4
Ended September 30, 2000 and 1999.
Consolidated Statements of Changes in Stockholders,
Equity: Nine (9) Months Ended September 30,
2000 and 1999. 5
Consolidated Statements of Cash Flows:
Nine (9) Months Ended September 30,
2000 and 1999. 6
Notes to Consolidated Financial
Statements 7 - 8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 9 - 12
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
MARKET RISK 13
PART II. OTHER INFORMATION
Item 1 through Item 6 13
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PART I - Item 1
<TABLE>
<CAPTION>
Century Bancorp, Inc. - Consolidated Balance Sheets (unaudited)
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(000's) Sept. 30, Dec. 31,
ASSETS 2000 1999
--------- ---------
<S> <C> <C>
Cash and due from banks $ 48,724 $ 34,512
Federal funds sold and interest-bearing deposits in other banks 7 32,016
--------- ---------
Total cash and cash equivalents 48,731 66,528
--------- ---------
Securities available-for-sale, amortized cost $269,310 and
$263,690, respectively 263,519 254,975
Securities held-to-maturity, market value $167,311 and
$146,603, respectively 171,048 152,599
Loans, net of unearned discount:
Commercial & industrial 88,620 77,166
Construction & land development 20,551 21,682
Commercial real estate 208,299 209,332
Industrial revenue bonds 137 190
Residential real estate 82,711 82,968
Consumer 9,948 11,678
Home equity 21,046 19,227
Overdrafts 664 482
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Total loans, net of unearned discount 431,976 422,725
Less: allowance for loan losses 5,206 7,646
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Net loans 426,770 415,079
Bank premises and equipment, net 8,855 9,473
Accrued interest receivable 8,111 6,624
Other assets 18,872 20,255
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Total assets $ 945,906 $ 925,533
========= =========
LIABILITIES
Deposits:
Demand deposits $ 174,098 $ 143,280
Savings and NOW deposits 169,444 152,089
Money market accounts 82,235 77,729
Time deposits 237,480 270,575
--------- ---------
Total deposits 663,257 643,673
Securities sold under agreements to repurchase 61,190 59,480
Federal Home Loan Bank (FHLB) borrowings and other borrowed funds 114,574 117,594
Other liabilities 11,314 15,740
Long term debt 28,750 28,750
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Total liabilities 879,085 865,237
STOCKHOLDERS' EQUITY
Class A common stock, $1.00 par value per share; authorized
10,000,000 shares; issued 3,754,600 and 3,721,850, respectively 3,755 3,722
Class B common stock, $1.00 par value per share; authorized
5,000,000 shares; issued 2,191,900 and 2,196,900, respectively 2,192 2,197
Additional paid-in capital 11,093 11,017
Retained earnings 58,687 52,188
Treasury stock, Class A, 338,600 and 200,600 shares, at cost, respectively (5,101) (3,122)
Treasury stock, Class B, 47,550 shares, each period, at cost, respectively (41) (41)
--------- ---------
70,585 65,961
Accumulated other comprehensive (loss) (3,764) (5,665)
--------- ---------
Total stockholders' equity 66,821 60,296
--------- ---------
Total liabilities and stockholders' equity $ 945,906 $ 925,533
========= =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements. 3 of 13
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<TABLE>
<CAPTION>
Century Bancorp, Inc. - Consolidated Statements of Income (unaudited)
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(000's except share data) Three months ended Sept. 30, Nine months ended Sept. 30,
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Interest income
Loans $ 9,968 $ 9,056 $ 29,223 $ 26,540
Securities held-to-maturity 2,684 2,264 7,706 6,957
Securities available-for-sale 4,071 3,341 11,994 9,678
Federal funds sold and interest-bearing deposits in other banks 220 21 424 240
---------- ---------- ---------- ----------
Total interest income 16,943 14,682 49,347 43,415
Interest expense
Savings and NOW deposits 1,035 908 3,071 2,894
Money market accounts 602 517 1,676 1,627
Time deposits 3,509 2,751 9,881 8,447
Securities sold under agreements to repurchase 715 472 2,137 1,289
FHLB borrowings, other borrowed funds and long term debt 2,097 1,880 6,287 4,964
---------- ---------- ---------- ----------
Total interest expense 7,958 6,528 23,052 19,221
---------- ---------- ---------- ----------
Net interest income 8,985 8,154 26,295 24,194
Provision for loan losses 375 225 1,050 675
---------- ---------- ---------- ----------
Net interest income after provision
for loan losses 8,610 7,929 25,245 23,519
Other operating income
Service charges on deposit accounts 573 469 1,559 1,349
Lockbox fees 759 447 1,763 1,355
Brokerage commissions 317 358 1,172 1,125
Other income 123 133 797 408
---------- ---------- ---------- ----------
Total other operating income 1,772 1,407 5,291 4,237
---------- ---------- ---------- ----------
Operating expenses
Salaries and employee benefits 4,018 3,589 11,832 10,659
Occupancy 405 378 1,182 1,142
Equipment 428 337 1,207 1,009
Other 1,698 1,309 4,619 4,152
---------- ---------- ---------- ----------
Total operating expenses 6,549 5,613 18,840 16,962
---------- ---------- ---------- ----------
Income before income taxes 3,833 3,723 11,696 10,794
Provision for income taxes 1,307 1,275 4,124 3,925
---------- ---------- ---------- ----------
Net income $ 2,526 $ 2,448 $ 7,572 $ 6,869
========== ========== ========== ==========
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Share data:
Weighted average number of shares outstanding, basic 5,560,350 5,804,096 5,611,714 5,814,641
Weighted average number of shares outstanding, diluted 5,560,350 5,827,577 5,612,371 5,843,089
Net income per share, basic $ 0.45 $ 0.42 $ 1.35 $ 1.18
Net income per share, diluted $ 0.45 $ 0.42 $ 1.35 $ 1.18
Cash dividends declared:
Class A common stock $ 0.0900 $ 0.0800 $ 0.2500 $ 0.2200
Class B common stock $ 0.0450 $ 0.0370 $ 0.1190 $ 0.0910
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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<TABLE>
<CAPTION>
Century Bancorp, Inc. - Consolidated Statement of Changes in Stockholders' Equity (unaudited)
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Accumulated
Class A Class B Additional Treasury Treasury Other Total
Common Common Paid-In Retained Stock Stock Comprehensive Stockholders'
Nine months ended September 30, Stock Stock Capital Earnings Class A Class B Income (Loss) Equity
--------------------------------------------------------------------------------------------
(000's)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1999
Balance at December 31, 1998 $ 3,673 $ 2,227 $ 10,965 $ 44,451 $ (136) $ (41) $ (88) $ 61,051
Net income -- -- -- 6,869 -- -- -- 6,869
Other comprehensive income, net of tax:
Increase in unrealized loss on
securities available-for-sale -- -- -- -- -- -- (3,948) (3,948)
--------
Comprehensive income 2,921
Conversion of Class B common stock to
Class A common stock, 29,420 shares 29 (29)
Stock options exercised, 17,533 shares 18 -- 48 -- -- -- -- 66
Treasury stock repurchase, 76,300 shares -- -- -- -- (1,390) -- -- (1,390)
Cash dividends, Class A common stock,
$.220 per share -- -- -- (805) -- -- -- (805)
Cash dividends, Class B common stock,
$.091 per share -- -- -- (196) -- -- -- (196)
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Balance at September 30, 1999 $ 3,720 $ 2,197 $ 11,013 $ 50,319 $ (1,526) $ (41) $ (4,036) $ 61,646
============================================================================================
2000
Balance at December 31, 1999 $ 3,722 $ 2,197 $ 11,017 $ 52,188 $ (3,122) $ (41) $ (5,665) $ 60,296
Net income -- -- -- 7,572 -- -- -- 7,572
Other comprehensive income, net of tax:
Decrease in unrealized loss on
securities available-for-sale -- -- -- -- -- -- 1,901 1,901
--------
Comprehensive income 9,473
Conversion of Class B common stock to
Class A common stock, 5,000 shares 5 (5) -- -- -- -- -- --
Stock options exercised, 27,750 shares 28 -- 76 -- -- -- -- 104
Treasury stock repurchases, 138,000 shares -- -- -- -- (1,979) -- -- (1,979)
Cash dividends, Class A common stock,
$.24 per share -- -- -- (836) -- -- -- (836)
Cash dividends, Class B common stock,
$.111 per share -- -- -- (237) -- -- -- (237)
--------------------------------------------------------------------------------------------
Balance at September 30, 2000 $ 3,755 $ 2,192 $ 11,093 $ 58,687 $ (5,101) $ (41) $ (3,764) $ 66,821
============================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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<TABLE>
<CAPTION>
Century Bancorp, Inc. - Consolidated Statements of Cash Flows (unaudited) 2000 1999
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For the nine months ended
September 30,
(000's)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7,572 $ 6,869
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 1,050 675
Decrease (increase) in deferred income taxes 406 (681)
Net depreciation and amortization 1,491 1,384
Increase in accrued interest receivable (1,487) (635)
Increase in other assets (735) (560)
Proceeds from sales of loans 56 145
Gain on sales of loans (1) (2)
Gain on sale of building (386) --
Increase in other liabilities 1,574 1,982
-------- --------
Net cash provided by operating activities 9,540 9,177
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of securities available-for-sale 10,428 56,736
Purchase of securities available-for-sale (28,934) (91,918)
Proceeds from maturities of securities held-to-maturity 9,076 52,649
Purchase of securities held-to-maturity (14,682) (47,730)
Decrease in payable for investments purchased (6,000) (17,992)
Net increase in loans (12,513) (12,191)
Proceeds from sale of building 1,342 --
Capital expenditures (1,380) (721)
-------- --------
Net cash used in investing activities (42,663) (61,167)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in time deposits (33,095) (27,499)
Net increase (decrease) in demand, savings, money market and NOW deposits 52,679 (33,464)
Net proceeds from the issuance of common stock 104 66
Treasury stock repurchases (1,979) (1,390)
Cash Dividends (1,073) (1,001)
Net increase (decrease) in securities sold under agreements to repurchase 1,710 (8,320)
Net (decrease) increase in FHLB borrowings and other borrowed funds (3,020) 95,949
-------- --------
Net cash provided by financing activities 15,326 24,341
-------- --------
Net decrease in cash and cash equivalents (17,797) (27,649)
Cash and cash equivalents at beginning of year 66,528 61,019
-------- --------
Cash and cash equivalents at end of period $ 48,731 $ 33,370
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 22,046 $ 18,999
Income taxes 2,998 2,567
Change in unrealized losses on securities available-for-sale, net of taxes $ 1,901 ($ 3,948)
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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<PAGE> 7
Century Bancorp Inc.
Notes to Consolidated Financial Statements
BASIS OF PRESENTATION In the opinion of management, the accompanying
unaudited interim consolidated financial statements
reflect all adjustments, consisting of normal
recurring adjustments, which are necessary to
present a fair statement of the results for the
interim period presented of Century Bancorp, Inc.
(the "Company") and its wholly owned subsidiary,
Century Bank and Trust Company (the "Bank"). The
results of operations for the interim period ended
September 30, 2000, are not necessarily indicative
of results for the entire year. It is suggested that
these statements be read in conjunction with the
consolidated financial statements and the notes
thereto included in the Company's Annual Report on
Form 10K for year ended December 31, 1999.
The financial statements have been prepared in
conformity with generally accepted accounting
principles and to general practices within the
banking industry. In preparing the financial
statements, management is required to make estimates
and assumptions that affect the reported amounts of
assets and liabilities as of the date of the balance
sheet and revenues and expenses for the period.
Actual results could differ from those estimates.
Material estimates that are susceptible to change in
the near-term relate to the allowance for losses on
loans. Management believes that the allowance for
losses on loans is adequate based on independent
appraisals and review of other factors associated
with the assets. While management uses available
information to recognize losses on loans, future
additions to the allowance for loans may be
necessary based on changes in economic conditions.
In addition, regulatory agencies periodically review
the Company's allowance for losses on loans. Such
agencies may require the Company to recognize
additions to the allowance for loans based on their
judgements about information available to them at
the time of their examination.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements include the
accounts of the Company and its wholly-owned
subsidiary, the Bank. The Company provides a full
range of banking services to consumer, business and
municipal customers in Massachusetts. As a bank
holding company, the Company is subject to the
regulation and supervision of the Federal Reserve
Board. The Bank, a state chartered financial
institution, is subject to supervision and
regulation by applicable state and federal banking
agencies, including the Federal Reserve Board, the
Federal Deposit Insurance Corporation (the "FDIC"),
and the Massachusetts Division of Banks.
The Bank is also subject to various requirements and
restrictions under federal and state law, including
requirements to maintain reserves against deposits,
restrictions on the types and amounts of loans that
may be granted and the interest that may be charged
thereon, and limitations on the types of investments
that may be made and the types of services that
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may be offered. Various consumer laws and
regulations also affect the operations of the Bank.
In addition to the impact of regulation, commercial
banks are affected significantly by the actions of
the Federal Reserve Board as it attempts to control
the money supply and credit availability in order to
influence the economy. All aspects of the Company's
business are highly competitive. The Company faces
aggressive competition from other lending
institutions and from numerous other providers of
financial services.
====================================================
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<PAGE> 9
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
OVERVIEW For the quarter ended and year-to-date ended September 30, 2000.
Earnings for the third quarter ended September 30, 2000 were $2.5
million, an increase of 3.2% when compared with the third quarter
1999 earnings of $2.4 million. Diluted earnings per share for the
third quarter 2000 were $0.45 versus $0.42 for the third quarter
of 1999. The increase was attributable to balance sheet growth.
For the nine months ending September 30, 2000, earnings were $7.6
million an increase of 10.2% when compared with the same period
last year earnings of $6.9 million. Diluted earnings per share for
the first nine months were $1.35 versus $1.18 for the first nine
months of 1999. The increase was attributable to balance sheet
growth and increases in fee income.
Total assets were $945.9 million at September 30, 2000 compared to
$925.5 million at December 31, 1999. The increase was attributable
to loan and investment growth as well as deposit and borrowings
growth.
During the third quarter of 2000, the Company announced plans to
continue its stock repurchase plan. Under the program, the Company
is authorized to repurchase up to 300,000 shares, or less than 9%,
of Century Bancorp Class A Common Stock. The program expires on
July 14, 2001.
FINANCIAL CONDITION
LOANS On September 30, 2000 total loans outstanding, net of unearned
discount, were $432.0 million, an increase of 2.2% from the total
on December 31, 1999. At September 30, 2000 commercial real estate
loans accounted for 48.2% and residential real estate loans
accounted for 24.0% of total loans. Construction loans decreased
to $20.6 million at September 30, 2000 from $21.7 million on
December 31, 1999.
The increase in loans was mainly attributable to corporate loans
which are comprised of commercial, construction and commercial
real estate lending. Originations of corporate loans reflect the
Company's increased interest for this type of loan as well as
higher real estate values. The increase in corporate loans was
partially offset by a decrease in consumer loans. Consumer loans
are comprised mainly of personal installment and personal credit
line loans.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses was 1.21% of total loans on
September 30, 2000 compared with 1.81% on December 31, 1999. Net
charge-offs for the nine month period ended September 30, 2000,
were $3.5 million, compared with $43 thousand for the same period
in 1999. The increase in net charge-offs primarily reflects the
deterioration with one borrower's credit quality whose total
relationship amounted to $4.1 million. Management reported this
credit in the third quarter 1999 10Q, placed it to nonaccrual
loans during the fourth quarter of 1999 and subsequently
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<PAGE> 10
Management's Discussion and Analysis of Financial Condition and
Results of Operation (con't.)
charged-off $3.5 million during the first quarter of 2000.
Management believes that the allowance for loan losses is
adequate. Management uses available information to provide for
losses but recognizes that changes in economic conditions may
result in additional losses and additional loss provisions. Also,
the allowance is reviewed in conjunction with regulatory
examinations. These reviews may require the Company to make
additional provisions to the allowance based on judgements made by
the regulators.
September 30, 2000 December 31, 1999
------------------ -----------------
(Dollars In Thousands)
Nonaccruing loans $148 $4,621
Loans past due 90 days
or more $ 0 $ 188
Nonaccruing loans as a
percentage of total loans .03% 1.09%
The decrease in nonaccruing loans was mainly attributable to the
previously mentioned $3.5 million charge-off that occurred during
the first quarter of 2000.
INVESTMENTS Management continually evaluates its investment alternatives in
order to properly manage the overall balance sheet mix. The timing
of purchases, sales and reinvestment, if any, will be based on
various factors including expectation of movements in market
interest rates, deposit flows and loan demand. Notwithstanding
these events, it is the intent of management to grow the earning
asset base through loan originations, loan purchases or investment
acquisitions while funding this growth through a mix of retail
deposits, FHLB advances, and retail repurchase agreements.
<TABLE>
<CAPTION>
September 30, 2000 December 31, 1999
------------------ -----------------
(Dollars In Thousands)
<S> <C> <C>
SECURITIES AVAILABLE-FOR-SALE
U.S. Government and
Agencies $217,933 $209,414
Other Bonds and Equity Securities 18,378 16,197
Mortgage-backed Securities 27,208 29,364
-------- --------
Total Securities Available-for Sale $263,519 $254,975
======== ========
</TABLE>
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<PAGE> 11
Management's Discussion and Analysis of Financial Condition and
Results of Operation (con't.)
SECURITIES HELD-TO-MATURITY
U.S. Government and
Agencies $ 85,978 $ 82,824
Other bonds 25 50
Mortgage-backed Securities 85,045 69,725
-------- -------
Total Securities Held-to-Maturity $171,048 $152,599
======== ========
SECURITIES AVAILABLE-FOR-SALE
The securities available-for-sale portfolio totaled $263.5 million
at September 30, 2000, an increase of 3.4% from December 31, 1999.
The portfolio is concentrated in United States Treasury and Agency
securities and has an estimated weighted average maturity of 3.2
years.
SECURITIES HELD-TO-MATURITY
The securities held-to-maturity portfolio totaled $171.0 million
on September 30, 2000, an increase of 12.1% from the total on
December 31, 1999. The portfolio is concentrated in United States
Treasury and Agency securities, including Mortgage Backed
Securities and has an estimated weighted average maturity of 4.0
years.
DEPOSITS AND BORROWED FUNDS
On September 30, 2000 deposits totaled $663.3 million,
representing a 3.0% increase in total deposits from December 31,
1999. Total deposits increased primarily as a result of core
deposit growth. Borrowed funds totaled $175.8 million compared to
$177.1 million at December 31, 1999.
RESULTS OF OPERATIONS
NET INTEREST INCOME
For the three month period ended September 30, 2000 net interest
income totaled $9.0 million, an increase of 10.2% from the
comparable period in 1999. For the nine month period ended
September 30, 2000 net interest income totaled $26.3 million, an
increase of 8.7% from the comparable period in 1999. Interest
income was affected positively by balance sheet growth. The net
yield on average earning assets on a fully taxable equivalent
basis decreased to 4.01 in the first nine months of 2000 from
4.09% during the same period in 1999. The decrease was mainly
attributable to leveraged balance sheet transactions and
competetive pressures on loan pricing.
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<PAGE> 12
Management's Discussion and Analysis of Financial Condition and
Results of Operation (con't.)
PROVISION FOR LOAN LOSSES
For the three month period ended September 30, 2000 the loan loss
provision totaled $375 thousand compared to $225 thousand for the
same period last year. For the nine month period ended September
30, 2000 the loan loss provision totaled $1,050 thousand compared
to $675 thousand for the same period in 1999.
Loan loss provision increased due to growth in the loan portfolio.
The Company's loan loss allowance as a percentage of total loans
outstanding has decreased from 1.63% at September 30, 1999 to
1.21% at September 30, 2000.
NON-INTEREST INCOME AND EXPENSE
Other operating income for the quarter ended September 30, 2000
was $1.8 million compared to $1.4 million for the third quarter of
1999. The increase was mainly attributable to an increase of $312
thousand in lockbox fees. For the nine month period ending
September 30, 1999 other operating income totaled $5.3 million
compared to $4.2 million for the same period in 1999.This was
mainly attributable to an increase of $408 thousand in lockbox
fees and the benefit from a pretax gain of $386 thousand
associated with the sale of Company owned real estate.
During the third quarter 2000, operating expenses increased by
$936 thousand to $6.5 million or 16.7% from the same quarter last
year. Most of the increase was in staff levels as well as merit
increases in salaries and employee benefits with the remainder in
all other expenses. For the nine month period ended September 30,
2000 operating expenses totaled $18.8 million compared to $17.0
million for the same period in 1999. Most of the increase was in
salaries and benefits with the remainder in all other expenses.
INCOME TAXES
For the third quarter of 2000, the Company's income taxes totaled
$1.3 million on pretax income of $3.8 million for an effective tax
rate of 34.1%. For last year's corresponding quarter, the
Company's income taxes totaled $1.3 million on pretax income of
$3.7 million for an effective rate of 34.2%. For the nine month
period ended September 30, 2000 income taxes totaled $4.1 million
on a pretax income of $11.7 million for an effective tax rate of
35.3% For last year's corresponding period income taxes totaled
$3.9 million on pretax income of $10.8 million for an effective
tax rate of 36.4%.
==================================================================
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<PAGE> 13
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The response is incorporated herein by reference from the
discussion under the subcaption "Market Risk and Asset Liability
Management" of the caption "MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" on pages 9 and
10 of the Annual Report which is incorporated herein by reference.
==================================================================
PART II - OTHER INFORMATION
Item 1 Legal proceedings - The Company is not engaged in any legal
proceedings of a material nature at the present time. From time to
time, the Company is party to routine legal proceedings within the
normal course of business. Such routine legal proceedings, in the
aggregate, are believed by management to be immaterial to the
Company's financial condition and results of operation.
Item 2 Change in securities - Not applicable
Item 3 Defaults upon senior securities - Not applicable
Item 4 Submission of matters to a vote - Not applicable
Item 5 Other information - Not applicable
Item 6 Exhibits and reports on form 8-K - Not applicable
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