FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1997
Commission file number: 33-66014
FNB Financial Corporation
(Exact name of registrant as specified in its charter)
Commonwealth of Pennsylvania 23-2466821
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 Lincoln Way West, McConnellsburg, PA 17233
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 717/485-3123
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 shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.
YES X NO
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at March 31, 1997
(Common stock, $0.63 par value) 400,000
FNB FINANCIAL CORPORATION
INDEX
Page
PART I - FINANCIAL INFORMATION
Condensed consolidated balance sheets -
March 31, 1997 and December 31, 1996 5
Condensed consolidated statements of income -
Three months ended March 31, 1997 and 1996 6
Condensed consolidated statements of cash flows -
Three months ended March 31, 1997 and 1996 7
Notes to condensed consolidated financial
statements 8-12
Table #1 - Schedule of held to maturity and
available for sale investment activity for the
period January 1, 1997 through March 31, 1997 10
Table #2 - Schedule of gross unrealized gains and
unrealized losses within the held to maturity and
available for sale investment portfolios by
investment type 11
Management's discussion and analysis of financial
condition and results of operations 12-15
PART II - OTHER INFORMATION 16
Signatures 18
PART I - FINANCIAL INFORMATION
FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<S> <C> <C>
March 31, December 31,
1997 1996
ASSETS: (unaudited) (audited*)
Cash and Due from banks $ 3,675,005 $ 2,473,315
Interest-bearing deposits with banks 312,152 327,276
Marketable Debt Securities
Held-to-maturity (Market value - 1997:
$4,182,999 and 1996: $4,567,903) 4,171,681 4,559,739
Available-for-sale 27,202,919 28,755,272
Marketable Equity Securities
Available for Sale 115,640 115,640
Federal Reserve, Atlantic Central Banker's Bank
and Federal Home Loan Bank Stock 389,600 383,700
Federal Funds Sold 3,254,000 1,239,000
Loans, net of unearned discount &
Allowance for loan losses 57,234,712 56,259,929
Bank buildings, equipment, furniture &
fixtures, net 3,078,109 3,107,960
Accrued interest receivable 720,743 675,180
Deferred income tax charges 60,703 6,548
Other real estate owned 310,917 318,992
Intangible Assets 196,943 210,588
Other assets 244,151 210,933
Total Assets $100,967,275 $98,644,072
========== ==========
LIABILITIES :
Deposits:
Demand deposits $ 8,777,310 $ 9,249,700
Savings deposits 28,105,391 26,674,628
Time certificates 52,044,952 50,957,962
Other time deposits 452,714 251,678
Total deposits $89,380,367 $87,133,968
Accrued interest payable & other liabilities 771,830 708,072
Deferred income taxes 0 0
Accrued dividends payable 68,000 100,000
Total Liabilities $90,220,197 $87,942,040
STOCKHOLDERS' EQUITY:
Capital stock, Common, par value $0.63;
6,000,000 shares authorized; 400,000
outstanding $ 252,000 $ 252,000
Additional paid-in capital 1,789,833 1,789,833
Retained earnings 8,778,355 8,628,183
Net unrealized gain/(loss) on Available-for-sale
securities, net of tax effects (73,110) 32,016
Total Stockholders' Equity $10,747,078 $10,702,032
Total Liabilities & Stockholders' Equity$100,967,275 $98,644,072
========== ==========
</TABLE>
*Condensed from audited financial statements.
The accompanying notes are an integral part of these condensed
financial statements.
FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 1997 and 1996
(UNAUDITED)
<TABLE>
<S> <C> <C>
1997
1996
Interest & Dividend Income
Interest & fees on loans $1,270,780
$1,175,854
Interest on investment securities:
U.S. Treasury Securities 11,069
15,743
Obligations of other U.S.
Government Agencies 369,951
309,234
Obligations of State & Political
Subdivisions 106,739
119,889
Interest on deposits with banks 3,887
11,018
Dividends on Equity Securities 7,441
6,179
Interest on federal funds sold 18,762
46,618
Total Interest & Dividend Income 1,788,629
1,684,535
Interest Expense
Interest on deposits 927,263
935,976
Interest on Other Borrowed Money 559
0
Total interest expense 927,822
935,976
Net interest income 860,807
748,559
Provision for loan losses 9,000
7,500
Net interest income after
Provision for loan losses 851,807
741,059
Other income
Service charges on deposit accounts 14,728
15,436
Other service charges, collection &
exchange charges, commissions
and fees 46,089
40,983
Other income 10,085
6,436
Net Securities gains/(losses) 0
(3,843)
Total other income 70,902
59,012
Other expenses 655,760
518,613
Income before income taxes 266,949
281,458
Applicable income taxes 48,807
52,555
Net income $218,142
$228,903
=======
=======
Earnings per share of Common Stock:
Net income per share $0.55
$0.57
Cash dividend declared per share $0.17
$0.17
Weighted average number of shares outstanding 400,000
400,000
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 1997 and 1996
<TABLE>
<S> <C> <C>
(UNAUDITED)
1997 1996
Cash flows from operating activities:
Net income $ 218,171 $ 228,903
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation & amortization 68,364 41,633
Provision for loan losses 9,000 7,500
Net (gain)/loss on sales of
investments 0
3,843
(Increase) decrease in accrued
interest receivable (45,561)
(28,299)
Increase (decrease) in accrued
interest payable and
other liabilities 63,758 25,759
Other (net) (33,076)
(94,730)
Net cash provided (used)by operating
activities 280,656 184,609
Cash flows from investing activities:
Net (increase) decrease in interest-
bearing deposits with banks 15,124
(493,081)
Purchases of Held-to-maturity
securities 0
(100,000)
Purchases of Available-for-sale
securities 0
(3,162,592)
Proceeds from sales of Available-for-
sale securities 0 0
Proceeds from maturities of Held-to-
maturity securities 388,058 17,063
Proceeds from maturities of Available-
for-sale securities 1,393,072 2,711,749
Purchases of marketable equity securities 0 0
Net (increase) decrease in loans (983,783)
2,040,599
Proceeds from sale of Other real
estate owned 8,075 33,750
Purchases of bank premises &
equipment (net) (25,011)
(413,293)
Proceeds from sale of equipment 0 0
Purchase of other bank stock (5,900)
(13,700)
Net cash provided (used) by investing
activities 789,635
620,495
Cash flows from financing activities:
Net increase (decrease) in deposits 2,246,399
2,217,056
Cash dividends paid (100,000)
(92,000)
Net cash provided (used) by financing
activities 2,146,399 2,125,056
Net increase (decrease) in cash & cash
equivalents 3,216,690
2,930,160
Cash & cash equivalents, beginning balance 3,712,315 3,110,762
Cash & cash equivalents, ending balance $6,929,005 $6,040,922
========= =========
Supplemental disclosure of cash flows information
Cash paid during the year for:
Interest $ 867,978 $ 738,681
Income taxes 0 69,888
Supplemental schedule of noncash investing &
financing activities
Unrealized loss on Available-for-sale
securities (110,772) 47,035
Deferred income tax on unrealized loss on
available-for-sale securities 37,662 15,992
Accrued dividends payable 68,000 68,000
Other real estate acquired in
settlement of loans 0 12,000
Loan advanced for sale of other real
estate owned 0 50,000
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
FNB FINANCIAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The financial information presented at and for the nine
months ended March 31, 1997 and March 31, 1996 is
unaudited. Information presented at December 31, 1996, is
condensed from audited year-end financial statements.
However, this unaudited information reflects all adjustments,
consisting solely of normal recurring adjustments, that are,
in the opinion of management, necessary for a fair
presentation of the financial position, results of operations
and cash flows for the interim period.
NOTE 2 - PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of
the corporation and its wholly-owned subsidiary, The First
National Bank of McConnellsburg. All significant
intercompany transactions and accounts have been
eliminated.
NOTE 3 - CASH FLOWS
For purposes of the statements of cash flows, the corporation
has defined cash and cash equivalents as those amounts
included in the balance sheet captions "cash and due from
banks" and "federal funds sold". As permitted by Statement
of Financial Accounting Standards No. 104, the corporation
has elected to present the net increase or decrease in
deposits in banks, loans and time deposits in the statement
of cash flows.
NOTE 4 - FEDERAL INCOME TAXES
For financial reporting purposes the provision for loan
losses charged to operating expense is based on management's
judgement, whereas for federal income tax purposes, the
amount allowable under present tax law is deducted.
Additionally, certain expenses are charged to operating
expense in the period the liability is incurred for financial
reporting purposes, whereas for federal income tax purposes,
these expenses are deducted when paid. As a result of these
timing differences, deferred taxes were computed after
reducing pre-tax accounting income for nontaxable municipal
and loan income.
NOTE 5 - INVESTMENTS
The activity within the held to maturity and available for
sale portfolios for the period January 1, 1997, through
March 31, 1997, is summarized in Table #1 on page 10. No
sales were conducted from securities contained within the held
to maturity portfolio.
The amortized cost and estimated market values of investments
by investment type and classification as available for sale or
held to maturity along with each portfolio's gross unrealized
gain or gross unrealized loss are contained in Table #2 on
page 11.
Management has purchased for the portfolio mortgage-backed
securities. The large portion of these securities have a
variable rate coupon and all have scheduled principal
payments. During periods of rising interest rates, payments
from variable rate mortgage-backed securities may accelerate
as prepayments of underlying mortgages occur as home-owners
refinance to a fixed rate while during periods of declining
interest rates, prepayments on high fixed rate mortgage-backed
securities may accelerate as home owners refinance to lower
rate mortgages. These prepayments cause yields on mortgage-
backed securities to fluctuate as larger payments of principal
necessitate the acceleration of premium amortization or
discount accretion. Due to the low dollar amount of mortgage-
backed securities in relation to the total portfolio,
management feels that interest rate risk and prepayment risks
associated with mortgage-backed securities will not have a
material impact on the financial condition of the Bank.
In regard to Collateralized Mortgage Obligations (CMOs), the
Bank presently has none of these types of investments in its
portfolio.
NOTE 6 - ALLOWANCE FOR LOAN LOSSES AND NONACCRUAL LOANS
Activity in the allowance for loan losses is summarized as
follows:
<TABLE>
<S> <C> <C>
1997 1996
Allowance for loan losses beginning of the year $405,612
$405,000
Loans charged-off during the year:
Real estate mortgages 253
19,216
Installment loans 1,100
5,469
Commercial & all other 3,313
3,766
Total charge-offs 4,666
28,451
Recoveries of loans previously charged-off:
Real estate mortgages 0
0
Installment loans 2,197
1,719
Commercial & all other 341
291
Total recoveries 2,538
2,010
Net loans charged-off (recovered) 2,128
26,441
Provision for loan losses charged to operations 9,000
7,500
Allowance for loan losses, March 31 $412,484
$386,059
======== ========
</TABLE>
The following table shows the principal balance of nonaccrual loans
as of March 31, 1997:
<TABLE>
<S> <C>
Nonaccrual loans $ 920,113.00
==========
Interest income that would have been
accrued at original contract rates $ 21,021.12
Amount recognized as interest income 10,754.96
Foregone revenue $ 10,266.16
=========
</TABLE>
NOTE 7 - COMMITMENTS
Fort Loudon Office Renovation/Expansion
As of March 31, 1997, the Board of Directors has committed
to an expansion project for the Fort Loudon Branch Office.
This project was approved by the Board on August 28, 1996.
This renovation/expansion will increase the size of the
office, improve customer access and add a one lane drive up
facility. Management estimates total expenditures related to
this project including additional equipment purchases will be
approximately $200,000.
NOTE 8 - OTHER COMMITMENTS
In the normal course of business, the bank makes various
commitments and incurs certain contingent liabilities which
are not reflected in the accompanying financial statements.
These commitments include various guarantees and commitments
to extend credit. The bank does not anticipate any losses
as a result of these transactions.
TABLE #1
SCHEDULE OF HELD TO MATURITY AND AVAILABLE FOR SALE
DEBT SECURITY PORTFOLIOS
TRANSACTION SUMMARY
FOR THE PERIOD JANUARY 1, 1997 THROUGH MARCH 31, 1997
<TABLE>
<S> <C> <C> <C>
HELD TO AVAILABLE TOTAL
MATURITY FOR SALE INVESTMENT
PORTFOLIO PORTFOLIO PORTFOLIO
BEGINNING BALANCE 1/1/97 $4,559,739 $28,737,883 $33,297,622
PURCHASES 0 0 0
NET LOSSES 0 0 0
MATURITIES/CALLS PAYDOWNS/
PREMIUM AMORTIZATION/DISCOUNT
ACCRETION 388,058 1,393,072 1,781,130
ENDING BALANCE 3/31/97 $4,171,681 $27,344,811 $31,516,492
========= ========== ==========
</TABLE>
TABLE #2
SCHEDULE OF UNREALIZED GAINS AND UNREALIZED LOSSES
WITHIN THE HELD TO MATURITY AND AVAILABLE FOR SALE
INVESTMENT PORTFOLIOS BY INVESTMENT TYPE
MARCH 31, 1997
<TABLE>
<S> <C> <C> <C> <C> <C>
<C> <C> <C>
HELD TO HELD TO HELD TO HELD TO
AVAILABLE AVAILABLE AVAILABLE AVAILABLE
MATURITY MATURITY MATURITY MATURITY FOR
SALE FOR SALE FOR SALE FOR SALE
BOOK MARKET UNREALIZED UNREALIZED
BOOK MARKET UNREALIZED UNREALIZED
SECURITY PORTFOLIO VALUE VALUE GAIN LOSS
VALUE VALUE GAIN LOSS
U.S. GOVERNMENT TREASURIES 0 0 0 0
550,771 551,285 514 0
U.S. GOVERNMENT TREASURIES 0 0 0 0
198,764 197,910 0 (854)
U.S. GOVERNMENT AGENCIES 0 0 0 0
897,585 903,276 5,691 0
U.S. GOVERNMENT AGENCIES 0 0 0 0
13,895,407 13,647,242 0 (248,165)
SBA GUARANTEED LOAN POOL
CERTIFICATES 925,405 930,351 4,946 0
3,471,611 3,542,967 71,356 0
SBA GUARANTEED LOAN POOL
CERTIFICATES 658,492 655,789 0 (2,704)
182,038 178,850 0 (3,188)
MORTGAGE-BACKED SECURITIES 0 0 0 0
1,028,891 1,051,663 22,773 0
MORTGAGE-BACKED SECURITIES 0 0 0 0
582,716 578,017 0 (4,699)
SECURITIES ISSUED BY STATES
& POLITICAL SUBDIVISIONS IN
THE U.S. 1,629,866 1,641,727 11,860 0
3,369,624 3,414,716 45,092 0
SECURITIES ISSUED BY STATES
& POLITICAL SUBDIVISIONS IN
THE U.S. 957,917 955,134 0 (2,783)
3,167,403 3,136,992 0 (30,411)
MARKETABLE EQUITY SECURITIES 0 0 0 0
84,520 115,640 31,120 0
FEDERAL RESERVE BANK STOCK,
ATLANTIC CENTRAL BANKERS BANK
STOCK AND FEDERAL HOME LOAN
BANK STOCK 0 0 0 0
389,600 389,600 0 0
GRAND TOTALS 4,171,681 4,183,000 16,806 (5,487)
27,818,930 27,708,158 176,546 (287,319)
========= ========= ====== ======
========== ========== ======= =======
</TABLE>
CLASSIFICATION OF HELD TO MATURITY AND AVAILABLE FOR SALE
SECURITIES
Due to the implementation of FAS 115, management has segregated
securities as Held to Maturity, Available for Sale or Trading
securities. At the implementation of FAS 115 on January 1, 1994,
management determined that no securities were Trading securities;
that tax-free municipal with maturity dates less than the year 2000
were classified as Held to maturity securities due to management's
intention to hold these securities for tax planning purposes; and
that all other securities were classified as Available for Sale
securities due to management's intention to hold these securities
for liquidity planning purposes. Purchases of tax-free municipals
with maturities of 5 years or less made following implementation of
FAS 115 are classified as Held to Maturity securities with all
other purchase Available for Sale; however, management may decide
on a case-by-case basis that a security may be either classified as
Held to Maturity or Available for Sale depending upon the reasons
for purchase. Held to Maturity classifications are typically used
for securities purchased specifically for interest rate management
or tax-planning purposes while Available for Sale classifications
are typically used for liquidity planning purposes.
FNB FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Net income for the first three months of 1997 was $218,142 compared
to $228,903 for the same period in 1996. This represents a
decrease of $10,761 or 4.70%. Net income on an adjusted per share
basis for the first three months of 1997 was $0.55 per share, a
decrease of $0.02 from the $0.57 per share for the three months
ended March 31, 1996.
Total interest and dividend income for the first three months of
1997 was $1,788,629 compared to $1,684,535 for the three months
ended March 31, 1996, representing an increase of $104,094. This
increase is a result of both a general increase in the balance of
earning assets and higher yields on investments in the Bank's
security portfolio and on adjustable rate loans which have repriced
to higher interest rates. Since December 31, 1996, net loans have
increased $974,783 or 1.73% while the book value of investment debt
securities and federal funds sold have increased $233,869. This
increase in loans, the Bank's highest yielding interest-earning
asset, and subsequent increases in the lower yielding assets of
investments and federal funds sold have increased the Bank's
interest income for the first three months of 1997.
During the last quarter of 1996 and the first quarter of 1997,
interest rates on loans, adjustable rate investments and federal
funds sold increased. At the end of the first quarter of 1997,
short term interest rates were increased by the Federal Reserve
Board. During the first quarter, some investment securities with
call features were called by the issuer resulting in the loss of
higher interest earning assets. At the same time, management was
increasing deposit rates but not at the same pace as that of
earning assets. Combined with the aforementioned increase in loans
and increase in investments and federal funds sold, net interest
income has increased and the bank's net interest margin and
interest spread during the first quarter of 1997 have accordingly
increased. Management anticipates the continued increase in
interest rates on loans and investments and the retention of
deposit rates at lower levels will result in the average interest
rates earned on assets to increase during the next few earning
periods. Although maturing liabilities will be repriced to
slightly higher interest rates, the anticipated larger interest
rate increases in earning assets is anticipated to create a slight
increase in interest spreads and net interest margins.
Interest expense for the three months ended March 31, 1997, was
$927,822, a decrease of $8,154 from the $935,976 incurred for the
same period in 1996. This decrease is due to a reduction in the
cost of time certificates of deposit is a result of the maturity of
a large certificate of deposit to a local school district which was
earning a premium interest rate for a one year period and the March
1, 1996 reduction of savings account interest rates by 25 basis
points. Total deposit volume increased $2,246,399 or 2.58% since
December 31, 1996. Savings accounts increased $1,430,763 or 5.36%
due to the Bank acquiring a money market account of over $1,000,000
for a local school district on July 1,1996 for the next two year
period and the acquisition of a temporary savings account with a
balance in excess of $900,000. Non-interest bearing demand deposit
accounts decreased $472,390 or 5.11% from December 31, 1996. Time
certificates increased $1,086,990, while other time deposits,
comprised of Christmas and vacation club accounts, increased
$201,036. The increase in the lower cost interest-bearing savings
deposits and club accounts contributed to the decrease in interest
expense when compared to 1996.
The tax-adjusted net interest margin has increased 27 basis points
to 4.08% for the first three months of 1997 from that of the first
three months of 1996 which was 3.81%. This increase occurred due
to an increase in the yields on earning assets as a result of
rising interest rates on adjustable rate loans and investments
while the cost of interest-bearing liabilities decreased. The
tax-equivalent yield on earning assets for the first three months
of
1997 increased .06% to 8.15% from 8.09% for the same period in 1996
while the cost of interest-bearing liabilities decreased .26% to
4.75% from 5.01% for the same period in 1996. Management
anticipates to continue to concentrate on the improvement of net
interest margin throughout the year. Recent increases in interest
rates on adjustable rate loans and securities while higher cost
time deposits have matured and been repriced to lower yielding
deposits have resulted in an increase in the net interest margin.
Total noninterest income for the first three months of 1997
increased $11,890 due to the net security loss for the same period
in 1996 of $3,843 and a $5,100 increase in other service charges
and collection fees. Operating expenses for the period ended March
31, 1997, were $655,760 a $137,147 increase from the operating
expenses incurred for the same period in 1996 of $518,613. This
increase is due to 1) increases in employee wages and benefits of
$54,266 as a result of an increase in wage rates, an increase in
the number of employees due to the opening of Hancock Community
Bank which increased personnel by six employees and an increase in
employee participation in the Company's retirement plan; 2) an
increase in the cost of fixed assets in the amount of $33,587 due
to increased utility bills, depreciation, insurance and taxes as a
result of the completed expansion/renovation of the main office
facility in September 1996 and the opening of Hancock Community
Bank in November 1996 for which depreciation began in the third
quarter of 1996; 3) a $16,050 increase in advertising/promotional
expenses due to an increased emphasis on television advertising and
promotion of the Hancock Community Bank office; and 4) a $3,000
increase in supplies expense, a $6,000 increase in Directors fees
due to increased meeting attendance and a $3,000 increase in FDIC
assessment expenses due to FICO Bond insurance assessments.
Management anticipates the cost of fixed assets to be higher in
1997 than in 1996 due to the main office renovation/expansion
depreciation, operating costs of Hancock Community Bank and
depreciation costs associated with the Fort Loudon branch office
renovation scheduled to begin in mid spring. These costs will
result in a decrease in net income during the next several
quarters; however, due to the strength of the Bank in regard to its
capital position, the Board and management felt it wise to plan for
the future growth of the organization by expanding its main office
facilities, seizing the opportunity to expand into a new market
area which had been targeted by the Board for several years and
expanding the size of the Fort Loudon office to better serve
customers in that area.
The company's income tax provision for the first three months of
1997 was $48,807 as compared to $52,555 for the first three months
of 1996. This decrease in the tax provision in the amount of
$3,748 is due to an increase in operating expenses as highlighted
above which has reduced taxable income.
The Company continues to operate with a marginal tax rate of 34%,
during the first quarter of 1997. The effective income tax rate
for the first three months of 1997 was 18.28%, a decrease of .39%
from the effective tax rate for the first three months of 1996 of
18.67%. This decrease in the effective tax rate is primarily due
to the increase of operating expenses decreasing taxable income.
Total assets as of March 31, 1997, were $100,967,275, an increase
of $2,323,203 over the period ending December 31, 1996,
representing an increase of 2.36%. Funding this increase in total
assets was an increase in total deposits of $2,246,399 or 2.58%.
The increase in deposits was the result of increased balances in
time deposits of $1,086,990 and in savings account balances of
$1,430,763. Net loans as of March 31, 1997, were $57,234,712
compared to $56,259,929 as of December 31, 1996. The allowance for
loan losses at the end of the three months was $412,484 compared to
$405,607 at year end 1996 and is considered adequate, in
management's judgement, to absorb possible losses on existing
loans. The provision for loan losses for the first three months of
1997 was $9,000 compared to $7,500 for the same period in 1996.
Total deposits were $89,380,367 as of March 31, 1997, compared to
$87,133,968 on December 31, 1996. This represents an increase of
$2,246,399 or 2.58% which reflects the activity as discussed
previously.
Total equity as of March 31, 1997, was $10,747,078, 10.64% of total
assets as compared to $10,702,032, 10.85% of total assets as of
December 31, 1996. This slight increase in equity reflects
earnings for the first quarter of 1997 offset by a decrease in
market value of marketable securities which has resulted in a net
unrealized loss on available for sale securities, net of tax
effects of ($73,110), a $105,126 decrease from the December 31,
1996 net unrealized gain on available for sale securities, net of
tax effects of $32,016.
The Corporation has risk-based capital ratios exceeding regulatory
requirements. Risk-based capital guidelines require a minimum
ratio of 8.0%. At March 31, 1997, the risk-based capital ratio of
the Corporation was 19.83% while at December 31, 1996, the
risk-based capital ratio was 20.05%. The following table presents
the
risk-based capital ratios for the Corporation:
<TABLE>
<S> <C> <C>
March 31, Regulatory
1997 Minimum
Leverage Ratio 10.51% 3.00%
Risk-based capital ratios:
Tier I (core capital) 19.09% 4.00%
Total Capital
(Tier I and Tier II Capital) 19.83% 8.00%
</TABLE>
PART II - OTHER INFORMATION
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
None
Item 3 - Defaults Upon Senior Securities
Not Applicable
Item 4 - Submission of Matters to a Vote of Security Holders
None
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
a. Exhibits - None
b. Reports on Form 8-K - None
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.
/s/John C. Duffey
(John C. Duffey, President
and Director of the Company and
President/CEO of the Bank)
(Duly Authorized Officer)
Date May 6, 1997 /s/Daniel E. Waltz
(Daniel E. Waltz, Treasurer
and Director of the Company and
Senior Vice President/CFO of
the Bank)
(Principal Financial &
Accounting Officer)
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