<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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: O-17177
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BSB Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 16-1327860
----------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer Number)
incorporation or organization)
58-68 Exchange Street, Binghamton, New York 13902
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (607) 779-2492
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n/a
---------------------------------------
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 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. As of September 30, 1996:
5,602,425 shares of common stock, $0.01 par value.
<PAGE>
INDEX
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PART I. FINANCIAL INFORMATION PAGE
- ------------------------------ ----
Item 1: Financial Statements
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Consolidated Statements of Condition
September 30, 1996 and December 31, 1995............ 1
Consolidated Statements of Income Three Months
and Nine Months Ended September 30,
1996 and September 30, 1995......................... 2
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1996
and September 30, 1995.............................. 3
Consolidated Statements of Changes in
Shareholders' Equity Nine Months Ended
September 30, 1996 and September 30, 1995........... 4
Notes to Consolidated Financial Statements.......... 5
Item 2: Management's Discussion and Analysis of
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Financial Condition and Results of Operations....... 6-15
PART II. OTHER INFORMATION
- ---------------------------
Item 1-6............................................ 16
Signature Page...................................... 17
<PAGE>
Item 1
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
BSB BANCORP, INC. (Dollars in Thousands)
CONSOLIDATED STATEMENTS OF CONDITION
- --------------------------------------------------------------------------------
September 30, December 31,
1996 1995
- ------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 32,741 $ 43,826
Federal funds sold 0 0
- ------------------------------------------------------------------------------
Total cash and cash equivalents 32,741 43,826
Investment securities (market value $106,702
and $103,611) 106,029 103,114
Mortgage-backed securities (market value
$143,329 and $144,272) 143,122 143,978
Mortgages held for sale 3,178 1,280
Loans:
Commercial 519,345 455,444
Consumer 216,539 200,546
Real estate 264,284 271,026
- ------------------------------------------------------------------------------
Total loans 1,000,168 927,016
Less: Unearned discounts 532 605
Allowance for possible credit losses 16,160 14,065
- ------------------------------------------------------------------------------
Net loans 983,476 912,346
Bank premises and equipment 8,371 7,288
Accrued interest receivable 8,915 8,486
Other real estate 1,640 2,468
Intangible assets 2,262 2,483
Other assets 16,596 13,767
- ------------------------------------------------------------------------------
$1,306,330 $1,239,036
==============================================================================
LIABILITIES & SHAREHOLDERS' EQUITY
Due to depositors $1,100,266 $1,006,465
Borrowings 81,999 98,949
Other liabilities 19,159 16,848
Commitments
Shareholders' Equity:
Preferred Stock, par value $0.01 per share;
authorized 2,500,000 shares; none issued 0 0
Common Stock, par value $0.01 per share;
authorized 30,000,000 shares; 7,337,553
shares and 7,270,925 shares issued 73 73
Additional paid-in capital 27,577 26,861
Undivided profits 108,696 101,519
Unrealized appreciation (depreciation)
in securities available for sale, net (1,683) 169
Treasury stock, at cost: 1,735,128 and
1,027,528 shares (29,757) (11,848)
- ------------------------------------------------------------------------------
Total Shareholders' Equity 104,906 116,774
- ------------------------------------------------------------------------------
$1,306,330 $1,239,036
==============================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
Item 1 - continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
BSB BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME
- ----------------------------------------------------------------------------------------------------------
(Dollars in Thousands-Except Per Share Data) Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $ 22,481 $ 21,573 $ 65,231 $ 62,120
Interest on mortgage-backed securities 2,618 2,394 7,480 7,284
Interest on mortgages held for sale 88 91 218 164
Interest on federal funds sold and
interest-bearing deposits 0 0 0 30
Interest and dividends on investment securities:
U.S. Government obligations 983 742 2,944 2,214
State and municipal obligations 194 105 582 317
Other debt obligations 174 284 631 1,075
Corporate stocks 326 224 1,101 572
- ----------------------------------------------------------------------------------------------------------
Total interest income 26,864 25,413 78,187 73,776
- ----------------------------------------------------------------------------------------------------------
Interest expense:
Interest on savings deposits 1,033 1,101 3,068 3,347
Interest on time accounts 8,123 7,085 23,748 20,880
Interest on money market deposit accounts 2,775 2,680 7,812 7,827
Interest on NOW accounts 203 197 598 573
Interest on borrowed funds 1,192 1,671 3,529 4,810
- ----------------------------------------------------------------------------------------------------------
Total interest expense 13,326 12,734 38,755 37,437
- ----------------------------------------------------------------------------------------------------------
Net interest income 13,538 12,679 39,432 36,339
Provision for credit losses 3,048 1,431 7,726 4,096
- ----------------------------------------------------------------------------------------------------------
Net interest income after provision for credit losses 10,490 11,248 31,706 32,243
Gains (losses) on sale of securities 951 104 1,300 (88)
Gains (losses) on sale of loans 20 (189) (55) (127)
Non-interest income:
Service charges on deposit accounts 562 409 1,462 1,155
Credit card fees 893 583 2,680 1,547
Mortgage servicing fees 254 227 761 689
Fees and commissions-brokerage services 191 85 552 241
Trust fees 138 126 428 373
Other charges, commissions, and fees 182 170 531 511
- ----------------------------------------------------------------------------------------------------------
Total non-interest income 2,220 1,600 6,414 4,516
- ----------------------------------------------------------------------------------------------------------
Non-interest expense:
Salaries, pensions, and other employee benefits 3,133 3,016 9,523 9,138
Building occupancy 558 575 1,727 1,751
Computer service fees 218 215 649 626
Services 643 400 1,893 1,436
FDIC insurance 230 (42) 270 1,035
Goodwill 74 74 221 221
Interchange fees 691 420 1,841 1,074
Other real estate 130 802 274 1,063
Other expenses 1,569 1,282 4,758 4,221
- ----------------------------------------------------------------------------------------------------------
Total non-interest expense 7,246 6,742 21,156 20,565
- ----------------------------------------------------------------------------------------------------------
Income before income taxes 6,435 6,021 18,209 15,979
Provision for income taxes 2,585 2,394 7,177 6,405
- ----------------------------------------------------------------------------------------------------------
NET INCOME $ 3,850 $ 3,627 $ 11,032 $ 9,574
==========================================================================================================
Earnings per share: $ 0.67 $ 0.57 $ 1.84 $ 1.50
==========================================================================================================
Average shares outstanding 5,743,125 6,319,521 6,010,372 6,398,049
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
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BSB BANCORP, INC. (Dollars in Thousands)
CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended September 30,
- ------------------------------------------------------------------------------------------------------------------------------------
Operating activities: 1996 1995
------ ------
<S> <C> <C>
Net income $ 11,032 $ 9,574
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses 7,726 4,296
Realized losses (gains) on available for sale investment securities (68) 36
Realized gains on available for sale mortgage-backed securities (1,232) (149)
Losses on sale of loans 55 127
Gain on sales and disposition of premises and equipment (6) (3)
Depreciation and amortization 1,005 1,025
Net accretion of premiums and discounts on investment securities (46) (55)
Net amortization of premiums and discounts on mortgage-backed securities 93 113
Net accretion of premiums and discounts on loans (73) (593)
Sales of loans originated for sale 20,144 26,517
Net increase in loans originated for sale (22,191) (28,387)
Decrease in other assets and liabilities 694 3,246
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 17,133 15,747
- -----------------------------------------------------------------------------------------------------------------------------------
Investing activities:
Proceeds from calls of held to maturity investment securities 14,589 450
Principal collected on held to maturity investment securities 911 109
Purchases of held to maturity investment securities (23,644) (1,151)
Proceeds from calls of held to maturity mortgage-backed securities 0 50
Principal collected on held to maturity mortgage-backed securities 2,700 1,738
Proceeds from sales of available for sale investment securities 62,339 37,635
Purchases of available for sale investment securities (63,413) (42,563)
Principal collected on available for sale investment securities 5,204 61
Proceeds from sales of available for sale mortgage-backed securities 51,674 21,396
Purchases of available for sale mortgage-backed securities (54,958) (13,181)
Principal collected on available for sale mortgage-backed securities 16,339 14,165
Net increase in longer-term loans (122,624) (93,554)
Proceeds from sales of loans 28,211 8,212
Other (1,861) (573)
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities (84,533) (67,206)
- -----------------------------------------------------------------------------------------------------------------------------------
Financing activities:
Net increase (decrease) in demand deposits, NOW accounts, savings
accounts, and money market deposit accounts 24,802 (12,097)
Net increase in time deposits 69,511 19,242
Net increase (decrease) in short-term borrowings (16,650) 42,450
Repayment of long-term borrowings (300) (160)
Proceeds from exercise of stock options 716 295
Purchases of treasury stock (17,909) (3,151)
Dividends paid (3,855) (2,814)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 56,315 43,765
- ------------------------------------------------------------------------------------------------------------------------------------
Decrease in cash and cash equivalents (11,085) (7,694)
Cash and cash equivalents at beginning of year 43,826 38,699
- -----------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 32,741 $ 31,005
===================================================================================================================================
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest credited on deposits and paid on other borrowings $ 38,181 $ 37,321
- -----------------------------------------------------------------------------------------------------------------------------------
Income taxes $ 8,626 $ 6,729
- -----------------------------------------------------------------------------------------------------------------------------------
Non-cash investing activity:
Securitization of mortgage loans and transfers to/or sales of other real estate $ 14,896 $ (245)
- ------------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) in securities $ (3,177) $ 7,744
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
Item 1 - continued
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
BSB BANCORP, INC. (Dollars in Thousands)
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
- -----------------------------------------------------------------------------------------------------------------------------------
Unrealized
Depreciation
Nine Months Ended Additional In Marketable
September 30, Common Paid-In Undivided Treasury Equity
1995 Stock Capital Profits Stock Securities Total
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $ 48 $ 26,436 $ 92,986 $ (7,054) $ (5,546) $106,870
Decrease in unrealized
depreciation in available
for sale securities 4,512 4,512
Net income 9,574 9,574
Stock options exercised 295 295
Cash dividend paid on
common
stock ($0.45 per share) (2,814) (2,814)
Treasury stock purchased (3,151) (3,151)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 1995 $ 48 $ 26,731 $ 99,746 $ (10,205) $ (1,034) $115,286
===================================================================================================================================
1996
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1995 $ 73 $ 26,861 $101,519 $ (11,848) $ 169 $116,774
Increase in unrealized
depreciation in available
for sale securities (1,852) (1,852)
Net income 11,032 11,032
Stock options exercised 716 716
Cash dividend paid on
common stock ($0.64 per share) (3,855) (3,855)
Treasury stock purchased (17,909) (17,909)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 1996 $ 73 $27,577 $108,696 $ (29,757) $ (1,683) $104,906
===================================================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Item 1 - continued
BSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996
(1) In the opinion of management, the interim financial statements reflect all
adjustments which are of a normal recurring nature necessary to a fair
statement of the results for the interim periods presented. The December
31, 1995 data in the Consolidated Statements of Condition is derived from
the consolidated financial statements included in the Company's 1995 Annual
Report to Shareholders. The accompanying unaudited interim consolidated
financial statements and related notes should be read in conjunction with
the consolidated financial statements and related notes included in the
Company's 1995 Annual Report to Shareholders.
(2) Outstanding stock options were excluded from the weighted average number of
shares because their dilutive effect is not material. Fully diluted
earnings per common share have not been presented because it is not
significantly different from primary earnings per share.
(3) The Company adopted FAS 122, "Accounting for Mortgage Servicing Rights" on
January 1, 1996. The impact for the first nine months of 1996 was not
material.
(4) Certain data for prior years has been reclassified to conform to the current
year's presentation. These reclassifications had no effect on net income.
Reserves of $2.5 million which provided for possible losses on outstanding
letters of credit, had been reclassified from the allowance for possible
credit losses to a liability.
5
<PAGE>
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
- -------
BSB Bancorp, Inc. (the "Company"), the bank holding company for BSB Bank &
Trust Company (the "Bank"), earned net income of $3,850,000, or $0.67 per share,
for the quarter ended September 30, 1996, as compared to net income of
$3,627,000, or $0.57 per share, for the quarter ended September 30, 1995. All
references to the Company herein are intended to include the activities of the
Bank, the Company's wholly owned subsidiary. Net income for the first nine
months of 1996 totaled $11,032,000, or $1.84 per share, compared to net income
of $9,574,000, or $1.50 per share for the first nine months of 1995.
On October 28, 1996, the Board of Directors announced a 13.6% increase in
the quarterly cash dividend. The new dividend is $0.25 and is payable on
December 10, 1996 to shareholders of record at the close of business on November
22, 1996.
Financial Condition
- -------------------
During the first nine months of 1996, the Bank originated $118.2 million
commercial loans, which contributed to a net increase in the commercial loan
portfolio from $455.4 million at December 31, 1995 to $519.3 million at
September 30, 1996. The interest rates on these loans are generally tied to the
Company's Prime Rate. Consumer loans increased from $200.5 million to $216.5
million, and during this period, the Bank originated $104.0 million in consumer
loans and sold $10.5 million in student loans. Real estate loans decreased from
$271.0 million at December 31, 1995 to $264.3 million at September 30, 1996.
During this period, the Bank originated $73.1 million of real estate loans and
securitized or sold $53.7 million. Total assets increased from $1,239.0 million
at December 31, 1995 to $1,306.3 million at September 30, 1996.
Total deposits increased from $1,006.5 million at December 31, 1995 to
$1,100.3 million at September 30, 1996. The Company's borrowings decreased from
$98.9 million at December 31, 1995 to $82.0 million at September 30, 1996, while
cash and cash equivalents decreased from $43.8 million to $32.7 million at
September 30, 1996.
Shareholders' equity decreased from $116.8 million to $104.9 million during
the first nine months of 1996. This decrease is a result of repurchases of
outstanding Company stock totaling $17.9 million, a $1.9 million increase in
unrealized depreciation in securities available for sale, as required under SFAS
No. 115, "Accounting For Certain Investments in Debt and Equity Securities", and
cash dividends paid to shareholders of $3.9 million. This was offset by Company
earnings of $11.0 million and $0.7 million of stock options exercised during the
period.
Results of Operations
- ---------------------
The operating results of the Company depend primarily on its net interest
income, which is the difference between interest income on interest-earning
assets, primarily loans and investments, and interest expense on interest-
bearing liabilities, primarily deposits and borrowings. The Company's operating
results also are affected by credit loss requirements, operating expenses, the
level of other income, including gains or losses on sale of loans and
securities, and other fees.
The following tables set forth, for and at the periods indicated,
information regarding (i) the Company's average balance sheet, (ii) the total
dollar amount of interest income from interest-earning assets and the resulting
average yields, (iii) the total dollar amount of interest expense on interest-
bearing liabilities and the resultant average cost, (iv) net interest income,
(v) interest rate margin and interest rate spread, (vi) net interest-earning
assets, (vii) net yield on interest-earning assets, and (viii) ratio of
interest-earning assets to interest-bearing liabilities. Average balances are
based on daily or month-end balances. No tax equivalent adjustments were made.
6
<PAGE>
Item 2 - continued
<TABLE>
<CAPTION>
Three Months Ended September 30,
1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
- ------------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Commercial loans $ 499,103 $11,741 9.41% $ 421,318 $10,826 10.28%
Consumer loans 211,594 5,069 9.58 203,090 4,750 9.36
Real estate loans 261,760 5,672 8.67 294,640 5,997 8.14
Investment securities 109,837 1,677 6.11 83,479 1,355 6.49
Mortgage-backed securities 135,758 2,618 7.71 130,188 2,394 7.36
Mortgages held for sale 3,934 87 8.85 3,348 91 10.87
Other interest-earning assets 0 0 0.00 0 0 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets 1,221,986 $26,864 8.79% 1,136,063 $25,413 8.95%
- ------------------------------------------------------------------------------------------------------------------------------------
Non-interest-earning assets 70,574 61,576
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $1,292,560 $1,197,639
====================================================================================================================================
Interest-bearing liabilities:
Deposits and mortgage escrow funds $1,080,647 $12,134 4.49% $ 958,449 $11,063 4.62%
Borrowings 84,792 1,192 5.62 108,026 1,671 6.19
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 1,165,439 13,326 4.57 1,066,475 12,734 4.78
- ------------------------------------------------------------------------------------------------------------------------------------
Non-interest-bearing liabilities 17,576 13,771
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,183,015 1,080,246
- ------------------------------------------------------------------------------------------------------------------------------------
Shareholders' equity 109,545 117,393
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $1,292,560 $1,197,639
====================================================================================================================================
Net interest income/net interest rate spread $13,538 4.22% $12,679 4.17%
====================================================================================================================================
Net earnings assets/net interest rate margin $56,547 4.43% $69,588 4.46%
====================================================================================================================================
Ratio of interest-earning assets to
interest-bearing liabilities 1.05X 1.07X
====================================================================================================================================
<CAPTION>
Nine Months Ended September 30,
1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
- ------------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Commercial loans $ 474,086 $34,167 9.61% $ 401,839 $30,529 10.13%
Consumer loans 203,523 14,469 9.48 201,179 13,692 9.07
Real estate loans 265,697 16,595 8.33 288,629 17,899 8.27
Investment securities 113,691 5,258 6.17 88,731 4,178 6.28
Mortgage-backed securities 132,870 7,480 7.51 138,813 7,284 7.00
Mortgages held for sale 2,841 218 10.23 2,023 164 10.81
Other interest-earning assets 0 0 0.00 589 30 6.79
- -----------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets 1,192,708 $78,187 8.74% 1,121,803 $73,776 8.77%
- -----------------------------------------------------------------------------------------------------------------------------------
Non-interest-earning assets 70,865 59,364
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets $1,263,573 $1,181,167
===================================================================================================================================
Interest-bearing liabilities:
Deposits and mortgage escrow funds $1,047,375 $35,226 4.48% $ 948,403 $32,627 4.59%
Borrowings 83,826 3,529 5.61 103,410 4,810 6.20
- -----------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 1,131,201 38,755 4.57 1,051,813 37,437 4.75
- -----------------------------------------------------------------------------------------------------------------------------------
Non-interest-bearing liabilities 18,177 13,896
- -----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,149,378 1,065,709
- -----------------------------------------------------------------------------------------------------------------------------------
Shareholders' equity 114,195 115,458
- -----------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $1,263,573 $1,181,167
===================================================================================================================================
Net interest income/net interest rate spread $39,432 4.17% $36,339 4.02%
===================================================================================================================================
Net earnings assets/net interest rate margin $61,507 4.41% $69,990 4.32%
===================================================================================================================================
Ratio of interest-earning assets to
interest-bearing liabilities 1.05X 1.07X
===================================================================================================================================
</TABLE>
7
<PAGE>
Item 2 - continued
The following table presents changes in interest income and interest
expense attributable to (i) changes in volume (change in volume multiplied by
old rate), and (ii) changes in rate (change in rate multiplied by old volume).
The net change attributable to the combined impact of volume and rate has been
allocated proportionately to the change due to volume and the change due to
rate.
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
1996 Compared to 1995 1996 Compared to 1995
Increase (Decrease) Increase (Decrease)
Volume Rate Net Volume Rate Net
- -----------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest income on interest-
earning assets:
Commercial loans $ 5,654 $(4,739) $ 915 $ 6,081 $(2,443) $3,638
Consumer loans 204 115 319 159 618 777
Real estate loans (2,178) 1,853 (325) (1,512) 208 (1,304)
Investment securities 807 (485) 322 1,200 (120) 1,080
Mortgage-backed securities 106 118 224 (452) 648 196
Other interest-earning assets 64 (68) (4) 53 (29) 24
- ----------------------------------------------------------------------------------------------------------------------------------
Total $ 4,657 $(3,206) $1,451 $ 5,529 $(1,118) $4,411
==================================================================================================================================
Interest expense on interest-
bearing liabilities:
Deposits $ 2,919 $(1,848) $1,071 $ 3,810 $(1,211) $2,599
Borrowings (335) (144) (479) (853) (428) (1,281)
- ----------------------------------------------------------------------------------------------------------------------------------
2,584 (1,992) 592 2,957 (1,639) 1,318
- ----------------------------------------------------------------------------------------------------------------------------------
Total $ 2,073 $(1,214) $ 859 $ 2,572 $ 521 $3,093
==================================================================================================================================
</TABLE>
Interest Income
- ---------------
The Company's interest income on earning assets increased from $25.4 million
for the three months ended September 30, 1995 to $26.9 million for the three
months ended September 30, 1996, and from $73.8 million to $78.2 million for the
nine months ended September 30, 1995 and 1996, respectively. This increase in
interest income was the result of an increase in the average balance of earning
assets from $1,136.1 million to $1,222.0 for the three months ended September
30, 1995 and 1996, respectively, and from $1,121.8 million to $1,192.7 million
for the nine months ended September 30, 1995 and September 30, 1996,
respectively. The decrease in the yield on earning assets from 8.95% to 8.79%
for the quarter ended September 30, 1995 to the quarter ended September 30,
1996, and from 8.77% for the nine months ended September 30, 1995 to 8.74% for
the nine months ended September 30, 1996, mitigated the effect on interest
income derived from the increase in the net earning asset balance. Offsetting
the decrease in the rates, the commercial loan average balance increased $77.8
million from the third quarter of 1995 to $499.1 million for the third quarter
of 1996, and from an average balance of $401.8 million for the first nine months
of 1995 to $474.1 million for the first nine months of 1996, an increase of
$72.2 million. The yield on commercial loans declined from 10.28% for the third
quarter of 1995 to 9.41% for the third quarter of 1996, and from 10.13% for the
first nine months of 1995 to 9.61% for the first nine months of 1996. These
yield decreases were due to steady decreases in the Bank's Prime Rate from 9.00%
in the first quarter of 1995 to its current level of 8.25% which was set in the
first quarter of 1996. The volume changes for the commercial loan portfolio was
the largest contributor to the increase in interest income. Despite high levels
of competition in the local lending market for indirect auto and mobile homes,
the Company continues to emphasize origination of these loans, which add to the
Company's market base for potential business. Despite such competition and
coupled with the continued softness in the local economy, the average balance of
consumer loans increased 4.2% to $211.6 million for the three-month period ended
September 30, 1996, and increased $2.3 million to $203.5 million for the nine-
month period ended September 30, 1996. Consumer loans had increases in yields
which contributed to increases in interest income of $0.3 million for the three
months ended September 30, 1996 compared to the three months ended September 30,
1995, and $0.8 million for the nine months ended September 30, 1996 as compared
to September 30, 1995. Average balances of real estate loans decreased $32.9
million to
8
<PAGE>
Item 2 - continued
$261.8 million for the quarter ended September 30, 1996 compared to quarter
ended September 30, 1995. This period reflected an increase in yield from 8.14%
to 8.67%, but the reduced average balances resulted in a decline of $0.3 million
in interest income from real estate loans to $5.7 million. The nine-month period
also showed similar changes with an average balance decrease from $288.6 million
to $265.7 million and a yield increase from 8.27% to 8.33% resulting in reduced
interest income of $1.3 million from real estate loans in this period. The
average balance of mortgage-backed securities increased from $130.2 million to
$135.8 million for the three months ended September 30, 1995 to the three months
ended September 30, 1996, with an increase in yield from 7.36% to 7.71%. The
average balance decreased from $138.8 million to $132.9 million for the nine
months ended September 30, 1995 to the nine months ended September 30, 1996.
This decrease in average balance was offset by an increase in yield from 7.00%
to 7.51% for the nine month time frame. Interest income from mortgage-backed
securities varied minimally with the affect of these offsetting changes. The
average balance of investment securities increased from $83.5 million to $109.8
million, and the yield decreased from 6.49% to 6.11% from the three months ended
September 30, 1995 to the three months ended September 30, 1996, and increased
from $88.7 million to $113.7 million, and the yield decreased from 6.28% to
6.17% from the nine months ended September 30, 1995 to the nine months ended
September 30, 1996. The amortization of mortgage-backed securities during these
periods were mainly used to purchase bonds.
Interest Expense
- ----------------
Total interest expense increased by $0.6 million for the quarter ended
September 30, 1996 as compared to the same period in 1995. The average balance
of all interest-bearing liabilities increased from $1,066.5 million for the
quarter ended September 30, 1995 to $1,165.4 million for the quarter ended
September 30, 1996. This increase accompanies a decrease in the average rate
paid on all interest-bearing liabilities from 4.78% to 4.57% during the
respective period. One component of the change in interest-bearing liabilities
is the average balance of borrowings decreasing from $108.0 million for the
three months ended September 30, 1995 to $84.8 million for the three months
ended September 30, 1996. The borrowing balance augments deposits to fund the
loan growth principally in the commercial loan area when needed. This decrease
was coupled with a decrease in the rate paid on borrowings from 6.19% to 5.62%
during this period to reflect lower borrowing costs from $1.7 million for the
three months ended September 30, 1995 to $1.2 million for the same period in
1996. A similar decrease in average balances and rates paid on borrowings
lowered borrowing expense by $1.3 million for the nine-month period ended
September 30, 1995 to September 30, 1996. The average balance of deposits
increased from $958.4 million during the three months ended September 30, 1995
to $1,080.6 million during the same period in 1996. The increase in the average
balance of deposits, despite the 13 basis point decrease in the average rate
paid on such funds, resulted in an increase in interest paid on deposits from
$11.1 million for the third quarter of 1995 to $12.1 million for the third
quarter of 1996. Total interest expense increased from $37.4 million to $38.8
million for the nine-month periods ended September 30, 1995 and 1996,
respectively. This increase was due primarily to the elevation in the Bank's
average balance in deposits; the average increased from $948.4 million to
$1,047.4 million. The average cost of deposits decreased from 4.59% to 4.48%.
Provision for Credit Losses
- ---------------------------
The provision for credit losses increased from $1.4 million to $3.0 million
for the quarters ended September 30, 1995 and September 30, 1996, respectively.
The allowance for possible credit losses increased to $16.2 million as of
September 30, 1996, compared to $14.1 million as of December 31, 1995. See "Non-
performing Loans and Other Real Estate Owned". Management considers this level
of reserves adequate to cover potential credit losses.
Non-interest Income
- -------------------
Non-interest income increased from $1.6 million to $2.2 million for the
three months ended September 30, 1995 to September 30, 1996, respectively. For
the nine-month periods ended September 30, 1995 and September 30, 1996, non-
interest income increased from $4.5 million to $6.4 million, respectively. This
growth was primarily the result of growth in the credit card and
9
<PAGE>
Item 2 - continued
consumer base which provided a 73.2% increase in these fees to $2.7 million for
the nine months ended September 30, 1996. This growth was largely attributable
to one significant retail customer. As of November 1, 1996, this customer will
be dealing with another financial institution which will lower the Bank's non-
interest income in future months. These credit card transactions will also
correspondingly lower non-interest expense by a similar amount. The competition
for large retail customers and the ability to service at a lower cost was the
active force for the change to another servicer. Also contributing to the
increase in non-interest income was a favorable financial market environment for
security and annuity sales which prompted a rise in brokerage fee income from
$0.2 million to $0.6 million for the nine-month periods ended September 30, 1995
and 1996, respectively. These factors have been consistent in providing
increases in the non-interest income for both the three-month and nine-month
periods ended September 30, 1996 compared with the same periods in 1995.
Gain On Sale of Securities
- --------------------------
Gain on sale of securities was $1.0 million for the third quarter of 1996
compared to $0.1 million for the same quarter of 1995. This was the result of
sales of mortgage-backed securities made to reduce the interest rate sensitivity
of the Bank's balance sheet. For the nine months ended September 30, 1996, gain
on sale of investments was $1.3 million compared to a loss of $0.1 million for
the nine months ended September 30, 1995.
Gain On Sale of Loans
- ---------------------
The practice of the Bank has been to sell or securitize long-term, fixed-
rate residential mortgage loans. As a result of this practice, the Bank
securitized or sold $53.7 million of mortgage loans for the first nine months of
1996 as compared to having sold $32.5 million for the first nine months of 1995.
Of the $57.6 million of residential mortgage loans originated in the first nine
months of 1996, only $13.2 million were adjustable-rate loans. This led to
increased sales of fixed-rate loans in 1996 as compared to 1995. For the first
nine months of 1995, $31.8 million of the total residential mortgage loans of
$69.5 million that were originated were adjustable-rate loans. Sales of
residential mortgages in the first nine months of 1995 resulted in a loss of
$189,000 for the quarter ended September 30, 1995 and $127,000 for the first
nine months of 1995. During the third quarter of 1996, net gains of $20,000 were
achieved. This was the combined activity of losses on residential mortgage sales
of $30,000 and gains from recording originating mortgage servicing rights of
$45,000 for the quarter. The balance was adjustments on mortgages available for
sale that were marked to market and previously recorded mortgage servicing
gains. For the nine months ended September 30, 1996, net losses of $55,000 were
recorded. Losses on sales of mortgages amounted to $230,000, mark to market of
loans available for sale accounted for an additional loss of $121,000, and
adjustments of previously recorded mortgage servicing gains of $57,000.
Offsetting these losses was a gain on sale of student loans of 1996 of $227,000
and the recording of originated mortgage servicing rights of $126,000.
Non-interest Expense
- --------------------
Non-interest expense increased from $6.7 million to $7.2 million for the
quarters ended September 30, 1995 and 1996, respectively, and from $20.6 million
to $21.2 million for the nine months ended September 30, 1995 and 1996,
respectively. The major changes in components of non-interest expense included
growth in the credit card merchant transaction base which resulted in additional
fee income, but also additional non-interest expense associated with servicing
the increased transactions and accounts. These interchange fee expenses
increased from $0.4 million for the third quarter of 1995 to $0.7 million for
the same quarter of 1996. The first nine months of 1996 showed $1.8 million of
expense compared to $1.1 million for the same period of 1995. Adding to these
expenses are increased expenses paid to service the consumer-based transactions.
Offsetting the increase in credit card expenses was a decline in FDIC insurance
expense. The third quarter of 1995 reflected a refund of $581,000 from the FDIC
for previous insurance payments due to the recapitalization of the Bank
Insurance Fund (BIF). In the third quarter of 1996, the recently enacted
Deposit Insurance Funds Act called for a special assessment to capitalize the
Savings Association Insurance Fund (SAIF). This assessment was based on
deposits insured by the SAIF held by the Bank and amounted to $169,000.
Services for the
10
<PAGE>
Item 2 - continued
quarter ended September 30, 1995 were $400,000 increasing to $643,000 for the
same quarter of 1996. Services were $1.4 million compared to $1.9 million for
the nine months ended September 30, 1995 and 1996, respectively. This was due to
the increased credit card activity and expense associated with it.
Income Taxes
- ------------
The income tax expense was $2.4 million and $2.6 million for the quarters ended
September 30, 1995 and September 30, 1996, respectively. These taxes increased
from $6.4 million to $7.2 million for the nine-month periods ended September 30,
1995 and September 30, 1996, respectively.
Non-Performing Loans and Other Real Estate Owned ("ORE")
- --------------------------------------------------------
When a borrower fails to make a scheduled payment on a loan, the Company
attempts to cure the deficiency by contacting the borrower and seeking payment.
Contacts are generally made within five business days after the expiration of
the payment grace period, set forth in the loan contract. In most cases,
deficiencies are cured promptly. If a delinquency extends beyond 60 days, the
loan and payment histories are reviewed and legal proceedings may be instituted
to remedy the default. While the Company generally prefers to work with
borrowers to resolve such problems, the Company does initiate foreclosure
proceedings or pursues other legal collection procedures, as necessary, to
minimize any potential loss. Once the Company takes legal title to the
property, it is classified as other real estate owned ("ORE") on the Statement
of Condition.
Loans are placed on a non-accrual status when, in the judgment of
management, the probability of collection of interest is deemed to be
insufficient to warrant further accrual. Such loans include potential problem
loans where known information about possible credit problems of borrowers has
caused management to have serious doubts as to the ability of such borrowers to
comply with the loan repayment terms. When a loan is placed on non-accrual
status, previously accrued but unpaid interest is deducted from interest income.
The Company does not accrue interest on loans greater than 90 days or more past
due for the payment of interest unless the value of the collateral and active
collection efforts ensure full recovery.
The following table sets forth information regarding non-performing loans
which are 90 days or more overdue and other real estate owned held by the
Company at the dates indicated.
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
- ------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C>
Commercial loans:
Non-accrual loans $ 9,867 $ 8,032
Consumer loans:
Accruing loans 90 days overdue 204 96
Residential real estate loans:
Non-accrual loans 1,468 1,920
Commercial real estate loans:
Non-accrual loans 2,951 2,764
- ------------------------------------------------------------------------------
Total non-performing loans and
accruing loans 90 days overdue $14,490 $12,812
Total non-performing loans to total gross loans 1.45% 1.38%
Total real estate acquired in settlement of
loans at net realizable value $ 1,640 $ 2,468
Total non-performing loans and real estate
acquired in settlement
of loans at net realizable value to total assets 1.23% 1.23%
----
</TABLE>
Total non-performing loans and other real estate owned increased to $16.1
million, or 1.23% of total assets at September 30, 1996, compared to $15.3
million, or 1.23% of total assets at December 31, 1995.
At December 31, 1995, 49 non-performing residential real estate loans
totaled $1.9 million. At September 30, 1996, non-performing residential real
estate loans totaled $1.5 million and included 35 loans.
11
<PAGE>
Item 2 - continued
At December 31, 1995, non-performing commercial real estate loans totaled
$2.8 million, and included 6 loans ranging in size from $62,000 to $1.6 million.
At September 30, 1996, non-performing commercial real estate loans remained
stable at $3.0 million and consisted of 8 loans ranging in size from $28,000 to
$1.6 million.
Non-performing commercial loans at December 31, 1995 totaled $8.0 million
and included 35 individual loans ranging in size from $5,500 to $2.2 million. At
September 30, 1996, non-performing commercial loans increased to $9.9 million
and consisted of 50 individual loans ranging in size from $1,000 to $1.7
million.
The Company's policy is to charge-off all consumer loans before they become
non-accrual. At December 31, 1995, the Company had $96,000 of loans greater than
90 days past due on which it was accruing interest, as compared to $204,000 at
September 30, 1996. As of each date, the only such loans were consumer loans.
At September 30, 1996, the recorded investment in loans for which
impairment has been recognized in accordance with SFAS No. 114 totaled
$6,275,381 with a corresponding valuation allowance of $3,136,784. For the nine
months ended September 30, 1996, the average recorded investment in impaired
loans was approximately $9,604,624. The Bank recognized on a cash basis $2,728
of interest on impaired loans for the quarter ended September 30, 1996.
At December 31, 1995, ORE, which is defined to include property acquired by
foreclosure or by deed in lieu of foreclosure, totaled $2.5 million, which
consisted of 7 single-family residential properties with a book value totaling
$400,000 and 12 local commercial real estate properties with a book value of
$2.1 million. At September 30, 1996, ORE totaled $1.6 million, which consisted
of 7 single-family residential properties totaling $400,000 and 10 local
commercial real estate properties with a book value of $1.2 million. The largest
reason for the decrease was the sale of a commercial real estate property which
was carried in ORE at $0.7 million on December 31, 1995.
Management reviews the adequacy of the allowance for possible credit losses
at least quarterly, applying projected loss ratios to the risk-ratings of loans
both individually and by category. The projected loss ratios incorporate such
factors as recent loss experience, current economic conditions and trends,
trends in past due and non-accrual amounts, the risk of characteristics of
various categories and concentrations of loans, transfer risks and other
pertinent factors.
12
<PAGE>
Item 2 - continued
The following table summarizes activity in the Company's allowance for
possible credit losses during the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
- ------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Average gross loans
outstanding $988,753 $933,141 $958,930 $906,004
==============================================================================
Allowance at beginning of
period $ 15,025 $ 13,083 $ 14,065 $ 13,354
==============================================================================
Charge-offs:
Commercial loans 1,007 579 4,095 2,289
Consumer loans 436 237 1,147 760
Residential real
estate loans 50 0 79 57
Commercial real
estate loans 697 614 1,148 1,640
- ------------------------------------------------------------------------------
Total loan charge-offs 2,190 1,430 6,469 4,746
Recoveries:
Commercial loans 108 61 301 266
Consumer loans 151 106 384 256
Residential real
estate loans 0 0 0 16
Commercial real
estate loans 18 14 153 23
- ------------------------------------------------------------------------------
Total recoveries 277 181 838 561
- ------------------------------------------------------------------------------
Net charge-offs 1,913 1,249 5,631 4,185
- ------------------------------------------------------------------------------
Provision for credit losses
charged to operating
expenses 3,048 1,431 7,726 4,096
- ------------------------------------------------------------------------------
Allowance at end of period $ 16,160 $ 13,265 $ 16,160 $ 13,265
==============================================================================
Ratio of net charge-offs
to:
Average gross loans
outstanding
(annualized) 0.77% 0.54% 0.78% 0.62%
Ratio of allowance to:
Non-performing loans 111.53% 102.99% 111.53% 102.99%
Period-end loans
outstanding 1.62% 1.40% 1.62% 1.40%
</TABLE>
During the third quarter of 1996, the Bank charged-off $2.2 million of loans
compared to $1.4 million for the third quarter of 1995. Charge-offs on
commercial loans increased from $0.6 million for the quarter ended September 30,
1995 to $1.0 million for the three months ended September 30, 1996. Charge-offs
for the first nine months of 1996 were $6.5 million compared to $4.7 million for
1995. During the quarter, a $445,000 commercial loan and a $249,000 commercial
loan to two different customers were charged off. These were the most
significant charge-offs and accounted for approximately 69% of the charge-offs
for the quarter ended September 30, 1996. Of the remaining $313,000, 7 other
loans were either charged-off or partially written down. These two loans and
significant writedowns in prior quarters of 1996 on an office building that
amounted to $0.9 million accounted for the larger increase from nine months
ended September 30, 1995 to the same period in 1996. No further write-downs
were necessary on the office building loan in the third quarter. Even with
these charge-offs, the Bank was still able to increase the ratio of allowance to
period-end loans outstanding from 1.40% at September 30, 1995 to 1.62% at
September 30, 1996. For the same periods, the ratio of allowance to non-
performing loans increased from 102.99% to 111.53%. This allowance increase
from $13.3 million at September 30, 1995 to $16.2 million at September 30, 1996
is consistent with the growth in the loan portfolio and management's' discerning
review of and action toward non-performing loans. Management considers the
current level of loan loss reserves to be adequate to cover potential credit
losses.
13
<PAGE>
Item 2 - continued
Sources of Funds
- ----------------
Funding for the Company's assets is derived primarily from demand and time
deposits and long and short-term borrowings. The average balance of all
interest-bearing liabilities increased from $1,051.8 million for the nine-month
period ended September 30, 1995 to $1,131.2 million for the same period ended
September 30, 1996, an increase of $79.4 million. Of the $79.4 million increase
in this period, $58.6 million is attributable to increases in municipal
deposits. In order to provide the Company with alternative funding sources, the
Board of Directors authorized the Company to use up to $50.0 million of brokered
deposits. The Company continued utilizing this authorization in the nine months
of 1996 and held brokered deposits of $40.0 million at September 30, 1995 and
1996.
Liquidity and Capital Resources
- -------------------------------
A fundamental objective of the Company is to effectively manage its
liquidity. Prudent liquidity management insures that the Company can meet all of
its contractual obligations, meet its customers' loan demands, fund all of its
operations and minimize the effects of interest rate fluctuation on earnings.
The Company's primary sources of funds have consisted of deposits,
amortization and prepayments of outstanding loans, bond maturities, and such
other sources as long and short-term borrowings including institutional
repurchase agreements, sales of investment securities, loans, and mortgage-
backed securities. At September 30, 1996, the total of approved loan commitments
amounted to $66.2 million. Scheduled maturities of borrowings during the next
twelve months are $82.0 million. Savings certificates, which are scheduled to
mature during the next twelve months, totalled $415.1 million. Management
expects that a substantial portion of these maturing certificates will remain on
deposit with the Company. At September 30, 1996, the Company had no long-term
borrowings.
At September 30, 1996, the Company's Tier I leverage ratio, as defined in
guidelines, was 8.01%, which exceeds the current requirements for the Company.
On September 30, 1996, the Company's total capital-to-risk-weighted assets
ratio, calculated under the Federal Reserve Board's risk-based capital
requirements, was 11.19%.
The Company's book value per common share increased from $18.70 at December
31, 1995 to $18.73 at September 30, 1996.
Impact of Inflation and Changing Prices
- ---------------------------------------
The financial statements and related data presented herein have been
prepared in accordance with generally accepted accounting principles which
require the measurement of financial position and operating results in terms of
historical dollars, without considering changes in the relative purchasing power
of money over time due to inflation.
Unlike most industrial companies, virtually all of the assets and
liabilities of a financial institution are monetary in nature. As a result,
interest rates have a more significant impact on a financial institution's
performance than the effects of general levels of inflation. Interest rates do
not necessarily move in the same direction or in the same magnitude as the price
of goods and services.
Market Prices and Related Shareholder Matters
- ---------------------------------------------
The stock of the Company is listed on The NASDAQ Stock Market National
Market System under the symbol "BSBN". As of September 30, 1996, the Company had
1,557 shareholders of record and 5,602,425 shares of outstanding common stock.
The number of shareholders does not reflect persons or entities who hold their
stock in nominee or "street" name through various brokerage firms.
14
<PAGE>
Item 2 - continued
The following table sets forth the market price information as reported by
The NASDAQ Stock Market for the common stock.
<TABLE>
<CAPTION>
Cash
Price Range Dividends
1995 High Low Per Share
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
First Quarter $19.83 $18.00 $0.15
Second Quarter 20.67 18.00 0.15
Third Quarter 21.33 20.00 0.15
Fourth Quarter 26.00 20.67 0.20
1996
- -----------------------------------------------------------------------------------------------------------------------------
First Quarter $26.50 $21.75 $0.20
Second Quarter 26.75 25.25 0.22
Third Quarter 26.25 24.75 0.22
</TABLE>
15
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 1 - Legal Proceedings
-----------------
Not applicable
Item 2 - Change 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
27 Financial Data Schedule
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BSB Bancorp, Inc.
Date: November 14, 1996 By: William H. Rincker
---------------------- ---------------------------------------
WILLIAM H. RINCKER
Chairman of the Board
and Chief Executive Officer
Date: November 14, 1996 By: Edward R. Andrejko
---------------------- ----------------------------------------
EDWARD R. ANDREJKO
Senior Vice President and
Chief Financial Officer
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 32,741
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 224,729
<INVESTMENTS-CARRYING> 24,422
<INVESTMENTS-MARKET> 25,302
<LOANS> 1,003,346
<ALLOWANCE> 16,160
<TOTAL-ASSETS> 1,306,330
<DEPOSITS> 1,100,266
<SHORT-TERM> 81,999
<LIABILITIES-OTHER> 19,169
<LONG-TERM> 0
0
0
<COMMON> 73
<OTHER-SE> 104,833
<TOTAL-LIABILITIES-AND-EQUITY> 1,306,330
<INTEREST-LOAN> 65,449
<INTEREST-INVEST> 12,738
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 78,187
<INTEREST-DEPOSIT> 35,226
<INTEREST-EXPENSE> 38,755
<INTEREST-INCOME-NET> 39,432
<LOAN-LOSSES> 7,726
<SECURITIES-GAINS> 1,300
<EXPENSE-OTHER> 21,156
<INCOME-PRETAX> 18,209
<INCOME-PRE-EXTRAORDINARY> 18,209
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,032
<EPS-PRIMARY> 1.84
<EPS-DILUTED> 1.84
<YIELD-ACTUAL> 8.74
<LOANS-NON> 14,286
<LOANS-PAST> 204
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 14,065
<CHARGE-OFFS> 6,469
<RECOVERIES> 838
<ALLOWANCE-CLOSE> 16,160
<ALLOWANCE-DOMESTIC> 16,160
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
