<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
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
-------
BSB BANCORP, INC.
----------------
(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
-------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (607) 779-2492
--------------
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 JULY 31, 1997: 5,689,765
SHARES OF COMMON STOCK, $0.01 PAR VALUE.
<PAGE>
INDEX
PART I. FINANCIAL INFORMATION PAGE
- ------------------------------ ----
Item 1: Financial Statements
-------
Consolidated Statements of Condition
June 30, 1997 and December 31, 1996.................... 1
Consolidated Statements of Income Three Months
and Six Months Ended June 30, 1997 and June 30,
1996................................................... 2
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1997
and June 30, 1996...................................... 3
Consolidated Statements of Changes in
Shareholders' Equity Six Months Ended
June 30, 1997 and June 30, 1996........................ 4
Notes to Consolidated Financial Statements............. 5
Item 2: Management's Discussion and Analysis of
-------
Financial Condition and Results of Operations.......... 6-14
PART II. OTHER INFORMATION
Items 1-6.............................................. 15-16
Signature Page......................................... 17
<PAGE>
Item 1 - Financial Statements
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
BSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF CONDITION (DOLLARS IN THOUSANDS-EXCEPT PER SHARE DATA)
- ----------------------------------------------------------------------------------------------------
JUNE 30, DECEMBER 31,
1997 1996
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 45,234 $ 46,427
Investment securities available for sale 263,105 263,602
Investment securities held to maturity (market value $18,192
and $24,822) 17,914 24,062
Mortgages held for sale 4,105 1,567
Loans:
Commercial 591,817 536,779
Consumer 258,954 217,068
Real estate 256,120 254,693
- ----------------------------------------------------------------------------------------------------
Total loans 1,106,891 1,008,540
Less: Unearned discounts 297 594
Allowance for possible credit losses 17,915 17,054
- ----------------------------------------------------------------------------------------------------
Net loans 1,088,679 990,892
Bank premises and equipment 9,487 9,007
Accrued interest receivable 9,935 9,352
Other real estate 3,891 1,393
Intangible assets 2,041 2,188
Other assets 21,335 14,630
- ----------------------------------------------------------------------------------------------------
$1,465,726 $1,363,120
====================================================================================================
LIABILITIES & SHAREHOLDERS' EQUITY
Due to depositors $1,138,868 $1,118,052
Borrowings 194,894 120,502
Other liabilities 17,752 15,837
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; 7,412,388
shares and 7,344,427 shares issued 74 73
Additional paid-in capital 28,702 27,824
Undivided profits 116,761 111,466
Unrealized depreciation
in securities available for sale, net (1,568) (877)
Treasury stock, at cost: 1,735,128 and 1,735,128 shares (29,757) (29,757)
- ----------------------------------------------------------------------------------------------------
Total Shareholders' Equity 114,212 108,729
- ----------------------------------------------------------------------------------------------------
$1,465,726 $1,363,120
====================================================================================================
</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 SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $25,085 $21,786 $48,705 $42,750
Interest on investment securities 4,845 4,189 9,903 8,442
Interest on mortgages held for sale 72 79 85 130
- ----------------------------------------------------------------------------------------------------
Total interest income 30,002 26,054 58,693 51,322
Interest expense:
Interest on savings deposits 981 1,025 1,926 2,036
Interest on time accounts 8,699 7,883 17,029 15,625
Interest on money market deposit accounts 2,900 2,592 5,670 5,037
Interest on NOW accounts 203 201 397 395
Interest on borrowed funds 2,465 1,045 4,596 2,336
- ----------------------------------------------------------------------------------------------------
Total interest expense 15,248 12,746 29,618 25,429
- ----------------------------------------------------------------------------------------------------
Net interest income 14,754 13,308 29,075 25,893
Provision for credit losses 2,354 2,605 4,813 4,678
- ----------------------------------------------------------------------------------------------------
Net interest income after provision for credit losses 12,400 10,703 24,262 21,215
Gains (losses) on sale of securities (14) 314 (18) 348
Losses on sale of loans (89) (231) (90) (75)
Non-interest income:
Service charges on deposit accounts 549 481 1,067 900
Credit card fees 216 987 358 1,787
Mortgage servicing fees 277 237 556 508
Fees and commissions-brokerage services 91 242 208 360
Trust fees 162 149 321 290
Other charges, commissions, and fees 330 164 493 349
- ----------------------------------------------------------------------------------------------------
Total non-interest income 1,625 2,260 3,003 4,194
Non-interest expense:
Salaries, pensions and other employee benefits 3,345 3,176 6,720 6,390
Building occupancy 688 575 1,385 1,169
Computer service fees 224 211 438 431
Services 583 678 1,024 1,249
FDIC insurance 40 21 60 39
Goodwill 74 74 148 148
Interchange fees 136 710 241 1,150
Other real estate 197 7 447 144
Other expenses 1,935 1,756 3,375 3,189
- ----------------------------------------------------------------------------------------------------
Total non-interest expense 7,222 7,208 13,838 13,909
- ----------------------------------------------------------------------------------------------------
Income before income taxes 6,700 5,838 13,319 11,773
Provision for income taxes 2,582 2,229 5,191 4,591
- ----------------------------------------------------------------------------------------------------
NET INCOME $ 4,118 $ 3,609 $ 8,128 $ 7,182
====================================================================================================
Primary earnings per share: $ 0.73 $ 0.59 $ 1.44 $ 1.17
Fully diluted earnings per share: $ 0.70 $ 0.58 $ 1.39 $ 1.14
====================================================================================================
Average shares outstanding 5,670,407 6,071,973 5,650,585 6,143,995
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
Item 1 - continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
BSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS)
- ----------------------------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30,
1997 1996
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating activities:
Net income $ 8,128 $ 7,182
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for credit losses 4,813 4,678
Realized losses (gains) on available for sale investment
securities 18 (348)
Other losses, net 75 70
Depreciation and amortization 875 665
Net amortization of premiums and discounts on investment
securities 182 18
Net amortization (accretion) of premiums and discounts on
loans (297) 69
Sales of loans originated for sale 14,971 11,092
Net increase in loans originated for sale (17,634) (14,469)
Writedowns of other real estate 337 410
Decrease in other assets and liabilities (4,877) (7,015)
- ----------------------------------------------------------------------------------------------------
Net cash provided by operating activities 6,591 2,352
- ---------------------------------------------------------------------------------------------------
Investing activities:
Proceeds from calls of held to maturity investment securities 7,917 7,199
Purchases of held to maturity investment securities (2,361) (18,044)
Principal collected on held to maturity investment securities 899 2,627
Proceeds from sales of available for sale investment securities 61,307 69,520
Purchases of available for sale investment securities (73,857) (68,412)
Principal collected on available for sale investment securities 11,353 16,772
Net increase in longer-term loans (117,119) (86,145)
Proceeds from sales of loans 11,683 23,218
Proceeds from sales of other real estate 336 1,064
Other (1,196) (1,438)
- ----------------------------------------------------------------------------------------------------
Net cash used by investing activities (101,038) (53,639)
- ----------------------------------------------------------------------------------------------------
Financing activities:
Net increase in demand deposits, NOW accounts, savings accounts,
and money market deposit accounts 17,020 19,210
Net increase in time deposits 3,796 24,265
Net increase in short-term borrowings (90 days) 74,596 8,240
Repayment of long term borrowings (204) (300)
Proceeds from exercise of stock options 879 580
Purchases of treasury stock 0 (8,647)
Dividends paid (2,833) (2,579)
- ----------------------------------------------------------------------------------------------------
Net cash provided by financing activities 93,254 40,769
- ---------------------------------------------------------------------------------------------------
Decrease in cash and cash equivalents (1,193) (10,518)
Cash and cash equivalents at beginning of year 46,427 43,826
- ---------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 45,234 $ 33,308
===================================================================================================
Supplemental disclosures of cash flow information: Cash paid during
the year for:
Interest credited on deposits and paid on other borrowings $ 29,130 $ 25,477
- ---------------------------------------------------------------------------------------------------
Income taxes $ 5,146 $ 5,370
- ---------------------------------------------------------------------------------------------------
Non-cash investing activity:
Securitization of mortgage loans and transfers to other real
estate $ 3,167 $ 11,294
- ---------------------------------------------------------------------------------------------------
Unrealized depreciation in securities $ (1,187) $ (2,956)
- ----------------------------------------------------------------------------------------------------
</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-EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
- ----------------------------------------------------------------------------------------------------
UNREALIZED
APPRECIATION
(DEPRECIATION)
SIX MONTHS ENDED ADDITIONAL IN MARKETABLE
JUNE 30, COMMON PAID-IN UNDIVIDED TREASURY EQUITY
1996 STOCK CAPITAL PROFITS STOCK SECURITIES TOTAL
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $ 73 $ 26,861 $ 101,519 $ (11,848) $ 169 $ 116,774
Increase in unrealized
depreciation in available
for sale securities (1,722) (1,722)
Net income 7,182 7,182
Stock options exercised 580 580
Cash dividend paid on common
stock ($0.42 per share) (2,579) (2,579)
Treasury stock purchased (8,647) (8,647)
- ----------------------------------------------------------------------------------------------------
Balance at June 30, 1996 $ 73 $ 27,441 $ 106,122 $ (20,495) $ (1,553) $ 111,588
====================================================================================================
1997
- ----------------------------------------------------------------------------------------------------
Balance at December 31, 1996 $ 73 $ 27,824 $ 111,466 $ (29,757) $ (877) $ 108,729
Increase in unrealized
depreciation in available
for sale securities (691) (691)
Net income 8,128 8,128
Stock options exercised 1 878 879
Cash dividend paid on common
stock ($0.50 per share) (2,833) (2,833)
- ----------------------------------------------------------------------------------------------------
Balance at June 30, 1997 $ 74 $ 28,702 $ 116,761 $ (29,757) $ (1,568) $ 114,212
====================================================================================================
</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
June 30, 1997
(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,
1996 data in the Consolidated Statements of Condition is derived from the
consolidated financial statements included in the Company's 1996 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 1996 Annual Report to Shareholders.
(2) For primary earnings per share, outstanding stock options were excluded from
the weighted average number of shares because their dilutive effect is not
material. The weighted average shares outstanding for calculating primary
earnings per share, were 5,670,407 and 6,071,973 for three months ended June
30, 1997 and 1996, and 5,650,585 and 6,143,995 for six months ended June 30,
1977 and 1996, respectively. Fully diluted earnings per share include the
dilutive effect of the Company's outstanding stock options. The weighted
average shares outstanding for calculating fully diluted earnings per share
were 5,870,089 and 6,225,639 for three months ended June 30, 1997 and 1996,
and 5,863,088 and 6,306,949 for six months ended June 30, 1997 and 1996,
respectively.
(3) In February 1997, the Financial Accounting Standard Board issued Statement
No. 128 "Earnings Per Share". This pronouncement will be required to be
implemented in the Company's Annual Report to Shareholders for the year
ended December 31, 1997. The pronouncement will not have any effect on the
calculation of basic earnings per share, and will not have a material effect
on diluted earnings per share.
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 $4,118,000, or $0.70 fully
diluted earnings per share, for the quarter ended June 30, 1997, as compared to
net income of $3,609,000, or $0.58 fully diluted earnings per share, for the
quarter ended June 30, 1996. Net income for the first six months of 1997
totalled $8,128,000, or $1.39 fully diluted earnings per share, compared to net
income of $7,182,000, or $1.14 fully diluted earnings per share for the first
six months of 1996. On July 28, 1997, the Board of Directors declared a 3-for-2
stock split. The stock split is payable on September 10, 1997 to shareholders of
record at the close of business on August 21, 1997. The Board of Directors also
announced a 20% increase in the quarterly cash dividend. The dividend, adjusted
for the stock split, is $0.20 per share and is payable on a post-split basis on
September 10, 1997 to shareholders of record at the close of business on August
22, 1997.
Financial Condition
- -------------------
During the first six months of 1997, the Bank originated $110.3 million of
commercial loans, which contributed to a net increase in the commercial loan
portfolio from $536.8 million at December 31, 1996 to $591.8 million at June 30,
1997. The interest rates on these loans are generally tied to the Company's
Prime Rate. Consumer loans increased from $217.1 million to $259.0 million, and
during this period, the Bank originated $98.9 million in consumer loans and sold
$0.5 million in student loans. Real estate loans increased from $254.7 million
at December 31, 1996 to $256.1 million at June 30, 1997. During this period, the
Bank originated $46.5 million of real estate loans and sold $26.2 million. Total
assets increased from $1,363.1 million at December 31, 1996 to $1,465.7 million
at June 30, 1997.
Total deposits increased from $1,118.1 million at December 31, 1996 to
$1,138.9 million at June 30, 1997. The Company's borrowings increased from
$120.5 million at December 31, 1996 to $194.9 million at June 30, 1997.
Borrowings at June 30, 1997 consisted of $135.0 million of Federal Home Loan
Bank advances and $46.0 million of a Federal Home Loan Bank line of credit. Of
the remaining $13.9 million, $12.1 million are securities sold under agreement
to repurchase. These borrowings are used to fund the Bank's lending activities.
Shareholders' equity increased from $108.7 million to $114.2 million during
the first six months of 1997. This increase is a result of earnings of $8.1
million and $0.9 million of stock options exercised during the period, which
were partially offset by a $0.7 million increase in unrealized depreciation in
securities available for sale and cash dividends paid to shareholders of $2.8
million.
6
<PAGE>
Item 2 - continued
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.
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
1997 1996
- -----------------------------------------------------------------------------------------------------
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST RATE BALANCE INTEREST RATE
- -----------------------------------------------------------------------------------------------------
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C>
Interest-earning assets:
Commercial loans $ 568,805 $ 13,968 9.82% $ 473,790 $ 11,660 9.84%
Consumer loans 244,094 5,783 9.48 200,396 4,729 9.44
Real estate loans 253,463 5,334 8.42 267,193 5,398 8.08
Investment securities 294,775 4,845 6.57 245,897 4,188 6.81
Mortgages held for sale 3,983 72 7.23 3,406 79 9.28
- -----------------------------------------------------------------------------------------------------
Total interest-earning assets 1,365,120 30,002 8.79 1,190,682 26,054 8.75
- -----------------------------------------------------------------------------------------------------
Non-interest-earning assets 74,774 69,272
- -----------------------------------------------------------------------------------------------------
Total assets $1,439,894 $1,259,954
=====================================================================================================
Interest-bearing liabilities:
Deposits and mortgage escrow
funds $1,133,667 $ 12,783 4.51% $1,048,603 $ 11,701 4.46%
Borrowings 173,232 2,465 5.69 75,342 1,045 5.55
- -----------------------------------------------------------------------------------------------------
Total interest-bearing
liabilities 1,306,899 15,248 4.67 1,123,945 12,746 4.54
- -----------------------------------------------------------------------------------------------------
Non-interest-bearing liabilities 18,623 20,269
- -----------------------------------------------------------------------------------------------------
Total liabilities 1,325,522 1,144,214
- -----------------------------------------------------------------------------------------------------
Shareholders' equity 114,372 115,740
- -----------------------------------------------------------------------------------------------------
Total liabilities and
shareholders' equity $1,439,894 $1,259,954
=====================================================================================================
Net interest income/net interest
rate spread $ 14,754 4.12% $13,308 4.21%
=====================================================================================================
Net earnings assets/net interest rate margin $ 58,221 4.32% $66,737 4.47%
=====================================================================================================
Ratio of interest-earning assets to
interest-bearing liabilities 1.04X 1.06X
=====================================================================================================
</TABLE>
7
<PAGE>
Item 2 - continued
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
1997 1996
- -----------------------------------------------------------------------------------------------------
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST RATE BALANCE INTEREST RATE
- -----------------------------------------------------------------------------------------------------
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C>
Interest-earning assets:
Commercial loans $ 558,047 $ 27,012 9.68% $ 461,578 $ 22,427 9.72%
Consumer loans 232,592 10,954 9.42 199,487 9,400 9.42
Real estate loans 253,898 10,739 8.46 267,666 10,923 8.16
Investment securities 292,190 9,903 6.78 247,043 8,442 6.83
Mortgages held for sale 2,859 85 5.95 2,295 130 11.33
- -----------------------------------------------------------------------------------------------------
Total interest-earning
assets 1,339,586 58,693 8.76 1,178,069 51,322 8.71
- -----------------------------------------------------------------------------------------------------
Non-interest-earning assets 72,385 71,009
- -----------------------------------------------------------------------------------------------------
Total assets $1,411,971 $1,249,078
=====================================================================================================
Interest-bearing liabilities:
Deposits and mortgage escrow
funds $1,114,893 $ 25,022 4.49% $1,030,738 $ 23,093 4.48%
Borrowings 165,624 4,596 5.55 83,343 2,336 5.61
- -----------------------------------------------------------------------------------------------------
Total interest-bearing
liabilities 1,280,517 29,618 4.63 1,114,081 25,429 4.57
- -----------------------------------------------------------------------------------------------------
Non-interest-bearing liabilities 18,368 18,477
- -----------------------------------------------------------------------------------------------------
Total liabilities 1,298,885 1,132,558
- -----------------------------------------------------------------------------------------------------
Shareholders' equity 113,086 116,520
- -----------------------------------------------------------------------------------------------------
Total liabilities and
shareholders' equity $1,411,971 $1,249,078
=====================================================================================================
Net interest income/net interest
rate spread $29,075 4.13% $25,893 4.14%
=====================================================================================================
Net earnings assets/net interest
rate margin $59,069 4.34% $63,988 4.40%
=====================================================================================================
Ratio of interest-earning assets to
interest-bearing liabilities 1.05X 1.06X
</TABLE>
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 June 30, Six Months Ended June 30,
1997 Compared to 1996 1997 Compared to 1996
Increase (Decrease) Increase (Decrease)
Volume Rate Net Volume Rate Net
- -----------------------------------------------------------------------------------------------------
(Dollars In Thousands)
Interest income on interest-earning assets:
<S> <C> <C> <C> <C> <C> <C>
Commercial loans $ 2,323 $ (15) $2,308 $4,859 $(274) $4,585
Consumer loans 1,034 20 1,054 1,554 0 1,554
Real estate loans (1,034) 970 (64) (994) 810 (184)
Investment securities 1,560 (903) 657 1,643 (182) 1,461
Mortgages held for sale 58 (65) (7) 69 (114) (45)
- -----------------------------------------------------------------------------------------------------
Total $ 3,941 $ 7 $3,948 $7,131 $ 240 $7,371
=====================================================================================================
<CAPTION>
Interest expense on interest-bearing liabilities:
<S> <C> <C> <C> <C> <C> <C>
Deposits $ 951 $ 131 $1,082 $1,603 $ 326 $1,929
Borrowings 1,393 27 1,420 2,335 (75) 2,260
- -----------------------------------------------------------------------------------------------------
2,344 158 2,502 3,938 251 4,189
- -----------------------------------------------------------------------------------------------------
Total $ 1,597 $(151) $1,446 $3,193 $ (11) $3,182
======================================================================================================
</TABLE>
8
<PAGE>
Item 2 - continued
Interest Income
- ---------------
The Company's interest income on earning assets increased from $26.1 million
for the three months ended June 30, 1996 to $30.0 million for the three months
ended June 30, 1997, and from $51.3 million to $58.7 million for the six months
ended June 30, 1996 and 1997, respectively. These increases in interest income
were the result of an increase in the average balance of earning assets from
$1,190.7 million to $1,365.1 million for the three months ended June 30, 1996
and June 30, 1997, respectively, and from $1,178.1 million to $1,339.6 million
for the six months ended June 30, 1996 and June 30, 1997, respectively. The
increase in the average yield on earning assets from 8.75% to 8.79% for the
three months ended June 30, 1996 and 1997, respectively, and from 8.71% for the
six months ended June 30, 1996 to 8.76% for the six months ended June 30, 1997,
also contributed to these increases in interest income for those periods. The
increase in the average balance of the commercial loan portfolio was the largest
contributor to the increase in interest income. The commercial loan average
balance increased $95.0 million from the second quarter of 1996 to $568.8
million for the second quarter of 1997, and increased $96.5 million for the
first six months of 1997 compared to the first six months of 1996. The average
yield on commercial loans declined only slightly from 9.84% for the second
quarter of 1996 to 9.82% for the second quarter of 1997, and from 9.72% for the
first six months of 1996 to 9.68% for the first six months of 1997. Despite high
levels of competition in the Company's lending markets for indirect auto and
direct loans, the Company continues to emphasize origination of these loans,
which add to the Company's market base for potential business and provides some
of the highest yielding assets for the Bank. Despite such competition, the
average balance of consumer loans increased 21.8% to $244.1 million for the
three-month period ended June 30, 1997 compared to $200.4 million for the three
months ended June 30, 1996, and 16.6% to $232.6 million for the six-month period
ended June 30, 1997 compared to $199.5 million for the six-month period ended
June 30, 1996. These average balance increases contributed $1.1 million to the
net increase in interest income for the three months ended June 30, 1997 and
$1.6 million for the six months ended June 30, 1997. The average balance of real
estate loans decreased $13.7 million to $253.5 million for the quarter ended
June 30, 1997 compared to the quarter ended June 30, 1996. This period reflected
an increase in yield from 8.08% to 8.42%, but the reduced average balance
resulted in a net decline of $64,000 in interest income from real estate loans
to $5.3 million. The average balance of real estate loans decreased $13.8
million to $253.9 million for the six months ended June 30, 1997 compared to the
six months ended June 30, 1996. This six-month period reflected an increase in
yield from 8.16% to 8.46%, but the reduced average balance resulted in a net
decline of $184,000 in interest income from real estate loans to $10.7 million.
The average balance of investment securities increased from $245.9 million for
the second quarter of 1996 to $294.8 million for the second quarter of 1997.
This contributed to a net increase in interest income of $0.7 million comparing
the respective quarters despite yields that decreased for this same period from
6.81% to 6.57%. The average balance of investment securities increased from
$247.0 million for the six months ended June 30, 1996 to $292.2 million for the
six months ended June 30, 1997. This contributed to a net increase in interest
income of $1.5 million comparing the respective period. Yields decreased for
this same period from 6.83% to 6.78%.
Interest Expense
- ----------------
Total interest expense increased by $2.5 million for the quarter ended June
30, 1997 as compared to the same period in 1996. The average balance of all
interest-bearing liabilities increased from $1,123.9 million for the quarter
ended June 30, 1996 to $1,306.9 million for the quarter ended June 30, 1997.
This increase accompanies an increase in the average rate paid on all
interest-bearing liabilities from 4.54% to 4.67% during the respective period.
The average balance of deposits increased from $1,048.6 million during the three
months ended June 30, 1996 to $1,133.7 million during the same period in 1997,
and from $1,030.7 million for the six month period ended June 30, 1996 to
$1,114.9 for the six month period ended June 30, 1997. The increase in the
average balance of deposits was the major factor contributing to an increase in
interest paid on deposits from $11.7 million for the second quarter of 1996 to
$12.8 million for the second quarter of 1997, and from $23.1 million to $25.0
million for the six month period. Another component of the change in
interest-bearing liabilities is the average balance of borrowings increasing
from $75.3 million for the three months ended June 30, 1996 to $173.2 million
for the three months ended June 30, 1997. A similar increase reflected average
balances of $83.3 million for the six month period ended June 30, 1996 to $165.6
million for the
9
<PAGE>
Item 2 - continued
six month period ended June 30, 1997. The borrowing balance augments deposits to
fund the loan growth principally in the commercial and consumer loan area when
needed. This increase in average balance was coupled with an increase in the
rate paid on borrowings from 5.55% to 5.69% during the three month period to
reflect higher borrowing costs from $1.0 million for the three months ended June
30, 1996 to $2.5 million for the same period in 1997. A decline in rates from
5.61% for six months ended June 30, 1996 to 5.55% for six months ended June 30,
1997 had a small impact in the growth of borrowing expense.
Provision for Credit Losses
- ---------------------------
The provision for credit losses decreased from $2.6 million to $2.4 million
for the quarters ended June 30, 1996 and June 30, 1997, respectively, and
increased from $4.7 million to $4.8 million for the six months ended June 30,
1996 and June 30, 1997, respectively. The allowance for possible credit losses
increased to $17.9 million as of June 30, 1997, compared to $17.1 million as of
December 31, 1996. 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 decreased from $2.3 million to $1.6 million for the three
months ended June 30, 1996 to June 30, 1997, respectively, and decreased from
$4.2 million to $3.0 million for the six month period ended June 30, 1996 to
June 30, 1997, respectively. This decline was largely attributable to the loss
of one large merchant credit card relationship in the fourth quarter of 1996.
The reduction of income from this relationship is substantially offset by a
reduction in the processing fee expenses associated with that merchant. This is
reflected in a 77.8% decline in credit card fee income, from $1.8 million to
$0.4 million for the six months ended June 30, 1996 compared to the same period
in 1997. As a result, the Company also benefited from a 83.3% decline on
interchange fee expenses from $1.2 million to $0.2 million for the same
respective periods. A similar relationship is noted for the three month period.
Gains (Losses) On Sale of Securities
- ------------------------------------
Losses on sale of securities was $14,000 for the second quarter of 1997 and
$18,000 for six months ended June 30, 1997. This compares to gains of $314,000
for the same quarter of 1996 and $348,000 for the six months ended June 30,
1996. The Bank's investment portfolio is used to maintain its liquidity
position; from time to time, securities are sold when deemed prudent by
management, to adjust the interest rate sensitivity of the Bank's balance sheet.
Gains (Losses) On Sale of Loans
- -------------------------------
The practice of the Bank has been to sell or securitize long-term, fixed-rate
residential mortgage loans. This provides the Bank with liquidity to fund
shorter-term, or more rate-sensitive assets, and collateral to provide borrowing
for lending activities. As a result of this practice, the Bank securitized or
sold $16.5 million and $23.0 million for the second quarter of 1997 and 1996,
respectively. This resulted in losses of $89,000 and $231,000 for the same two
periods. For the six month period ended June 30, 1997 and 1996, the Bank
securitized or sold $26.2 million and $35.1 million, respectively, of
residential mortgage loans. These sales generated losses of $90,000 and $75,000
for the same six month periods.
Non-interest Expense
- --------------------
Non-interest expense remained stable at $7.2 million for the quarters ended
June 30, 1996 and 1997, respectively. For the
10
<PAGE>
Item 2 - continued
comparative six month periods, non-interest expense declined $100,000 from $13.9
million to $13.8 million. This was due to the loss of one large merchant credit
card relationship in the fourth quarter of 1996 that caused a decline in
interchange fee expense associated with these transactions from $710,000 to
$136,000 for the quarter ended June 30, 1996 to June 30, 1997. This same decline
in expense is shown in the decrease in this expense from $1.2 million to
$241,000 for the six month period ended June 30, 1996 to the same period ended
June 30, 1997. Offsetting this decrease in non-interest expense were increases
in ORE expenses of $190,000 for the quarter ended June 30, 1997 compared to 1996
and $303,000 for the six months ended for the same periods.
Income Taxes
- ------------
The income tax expense was $2.2 million and $2.6 million for the quarters
ended June 30, 1996 and June 30, 1997, respectively, and $4.6 million and $5.2
million for the six month periods ended June 30, 1996 and June 30, 1997,
respectively. These increases were due to increased levels of taxable income.
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>
June 30, December 31,
1997 1996
- ------------------------------------------------------------------------------------------------------
(Dollars In Thousands)
<S> <C> <C>
Commercial loans:
Non-accrual loans $5,258 $ 6,130
Consumer loans:
Accruing loans 90 days overdue 151 236
Residential real estate loans:
Non-accrual loans 1,345 1,556
Commercial real estate loans:
Non-accrual loans 1,768 4,295
- ----------------------------------------------------------------------------------------------------
Total non-performing loans and accruing loans 90 days overdue $8,522 $12,217
====================================================================================================
Total non-performing loans to total gross loans 0.77% 1.21%
Total real estate acquired in settlement of
loans at net realizable value $3,891 $ 1,393
Total non-performing loans and real estate acquired in settlement
of loans at net realizable value to total assets 0.85% 1.00%
</TABLE>
Total non-performing loans and other real estate owned decreased to $12.4
million, or 0.85% of total assets at June 30, 1997, compared to $13.6 million,
or 1.00% of total assets at December 31, 1996.
11
<PAGE>
Item 2 - continued
At December 31, 1996, 36 non-performing residential real estate loans totaled
$1.6 million. At June 30, 1997, non-performing residential real estate loans
totaled $1.3 million and included 28 loans.
At December 31, 1996, non-performing commercial real estate loans totaled
$4.3 million, and included 8 loans ranging in size from $62,000 to $1.8 million.
At June 30, 1997, non-performing commercial real estate loans declined to $1.8
million and consisted of 7 loans ranging in size from $123,000 to $597,000.
Non-performing commercial loans at December 31, 1996 totaled $6.1 million and
included 41 individual loans ranging in size from $600 to $1.6 million. At June
30, 1997, non-performing commercial loans decreased to $5.3 million and
consisted of 20 individual loans ranging in size from $2,000 to $1.6 million.
The Company's policy is to charge-off all consumer loans before they become
non-accrual. At December 31, 1996, the Company had $236,000 of loans greater
than 90 days past due on which it was accruing interest, as compared to $151,000
at June 30, 1997. As of each date, the only such loans were consumer loans.
At June 30, 1997, the recorded investment in loans for which impairment has
been recognized in accordance with SFAS No. 114 totaled $7,483,110 with a
corresponding valuation allowance of $3,534,609.
At December 31, 1996, ORE, which is defined to include property acquired by
foreclosure or by deed in lieu of foreclosure, totaled $1.4 million, which
consisted of 12 single-family residential properties with a book value totaling
$712,000 and 7 local commercial real estate properties with a book value of
$682,000. At June 30, 1997, ORE totaled $3.9 million, which consisted of 10
single-family residential properties totaling $700,000 and 9 local commercial
real estate properties with a book value of $3.2 million.
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 SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
- ----------------------------------------------------------------------------------------------------
(Dollars In Thousands)
<S> <C> <C> <C> <C>
Average gross loans outstanding $1,084,852 $956,928 $1,062,690 $944,019
====================================================================================================
Allowance at beginning of period $17,556 $14,712 $17,054 $14,065
- ----------------------------------------------------------------------------------------------------
Charge-offs:
Commercial loans 1,272 1,846 2,569 3,088
Consumer loans 439 363 848 711
Residential real estate loans 12 0 44 30
Commercial real estate loans 749 274 1,238 450
- ----------------------------------------------------------------------------------------------------
Total loan charge-offs 2,472 2,483 4,699 4,279
Recoveries:
Commercial loans 76 56 180 193
Consumer loans 148 122 309 233
Residential real estate loans 0 0 0 0
Commercial real estate loans 253 13 258 135
- ----------------------------------------------------------------------------------------------------
Total recoveries 477 191 747 561
- ----------------------------------------------------------------------------------------------------
Net charge-offs 1,995 2,292 3,952 3,718
- ----------------------------------------------------------------------------------------------------
Provision for credit losses charged to operating
expenses 2,354 2,605 4,813 4,678
- ----------------------------------------------------------------------------------------------------
Allowance at end of period $17,915 $15,025 $17,915 $15,025
====================================================================================================
Ratio of net charge-offs to:
Average gross loans outstanding (annualized) 0.74% 0.96% 0.74% 0.79%
Ratio of allowance to:
Non-performing loans 210.22% 146.89% 210.22% 146.89%
Period-end loans outstanding 1.62% 1.54% 1.62% 1.54%
</TABLE>
Charge-offs remained constant at $2.5 million for the second quarter of 1997
compared to 1996 with recoveries increasing to $0.5 million for the second
quarter of 1997 from $0.2 million for the second quarter of 1996. For the six
months period ended June 30, 1996 compared to June 30, 1997, net charge-offs
increased from $3.7 million to $4.0 million. Management considers the current
level of loan loss reserves to be adequate to cover potential credit losses
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 $1,123.9 million for the three-month
period ended June 30, 1996 to $1,306.9 million for the same period ended June
30, 1997, an increase of $183.0 million. With the conversion of the Bank to a
state-chartered commercial bank in 1995, the Bank is allowed to accept deposits
from local municipalities. This significant source of funds has contributed to
the increase in all interest-bearing liabilities by showing an increase in
average balance from $63.7 million for the quarter ended June 30, 1996 to $96.5
million for the quarter ended June 30, 1997, an increase of $32.8 million. To
further fund loan growth, borrowings increased from an average balance of $75.3
million to $173.2 million for the quarter ended June 30, 1996 to the same
quarter ended June 30, 1997. Of this $97.9 million increase, $92.5 million was
from the Federal Home Loan Bank of New York ("FHLB"). The most significant other
increase in interest-bearing liabilities for the quarter ended June 30, 1996 to
June 30, 1997, was an increase in money-market accounts of $21.5 million to
$254.5 million. Average balances, as discussed above for the quarter ended
comparisons, are reflective of the six month comparative average balances. The
average balance of total interest-bearing liabilities increased from $1,114.1
million for the six months ended June 30, 1996 to $1,280.5 million for the six
months ended June 30, 1997. The increase in municipal deposits was $45.9 million
in the
13
<PAGE>
Item 2 - continued
six month period from June 30, 1996 to June 30, 1997, and the six month
average ended June 30, 1997 was $98.8 million. For the six month period ended
June 30, 1996, the average balance of borrowings was $83.3 million compared to
$165.6 million for the six months ended June 30, 1997, an increase of $82.3
million. Money market accounts during the six month comparative periods
increased $22.5 million to $250.8 million at June 30, 1997.
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 and mortgage-backed
securities, bond maturities, and such other sources as long- and short-term
borrowings, and sales of investment securities, loans, and mortgage-backed
securities. At June 30, 1997, the total of approved loan commitments amounted to
$91.3 million. All borrowings are scheduled to mature during the next twelve
months. Savings certificates, which are scheduled to mature during the next
twelve months, totaled $408.9 million. Management expects that a substantial
portion of these maturing certificates will remain on deposit with the Company.
At June 30, 1997, the Company had no long-term borrowings.
At June 30, 1997, the Company's Tier I leverage ratio, as defined in
guidelines, was 7.86%, which exceeds the current requirements for the Company.
At June 30, 1997, the Company's total capital-to-risk-weighted assets ratio,
calculated under the Federal Reserve Board's risk-based capital requirements,
was 10.78%.
The Company's book value per common share increased from $19.38 at December
31, 1996 to $20.12 at June 30, 1997.
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 June 30, 1997, the Company had 1,628
shareholders of record and 5,677,260 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.
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
1996 High Low Per Share
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
First Quarter $26.50 $21.75 $0.20
Second Quarter 26.75 25.25 0.22
Third Quarter 26.25 24.75 0.22
Fourth Quarter 27.75 25.38 0.25
1997
- -----------------------------------------------------------------------------------------------
First Quarter $32.00 $25.75 $0.25
Second Quarter 39.00 29.25 0.25
</TABLE>
14
<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
---------------------------------------------------
(a) On April 28, 1997, the Company held an Annual Meeting of
Shareholders (the "Annual Meeting") to elect four directors
for a term of three years and ratify the appointment of the
Company's independent auditors for the fiscal year ended
December 31, 1997.
(b) At the Annual Meeting, Mrs. Helen A. Gamble and Messrs.
David A. Niermeyer, Mark T. O'Neil, Jr., and Thomas L. Thorn
were elected as directors. Each of the following
individual's term of office continued after the Annual
Meeting:
Ferris G. Akel Thomas F. Kelly, PhD.
Robert W. Allen Herbert R. Levine
William C. Craine William H. Rincker
Alex S. DePersis John V. Sponyoe
(c) Set forth below is a description of each matter voted upon
at the Annual Meeting and the number of votes cast for,
against or withheld, as well as the number of abstentions
and broker non-votes as to each such matter.
1. Four directors were elected for a term of three years,
or until their successors have been elected and
qualified. A list of such directors, including the
votes for, withheld and abstentions, and broker
non-votes, is set forth below:
<TABLE>
<CAPTION>
Votes Broker
For Withheld Abstentions Non-votes
<S> <C> <C> <C> <C>
Helen A. Gamble 4,845,220 26,106 0 0
David A. Niermeyer. 4,844,746 26,579 0 0
Mark T. O'Neil, Jr. 4,844,848 26,477 0 0
Thomas L. Thorn 4,844,925 26,400 0 0
</TABLE>
2. The appointment of Coopers & Lybrand L.L.P. as the
Company's independent auditors for the fiscal year
ended December 31, 1997 was ratified. There were
4,856,330 votes cast for the proposal, and 6,123 votes
against the proposal, and 8,870 votes abstained. There
were 0 broker non-votes.
(d) Not applicable.
15
<PAGE>
Part II - continued
Item 5 - Other Information
-----------------
Not applicable
Item 6 - Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
27 Financial Data Schedule
16
<PAGE>
Part II - continued
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: August 14, 1997 By: Alex S. DePersis
---------------- --------------------------------------
ALEX S. DEPERSIS
President
and Chief Executive Officer
Date: August 14, 1997 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 45234
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 263105
<INVESTMENTS-CARRYING> 17914
<INVESTMENTS-MARKET> 18192
<LOANS> 1110996
<ALLOWANCE> 17915
<TOTAL-ASSETS> 1465726
<DEPOSITS> 1138868
<SHORT-TERM> 194894
<LIABILITIES-OTHER> 17752
<LONG-TERM> 0
74
0
<COMMON> 0
<OTHER-SE> 114138
<TOTAL-LIABILITIES-AND-EQUITY> 1465726
<INTEREST-LOAN> 48790
<INTEREST-INVEST> 9903
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 58693
<INTEREST-DEPOSIT> 25022
<INTEREST-EXPENSE> 29618
<INTEREST-INCOME-NET> 29075
<LOAN-LOSSES> 4813
<SECURITIES-GAINS> (18)
<EXPENSE-OTHER> 13838
<INCOME-PRETAX> 13319
<INCOME-PRE-EXTRAORDINARY> 13319
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8128
<EPS-PRIMARY> 1.44
<EPS-DILUTED> 1.39
<YIELD-ACTUAL> 8.76
<LOANS-NON> 8371
<LOANS-PAST> 151
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 17054
<CHARGE-OFFS> 4699
<RECOVERIES> 747
<ALLOWANCE-CLOSE> 17915
<ALLOWANCE-DOMESTIC> 17915
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
