<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_x_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1996
Commission file number: 0-17482
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
County Bank Corp
Michigan EIN 38-0746239
83 W. Nepessing St., Lapeer, MI 48446
(810) 664-2977
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 latest practicable date.
There are 593,236 shares of common stock ($5.00 par value) outstanding as of
June 30, 1996.
<PAGE> 2
COUNTY BANK CORP
FORM 10-Q
For the Quarter Ended June 30, 1996
INDEX
<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Financial Statements 2
Introduction-
Balance Sheets- 3
At June 30, 1996 and December 31, 1995
Statements of Income- 4
For the three months and six months ended June 30, 1996 and 1995
Statement of Cash Flows- 5
For the three months and six months ended June 30, 1996 and 1995
Item 2. Management's Discussion and Analysis of 6-7
Financial Condition and Results of Operations
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 8
All items except those set forth above are inapplicable and have
been omitted
SIGNATURES 9
</TABLE>
PAGE 1
<PAGE> 3
Part I - Financial Information
Item I - Financial Statements
Introduction to Financial Statements
The consolidated financial statements of County Bank Corp and subsidiary,
Lapeer County Bank & Trust Co., have been prepared, without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted pursuant to such rules and regulations. The Company believes that the
disclosures are adequate to make the information presented not misleading when
read in conjunction with financial statements and the notes thereto included in
County Bank Corp's Form 10-K as filed with the Securities and Exchange
Commission for the year ended December 31, 1995.
The financial information presented reflects all adjustments (consisting only
of normal recurring adjustments) which are, in the opinion of management,
necessary for a fair statement of the results for the interim periods
presented. The results for interim periods are not necessarily indicative of
the results to be expected for the year.
PAGE 2
<PAGE> 4
CONSOLIDATED STATEMENTS
BALANCE SHEETS (In thousands)
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1996 1995
<S> <C> <C>
ASSETS
Cash and due from banks . . . . . . . . . . . . . . . . . . 8,945 8,027
Investment securities available for sale . . . . . . . . . . 16,487 14,371
Investment securities held to maturity . . . . . . . . . . . 31,079 33,793
------- -------
Total investment securities . . . . . . . . . . . . . . . 47,566 48,164
Federal funds sold . . . . . . . . . . . . . . . . . . . . . 4,650 5,050
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,071 105,349
Less: Reserve for possible loan losses . . . . . . . . . . 1,739 1,687
------- -------
Net loans . . . . . . . . . . . . . . . . . . . . . . . 107,332 103,662
Bank premises & equipment . . . . . . . . . . . . . . . . . 2,743 2,655
Interest receivable and other assets . . . . . . . . . . . . 2,307 2,319
------- -------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . 173,543 169,877
======= =======
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Demand . . . . . . . . . . . . . . . . . . . . . . . . . . 65,875 61,531
Savings . . . . . . . . . . . . . . . . . . . . . . . . . 41,857 42,621
Time . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,729 46,736
------- -------
Total deposits . . . . . . . . . . . . . . . . . . . . . 153,461 150,888
Interest payable and other liabilities . . . . . . . . . . . 1,330 1,269
------- -------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . 154,791 152,157
STOCKHOLDERS' EQUITY
Common stock-$5.00 par value, 600,000 shares authorized,
296,618 shares outstanding . . . . . . . . . . . . . . . . 2,966 2,966
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . 8,634 8,634
Undivided profits . . . . . . . . . . . . . . . . . . . . . 6,988 5,810
Unrealized losses on securities available for sale . . . . 164 310
------- -------
TOTAL STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . 18,752 17,720
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . . . 173,543 169,877
======= =======
</TABLE>
PAGE 3
<PAGE> 5
CONSOLIDATED INCOME STATEMENTS
(In thousands)
<TABLE>
<CAPTION> THREE MONTHS FOR THE SIX MONTHS
ENDED ENDED
JUNE 30 JUNE 30
INTEREST INCOME 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest and fees on loans...................................... 2,344 2,189 4,636 4,322
Interest on investment securities: 678 766 1,367 1,533
Interest on Federal funds sold.................................. 83 41 151 62
----- ----- ----- -----
TOTAL INTEREST INCOME........................................ 3,105 2,996 6,154 5,917
INTEREST EXPENSE
Demand deposits............................................... 288 205 562 381
Savings deposits.............................................. 308 338 613 673
Time deposits................................................. 583 621 1,184 1,205
Borrowed funds................................................ 1 2 1 7
----- ----- ----- -----
TOTAL INTEREST EXPENSE...................................... 1,180 1,166 2,360 2,266
----- ----- ----- -----
NET INTEREST INCOME............................................. 1,925 1,830 3,794 3,651
Provision for possible loan losses.............................. 30 30 60 60
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES..................................... 1,895 1,800 3,734 3,591
OTHER INCOME
Service fees and loan and deposit accounts...................... 288 274 565 539
Other........................................................... 423 189 626 373
----- -----
TOTAL OTHER INCOME.......................................... 711 463 1,191 912
OTHER EXPENSES
Salaries and employee benefits.................................. 855 766 1,729 1,561
Net occupancy expense........................................... 194 195 385 404
Other........................................................... 366 461 763 903
----- ----- ----- -----
TOTAL OTHER EXPENSE......................................... 1,415 1,422 2,877 2,868
----- ----- ----- -----
INCOME BEFORE PROVISION FOR
FEDERAL INCOME TAX............................................ 1,191 841 2,048 1,635
Provision for Federal income tax................................ 343 222 573 423
----- ----- ----- -----
NET INCOME...................................................... 848 619 1,475 1,212
===== ===== ===== =====
EARNINGS PER SHARE
Net Income...................................................... $1.43 $1.04 $2.49 $2.04
Cash Dividend Declared.......................................... $0.25 $0.20 $0.50 $0.41
</TABLE>
PAGE 4
<PAGE> 6
STATEMENT OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . 848 619 1,475 1,212
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation and amortization . . . . . . . . . . . . . . 100 107 215 195
Provision for loan losses . . . . . . . . . . . . . . . . 30 30 60 60
Net amortization and accretion of securities . . . . . . 83 75 134 158
Deferred income taxes . . . . . . . . . . . . . . . . . . 0 0 0 0
Net gain on sale of investment securities . . . . . . . . 0 0 0 0
(Gain) loss on other real estate owned . . . . . . . . . (7) 0 (7) (2)
Net change in accrued interest receivable . . . . . . . . 152 178 (114) (195)
Net change in accrued interest payable and other . . . . . 68 (221) 137 (75)
------ ------ ------ ------
Net cash provided by operating activities . . . . . . . . 1,274 788 1,900 1,353
------ ------ ------ ------
Cash flows from investing activities
Proceeds from sale of investment securities: AFS . . . . . 0 0 0 0
Proceeds from maturities of investment securities: AFS . . 262 2,211 1,683 3,359
Proceeds from maturities of investment securities: HTM . . 2,099 1,031 3,914 1,759
Purchase of investment securities: AFS . . . . . . . . . . (3,000) 0 (4,020) 0
Purchase of investment securities: HTM . . . . . . . . . . (1,334) 0 (1,334) (1,507)
Net (increase) decrease in loans . . . . . . . . . . . . (2,142) (2,669) (3,872) (3,624)
Proceeds from the sale of Other Real Estate . . . . . . . 39 0 224 2
Premises and equipment expenditures . . . . . . . . . . . (32) (265) (253) (366)
------ ------ ------ ------
Net Cash provided from (used in) investing activities . . (4,108) 308 (3,658) (377)
------ ------ ------ ------
Cash flows from financing activities
Net increase (decrease) in interest bearing
and non-interest bearing demand accounts . . . . . . . . 3,321 5,349 4,344 1,639
Net increase (decrease) in savings and time deposits . . . (947) (2,535) (1,771) (3,419)
Cash dividends paid . . . . . . . . . . . . . . . . . . . (149) (121) (297) (243)
------ ------ ------ ------
Net Cash provided from (used in) financing activities . . 2,225 2,693 2,276 (2,023)
------ ------ ------ ------
Net increase (decrease) in cash and equivalents . . . . . (609) 3,789 518 (1,047)
Cash and equivalents at beginning of year . . . . . . . . 14,204 7,586 13,077 12,422
------ ------ ------ ------
Cash and equivalents at end of period . . . . . . . . . . 13,595 11,375 13,595 11,375
====== ====== ====== ======
Cash paid for:
Interest . . . . . . . . . . . . . . . . . . . . . . . . 1,180 1,153 2,361 2,250
Income taxes . . . . . . . . . . . . . . . . . . . . . . . 241 221 482 442
</TABLE>
PAGE 5
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition and the
Results of Operations
This discussion primarily applies to Lapeer County Bank & Trust Co. (the Bank),
the wholly owned subsidiary and sole asset of County Bank Corp (the Corporation)
Financial Condition
The loans to deposits ratio reached 71.07% at the end of the second quarter of
1996, an increase from 65% on December 31, 1995. Mortgages increased to 26.9%
of the loan portfolio from 23.4% during the fourth quarter 95 and 25.4% during
the first quarter of 1996. Mortgages grew 19.2% during the first two quarters
of 1996. Consumer loans and commercial loans declined slightly from year end
balances. However, consumer loans have increased slightly from first quarter
1996 balances. Commercial loans grew 2.6% over second quarter 1995 balances.
Deposits continue to flow toward demand and interest-bearing demand accounts.
Interest-bearing demand accounts grew 10.3% since the fourth quarter of 1995
due primarily to continued increases in the Choice account product. Demand
deposits grew 3.1% from fourth quarter 1995 levels after dropping 3.4% during
the first quarter of 1996. Time deposits continue to decline as customers seek
liquidity and return.
Results of Operations
The interest spread for the second quarter was 4.20% following a 4.15% spread
in the first quarter of 1996. Interest margin as a percentage of average assets
declined to 4.71% during the first quarter of 1996 from 4.68% in the first
quarter of 1996. Interest margin remains relatively strong due to the increased
loans to deposits ratio (71.1% on June 30, 1996). Non-interest expense ratios
remain at levels within historical parameters for the Bank. Non-interest income
increased $212,000 as a result of the full repayment of a loan that was
previously in non-accrual status. The loan repayment was unexpected and the
increase was a result of a deferred credit posted when the loan was initially
rewritten and placed back in accrual status. Net income reached 1.97% of
average assets for the quarter.
Capital
The Bank continues to retain earnings to increase capital. The moderate growth
in total assets contributes to the increasing capital ratios.
Risk
Past due and non-performing loan ratios improved during the second quarter of
1996. These ratios remain at historically low levels. The Reserve for loan
losses to gross loans ratios remains very strong. The adequacy of the loan loss
reserve is calculated based on historical experience and specific allocations
for problem credits. The excess reserve based on this calculation is
Page 6
<PAGE> 8
$1,416,000 at the end of the first quarter of 1996, an increase from $1,392,000
on December 31, 1995.
Rate risk continues to be controllable with a rate sensitivity of (5.80%) at
six months. This means the bank will be repricing liabilities more quickly than
loans during the next six months. Maturing deposits are priced at or slightly
below current rates. In a stable or slightly increasing rate environment, the
Bank will experience increased pressure on the interest margin.
Page 7
<PAGE> 9
Part II.
Item 6. Exhibits and Reports on Form 8-K.
A) Not Applicable
B) A Form 8-K has not been filed during the six months ended June 30, 1996.
PAGE 8
<PAGE> 10
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.
COUNTY BANK CORP
Date August 12, 1995
Joseph H. Black
-------------------------------------
Joseph H. Black, Treasurer
PAGE 9
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 8,945
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 4,650
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 47,566
<INVESTMENTS-MARKET> 47,492
<LOANS> 109,071
<ALLOWANCE> 1,739
<TOTAL-ASSETS> 173,543
<DEPOSITS> 153,461
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,330
<LONG-TERM> 0
0
0
<COMMON> 2,966
<OTHER-SE> 15,786
<TOTAL-LIABILITIES-AND-EQUITY> 178,543
<INTEREST-LOAN> 4,636
<INTEREST-INVEST> 1,367
<INTEREST-OTHER> 151
<INTEREST-TOTAL> 6,154
<INTEREST-DEPOSIT> 2,360
<INTEREST-EXPENSE> 2,360
<INTEREST-INCOME-NET> 3,794
<LOAN-LOSSES> 60
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,877
<INCOME-PRETAX> 2,048
<INCOME-PRE-EXTRAORDINARY> 2,048
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,475
<EPS-PRIMARY> 2.49
<EPS-DILUTED> 2.49
<YIELD-ACTUAL> 7.99
<LOANS-NON> 420
<LOANS-PAST> 142
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 65
<ALLOWANCE-OPEN> 1,687
<CHARGE-OFFS> 53
<RECOVERIES> 44
<ALLOWANCE-CLOSE> 1,739
<ALLOWANCE-DOMESTIC> 323
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,416
</TABLE>
