<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 September 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
September 30, 1996.
<PAGE> 2
COUNTY BANK CORP
FORM 10-Q
For the Quarter Ended September 30, 1996
INDEX
<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Financial Statements 2
. Introduction-
. Balance Sheets - 3
At September 30, 1996 and December 31, 1995
. Statements of Income - 4
For the three months and nine months ended September 30, 1996 and 1995
. Statement of Cash Flows - 5
For the three months and nine months ended September 30, 1996 and 1995
Item 2. Management's Discussion and Analysis of 6
Financial Condition and Results of Operations
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 7
All items except those set forth above are inapplicable and have been omitted.
SIGNATURES 8
</TABLE>
<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 mangement,
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
<TABLE>
<CAPTION>
BALANCE SHEETS (in thousands) SEPTEMBER 30 DECEMBER 31
1996 1995
<S> <C> <C>
ASSETS
Cash and due from banks................................................... 8,615 8,027
Investment securities available for sale.................................. 16,636 14,371
Investment securities held to maturity.................................... 30,652 33,793
--------------- ---------------
Total investment securities........................................... 47,288 48,164
Federal funds sold ....................................................... 350 5,050
Loans..................................................................... 115,158 105,349
Less: Reserve for possible loan losses................................. 1,797 1,687
--------------- ---------------
Net loans........................................................... 113,361 103,662
Bank premises & equipment................................................. 2,689 2,655
Interest receivable and other assets...................................... 2,463 2,319
--------------- ---------------
TOTAL ASSETS........................................................... 174,766 169,877
=============== ===============
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Demand................................................................. 66,782 61,531
Savings................................................................ 41,073 42,621
Time .................................................................. 46,216 46,736
--------------- ---------------
Total deposits....................................................... 154,071 150,888
Interest payable and other liabilities.................................... 1,343 1,269
--------------- ---------------
TOTAL LIABILITIES...................................................... 155,414 152,157
STOCKHOLDERS' EQUITY
Common stock-$5.00 par value, 1,200,000 shares authorized and
593,236 shares outstanding in 1996, 600,000 shares authorized and
296,618 shares outstanding in 1995........................................ 2,966 2,966
Surplus................................................................... 8,634 8,634
Undivided profits......................................................... 7,570 5,810
Unrealized gains on securities available for sale 182 310
--------------- ---------------
TOTAL STOCKHOLDERS' EQUITY............................................. 19,352 17,720
--------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............................. 174,766 169,877
=============== ===============
</TABLE>
Page 3
<PAGE> 5
CONSOLIDATED INCOME STATEMENTS
<TABLE>
<CAPTION>
(in thousands) THREE MONTHS FOR THE NINE MONTHS
ENDED ENDED
SEPTEMBER 30 SEPTEMBER 30
INTEREST INCOME 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest and fees on loans............................ 2,441 2,303 7,077 6,625
Interest on investment securities: 723 738 2,090 2,271
Interest on Federal funds sold........................ 49 36 200 98
--------- ----------- ----------- ----------
TOTAL INTEREST INCOME........................... 3,213 3,077 9,367 8,994
INTEREST EXPENSE
Demand deposits.................................... 319 234 881 613
Savings deposits................................... 305 317 918 992
Time deposits...................................... 599 646 1,783 1,851
Borrowed funds..................................... 0 1 1 8
--------- ----------- ----------- ----------
TOTAL INTEREST EXPENSE.......................... 1,223 1,198 3,583 3,464
--------- ----------- ----------- ----------
NET INTEREST INCOME................................... 1,990 1,879 5,784 5,530
Provision for possible loan losses.................... 30 30 90 90
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES.......................... 1,960 1,849 5,694 5,440
OTHER INCOME
Service fees on loan and deposit accounts............. 281 280 846 819
Other................................................. 207 184 833 557
--------- ----------- ----------- ----------
TOTAL OTHER INCOME.............................. 488 464 1,679 1,376
OTHER EXPENSES
Salaries and employee benefits........................ 857 803 2,586 2,364
Net occupancy expense................................. 189 208 574 612
Other................................................. 395 343 1,158 1,246
--------- ----------- ----------- ----------
TOTAL OTHER EXPENSE............................. 1,441 1,354 4,318 4,222
--------- ----------- ----------- ----------
INCOME BEFORE PROVISION FOR
FEDERAL INCOME TAX................................. 1,007 959 3,055 2,594
Provision for Federal income tax...................... 277 258 850 682
--------- ----------- ----------- ----------
NET INCOME............................................ 730 701 2,205 1,912
========= =========== =========== ==========
EARNINGS PER SHARE
Net Income............................................ $1.23 $1.18 $3.72 $3.22
Cash Dividend Declared................................ $0.25 $0.23 $0.75 $0.64
</TABLE>
Page 4
<PAGE> 6
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS THREE MONTHS ENDED NINE MONTHS ENDED
(in thousands) SEPTEMBER 30 SEPTEMBER 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net income................................................... 730 701 2,205 1,912
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation and amortization................................ 61 92 276 288
Provision for loan losses.................................... 30 30 90 90
Net amortization and accretion of securities................. 14 75 148 233
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....................... (5) 0 (12) (2)
Net change in accrued interest receivable.................... (209) (188) (323) (383)
Net change in accrued interest payable and other............. (63) 126 74 51
------------ ------------ ------------ -----------
Net cash provided by operating activities.................... 558 836 2,458 2,189
------------ ------------ ------------ -----------
Cash flows from investing activities
Proceeds from sale of investment securities: AFS............. 0 0 0 0
Proceeds from maturities of investment securities: AFS....... 72 132 1,755 3,491
Proceeds from maturities of investment securities: HTM....... 2,060 721 5,974 2,480
Purchase of investment securities: AFS....................... (195) 0 (4,215) 0
Purchase of investment securities: HTM....................... (1,499) 0 (2,833) (1,507)
Net (increase) decrease in loans............................. (6,113) (1,988) (9,985) (5,612)
Proceeds from the sale of Other Real Estate.................. 54 0 278 2
Premises and equipment expenditures.......................... (29) (116) (282) (482)
------------ ------------ ------------ -----------
Net Cash provided from (used in) investing activities (5,650) (1,251) (9,308) (1,628)
------------ ------------ ------------ -----------
Cash flows from financing activities
Net increase (decrease) in interest bearing
and non-interest bearing demand accounts................... 907 2,178 5,251 3,817
Net increase (decrease) in savings and time deposits......... (297) (2,553) (2,068) (5,972)
Cash dividends paid.......................................... (148) (134) (445) (377)
------------ ------------ ------------ -----------
Net Cash provided from (used in)financing activities......... 462 (509) 2,738 (2,532)
------------ ------------ ------------ -----------
Net increase (decrease) in cash and equivalents.............. (4,630) (924) (4,112) (1,971)
Cash and equivalents at beginning of year 13,595 11,375 13,077 12,422
------------ ------------ ------------ -----------
Cash and equivalents at end of period 8,965 10,451 8,965 10,451
============ ============ ============ ===========
Cash paid for:
Interest..................................................... 1,222 1,198 3,583 3,464
Income taxes................................................. 408 241 890 683
</TABLE>
Page 5
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition and the
Results of Operation.
This discussion primarily relates to Lapeer County Bank & Trust Co. (the Bank),
the wholly owned subsidiary and sole asset of the Corporation.
Financial Condition
Loan continued strong growth in the third quarter. Net increases in loans were
$6,113,000 of $9,985,000 net increases in loan for the nine months ended
September 30, 1996. The loan to deposits ratio was 74.8% on September 30,
1996. During the third quarter growth was funded by a net decrease in the
securities portfolio of $462,000, net increases in deposits of $610,000, cash
provided by operating activities of $558,000 and decreases of cash and cash
equivalents of $4,630,000. For the nine months ended September 30, 1996, cash
and cash equivalents declined $4,112,000 to fund the loan growth.
Results of Operations
Net interest income on a Federal Tax Equivalent (FTE) basis reached 4.83% of
average assets during the third quarter. Net income to average assets was
1.66% for the quarter. The improvement of net interest income to average assets
from 4.73% in the second quarter was a result of the increased loans to
deposits ratio as rates remained relatively stable. The interest spread
changed from 4.20% (FTE) in the second quarter to 4.22% (FTE) in the third
quarter. Provision for loan losses remained at .07% of average asset during
the quarter. Other income was 1.12% of average assets, and Other expense
was 3.08% of average assets.
Capital
The Bank continues to retain earnings to increase capital. The moderate growth
in total assets contributes to increasing capital ratios.
Risk
Past due and non-performing loans ratios remain at low levels. Loans past due
90 days or more and still accruing totaled .03% of gross loans on September 30,
1996. On the same date, total non-performing loans totaled .44% of gross
loans. The Bank's Total Risk Based Capital Ratio was 19.7%, and the Tier 1 Risk
Based Capital Ratio was 18.2%.
Interest rate risk increased slightly based on the Bank's gap model. Increases
in loans that are less price sensitive than the cash equivalent assets they are
replacing resulted in increases in the Bank's liability sensitive position.
The level of risk is considered manageable and is within the Bank's
expectations and policies.
Page 6
<PAGE> 8
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 nine months ended September
30, 1996.
Page 8
<PAGE> 9
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 November 11, 1996
/s/ Joseph H. Black
-------------------------------------
Joseph H. Black, Treasurer
<PAGE> 10
Exhibit Index
-------------
<TABLE>
Exhibit No. Description
- ----------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<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> 8,615
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 350
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 47,288
<INVESTMENTS-MARKET> 47,174
<LOANS> 115,158
<ALLOWANCE> 1,797
<TOTAL-ASSETS> 174,766
<DEPOSITS> 154,071
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,343
<LONG-TERM> 0
0
0
<COMMON> 2,966
<OTHER-SE> 16,386
<TOTAL-LIABILITIES-AND-EQUITY> 174,766
<INTEREST-LOAN> 7,077
<INTEREST-INVEST> 2,090
<INTEREST-OTHER> 200
<INTEREST-TOTAL> 9,367
<INTEREST-DEPOSIT> 3,583
<INTEREST-EXPENSE> 3,583
<INTEREST-INCOME-NET> 5,784
<LOAN-LOSSES> 90
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 4,318
<INCOME-PRETAX> 3,055
<INCOME-PRE-EXTRAORDINARY> 3,055
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,205
<EPS-PRIMARY> 4
<EPS-DILUTED> 4
<YIELD-ACTUAL> 8
<LOANS-NON> 478
<LOANS-PAST> 31
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 77
<RECOVERIES> 97
<ALLOWANCE-CLOSE> 1,797
<ALLOWANCE-DOMESTIC> 20
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,777
</TABLE>
