UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______________________ to ______________________
Commission file number 0-21264
VISTA BANCORP, INC.
(Exact name of small business issuer as specified in its charter)
New Jersey 22-2870972
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
305 Roseberry Street, P.O. Box 5360, Phillipsburg, New Jersey 08865
(Address of principal executive offices) (Zip Code)
(908) 859-9500
(Issuer's telephone number, including area code)
________________________________________________________________________________
(Former name, former address and former fiscal year,
if changed since last report.)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such report), and (2)
has been subject to such filing requirements for the past 90 days. Yes _X_ No __
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes ___ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
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, 1998, there were 4,622,214 shares of $.50 par value Common
Stock outstanding.
<PAGE>
VISTA BANCORP, INC.
Form 10-Q
For the period ended June 30, 1998
Index
PAGE
Part I Financial Information
Item 1. Financial Statements:
Consolidated Balance Sheets - June 30, 1998
and December 31, 1997 3
Consolidated Statements of Income - Three Months and Six Months
Ended June 30, 1998 and 1997 4
Consolidated Statements of Changes in Shareholders' Equity -
Six Months Ended June 30, 1998 and
The Year Ended December 31, 1997 5
Consolidated Statements of Cash Flows - Six Months
Ended June, 30, 1998 and 1997 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Part II Other Information
Item 1. Legal Proceedings 20
Item 2. Changes in Securities 20
Item 3. Defaults Upon Senior Securities 20
Item 4. Submission of Matters to a Vote of Security Holders 20
Item 5. Other Information 20
Item 6. Exhibits and Reports on Form 8-K 20
2
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
CONSOLIDATED BALANCE SHEETS
Amounts in Thousands (Except Per Share and Share Data)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
-------------------------
Assets
<S> <C> <C>
Cash and cash equivalents:
Cash and due from banks $ 22,224 $ 19,195
Federal funds sold 2,950 4,190
Short-term investments 692 4,465
- -----------------------------------------------------------------------------------------------
Total Cash and Cash Equivalents 25,866 27,850
- -----------------------------------------------------------------------------------------------
Securities available for sale (Amortized cost: $184,914 and
$185,944 in 1998 and 1997, respectively) 186,466 187,746
Loans, net of unearned income:
Mortgage 136,432 132,496
Commercial 118,749 98,813
Consumer 87,234 86,180
- -----------------------------------------------------------------------------------------------
Total Loans 342,415 317,489
Allowance for loan losses (4,333) (4,148)
- -----------------------------------------------------------------------------------------------
Total Net Loans 338,082 313,341
- -----------------------------------------------------------------------------------------------
Premises and equipment 7,326 7,435
Accrued interest receivable 3,352 2,973
Other assets 4,746 4,122
- -----------------------------------------------------------------------------------------------
Total Assets $ 565,838 $ 543,467
===============================================================================================
Liabilities and Shareholders' Equity
Deposits:
Demand:
Noninterest-bearing $ 57,674 $ 52,147
Interest-bearing 75,108 74,237
Savings 130,342 123,437
Time 236,591 233,935
- -----------------------------------------------------------------------------------------------
Total Deposits 499,715 483,756
- -----------------------------------------------------------------------------------------------
Borrowed funds 13,985 8,859
Long-term debt 3,000 4,222
Accrued interest payable 1,283 1,249
Other liabilities 2,174 2,079
- -----------------------------------------------------------------------------------------------
Total Liabilities 520,157 500,165
- -----------------------------------------------------------------------------------------------
Shareholders' Equity:
Common stock: $.50 par value; shares authorized 10,000,000;
shares issued, 4,629,516 and 4,168,013 at
June 30, 1998 and December 31, 1997, respectively 2,315 2,084
Paid-in capital 23,374 14,345
Retained earnings 18,951 25,770
Treasury stock (7302 shares) (87) (87)
Accumulated other comprehensive income 1,128 1,190
- -----------------------------------------------------------------------------------------------
Total Shareholders' Equity 45,681 43,302
- -----------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $ 565,838 $ 543,467
===============================================================================================
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
3
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
Amounts in Thousands (Except Per Share and Share Data)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
----------------------- -----------------------
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans $ 7,096 $ 6,290 $ 13,746 $ 12,344
Interest on federal funds sold 76 139 180 343
Interest on short-term investments 58 25 122 53
Interest on securities:
Taxable 2,496 2,596 5,048 4,999
Nontaxable 359 216 680 414
- ------------------------------------------------------------------------------------------------------------------------------------
Total Interest Income 10,085 9,266 19,776 18,153
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Interest Expense:
Interest on deposits 4,690 4,477 9,237 8,742
Interest on borrowed funds 154 124 269 275
Interest on long-term debt 46 80 96 158
- ------------------------------------------------------------------------------------------------------------------------------------
Total Interest Expense 4,890 4,681 9,602 9,175
- ------------------------------------------------------------------------------------------------------------------------------------
Net Interest Income 5,195 4,585 10,174 8,978
- ------------------------------------------------------------------------------------------------------------------------------------
Provision for Loan Losses 195 195 390 390
- ------------------------------------------------------------------------------------------------------------------------------------
Net Interest Income After Provision for Loan Losses 5,000 4,390 9,784 8,588
- ------------------------------------------------------------------------------------------------------------------------------------
Noninterest Income:
Service charges on deposit accounts 405 406 810 813
Other service charges 219 134 375 250
Net security gains 157 4 207 100
Other income 131 94 240 172
- ------------------------------------------------------------------------------------------------------------------------------------
Total Noninterest Income 912 638 1,632 1,335
- ------------------------------------------------------------------------------------------------------------------------------------
Noninterest Expense:
Salaries and benefits 2,093 1,917 4,073 3,831
Occupancy expense 339 332 674 672
Furniture and equipment expense 483 373 961 715
Other expense 1,074 864 2,074 1,644
- ------------------------------------------------------------------------------------------------------------------------------------
Total Noninterest Expense 3,989 3,486 7,782 6,862
- ------------------------------------------------------------------------------------------------------------------------------------
Income Before Provision for Income Taxes 1,923 1,542 3,634 3,061
Provision for Income Taxes 587 491 1,128 984
- ------------------------------------------------------------------------------------------------------------------------------------
Net Income 1,336 $ 1,051 $ 2,506 $ 2,077
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings per Share (Basic and Diluted) $ 0.29 $ 0.23 $ 0.55 $ 0.46
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Average Number of Common Shares Outstanding 4,603,664 4,513,126 4,592,562 4,505,684
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
4
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
Amounts in Thousands (Except Per Share Data)
For The Year Ended December 31, 1997 and
For The Six Months Ended June 30, 1998
<TABLE>
<CAPTION>
Accumulated Total
Other Comp- Share-
Shares Common Paid-in Retained Treasury rehensive holders'
Issued Stock Capital Earnings Stock Income Equity
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996 4,085,498 $ 2,043 $13,092 $22,984 $ (7) $ 703 $ 38,815
Comprehensive Income:
Net income - 1997 -- -- -- 4,513 -- -- 4,513
Other Comprehensive Income, net of tax
Net unrealized appreciation in the
market value of securities available -- -- -- -- -- 487 487
-------
for sale, net of income taxes
Comprehensive Income: 5,000
Cash dividends - $.38 per share -- -- -- (1,727) -- -- (1,727)
Net proceeds from
issuance of common stock 82,515 41 1,219 -- -- -- 1,260
Deferred compensation -- -- 34 -- -- -- 34
Net treasury stock transactions -- -- -- -- (80) (80)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 4,168,013 $ 2,084 $14,345 $25,770 $ (87) $ 1,190 $ 43,302
Comprehensive Income:
Net income - 1998 -- -- -- 2,506 -- -- 2,506
Other Comprehensive Income, net of tax
Net unrealized depreciation in the
market value of securities available -- -- -- -- -- (62) (62)
-------
for sale, net of income taxes
Comprehensive Income: 2,444
Cash dividends - $.22 per share -- -- -- (960) -- -- (960)
Net proceeds from
issuance of common stock 43,605 22 854 -- -- -- 876
Stock dividend of 10% 417,898 209 8,149 (8,358) -- -- --
Cash in lieu of fractional shares -- -- -- (7) -- -- (7)
Deferred compensation -- -- 26 -- -- -- 26
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, June 30, 1998 4,629,516 $ 2,315 $23,374 $18,951 $ (87) $ 1,128 $ 45,681
====================================================================================================================================
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
5
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
Amounts in Thousands
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1998 1997
---------------------
<S> <C> <C>
Cash Flows From Operating Activites:
Net Income $ 2,506 $ 2,077
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 528 506
Provision for loan losses 390 390
Increase in deferred income 133 74
Increase in accrued interest receivable (379) (336)
Increase in accrued interest payable 34 170
Increase in other assets (19) (317)
Increase in other liabilities 121 105
Net amortization of premium on securities 345 156
Net security gains (207) (100)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Cash Provided By Operating Activities 3,452 2,725
- ------------------------------------------------------------------------------------------------------------------------------------
Cash Flows From Investing Activities:
Proceeds from maturities of securities available for sale 31,779 11,365
Proceeds from sales of securities available for sale 34,556 9,742
Purchases of securities available for sale (65,443) (48,566)
Net increase in loans (25,745) (14,142)
Net capital expenditures (355) (490)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Cash Used In Investing Activities (25,208) (42,091)
- ------------------------------------------------------------------------------------------------------------------------------------
Cash Flows From Financing Activities:
Net increase in demand and savings deposits 13,303 7,763
Net increase in time deposits 2,656 30,720
Net increase in borrowed funds 5,126 608
Net decrease in long-term debt (1,222) (125)
Net proceeds from issuance of common stock 876 560
Purchases of treasury stock -- (126)
Cash dividends paid (960) (818)
Cash in lieu of fractional shares (7) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Cash Provided By Financing Activities 19,772 38,582
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents (1,984) (784)
Cash and Cash Equivalents, Beginning of Period 27,850 35,582
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents, End of Period $ 25,866 $ 34,798
====================================================================================================================================
Supplemental Disclosures of Cash Flow Information:
Interest paid $ 9,568 $ 9,005
Income taxes paid 951 981
Supplemental Disclosures of Investing and Financing Activities:
Transfers from loans to other real estate owned 481 9
Net unrealized loss in the fair value of securities available for sale (251) (532)
Increase in deferred tax asset related to net unrealized
loss in the fair value of securities available for sale 189 180
Net unrealized loss in the fair value of securities available for sale,
net of income taxes (62) (352)
Deferred compensation 26 23
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
6
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
Notes to Consolidated Financial Statements
Note 1. Basis of Presentation
The accompanying consolidated financial statements of Vista Bancorp, Inc.
and its subsidiaries (Vista) reflect all adjustments and disclosures that are,
in the opinion of management, necessary for a fair presentation of interim
results. The financial information has been prepared in accordance with Vista's
customary accounting practices and has not been audited.
Certain information and footnote disclosures required under generally
accepted accounting principles have been condensed or omitted pursuant to the
Securities and Exchange Commission (SEC) rules and regulations. The preparation
of financial statements in conformity with general accepted accounting
principals requires management to make certain estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates. These interim financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in Vista's annual report for the year
ended December 31, 1997.
Results of operations for the six month period ended June 30, 1998, are not
necessarily indicative of the results to be expected for the full year.
Note 2. Recently Issued Accounting Standards
Vista adopted the Financial Accounting Standards Board (FASB) Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income"
in 1998. SFAS No. 130 provides standards for the reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. The statement defines comprehensive income as the changes
in equity of a business enterprise during the period from transactions and other
events and circumstances from nonowner sources. Other comprehensive income would
include revenues, expenses, gains and losses that under generally accepted
accounting principles are included in comprehensive income but are excluded from
net income such as foreign currency items, minimum pension liability
adjustments, and unrealized gains and losses on available for sale securities.
This statement is effective for fiscal years beginning after December 15, 1997.
Prior year financial statements, which are presented for comparative purposes,
have been reclassified.
Vista held securities classified as Available for Sale, which experienced
net unrealized losses of $251 thousand before tax during the six-month period,
ended June 30, 1998. In compliance with SFAS No. 130, the before tax and after
tax amount for this category as well as the tax benefit, is summarized below.
<TABLE>
<CAPTION>
(Amounts in thousands) Before-Tax Tax Net-of-Tax
Amount (Expense)/ Amount
Benefit
-------------------------------
<S> <C> <C> <C>
Unrealized losses on securities:
Unrealized holding losses arising during period $(458) $ 244 $(214)
Less: reclassification adjustment for gains realized in net income 207 (55) 152
----- ----- -----
Net unrealized loss
Other comprehensive income (251) 189 (62)
===== ===== =====
$(251) $ 189 $ (62)
===== ===== =====
</TABLE>
7
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
In February 1998, the FASB issued Statement No. 132; "Employer's
Disclosures about Pensions and Other Postretirement Benefits." SFAS No. 132
standardizes the disclosure requirements for pension and other postretirement
benefits. This statement requires additional information on changes in the
benefit obligations and fair values of the plan assets and eliminates certain
disclosures that are considered no longer useful. SFAS No. 132 supersedes the
disclosure requirements in FASB Statements 87, "Employer's Accounting for
Pensions", and 88, "Employers' Accounting for Settlements and Curtailments of
Defined Benefit Pension Plans and for Termination Benefits", and 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions". This
statement is effective for fiscal years beginning after December 15, 1997. The
adoption of this statement is not expected to have a material effect on the
consolidated financial statements of Vista.
Note 3. Stock Dividend
On May 15, 1998, Vista declared a 10% stock dividend to shareholders' of
record as of June 1, 1998 and payable June 10, 1998. In connection therewith,
Vista issued 417,898 shares of its common stock. Accordingly, an amount equal to
the fair market value (based on the quoted market price of the stock on May 15,
1998) of the additional shares issued has been charged to retained earnings and
credited to common stock and additional paid in capital. Earnings per share,
weighted average shares outstanding and all per share amounts have been restated
in the accompanying financial statements, to reflect this dividend.
8
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Certain statements in this Form 10-Q are forward-looking statements that
involve a number of risks and uncertainties. A discussion of these factors,
among others, which may cause actual results to differ materially from projected
results appears under "Factors That May Affect Future Results."
Factors That May Affect Future Results
General. Banking is affected, directly and indirectly, by local, domestic
and international economic and political conditions, and by government monetary
and fiscal policies. Conditions such as inflation, recession, unemployment,
volatile interest rates, tight money supply, real estate values, international
conflicts and other factors beyond the control of Vista may adversely affect the
future results of operations of Vista. Management does not expect any particular
factor to affect Vista's results of operations. A downward trend in several
areas, however, including real estate, construction and consumer spending, could
have an adverse impact on Vista's ability to maintain or increase profitability.
Therefore, there is no assurance that Vista will be able to continue its current
rates of income and growth.
Interest Rates. Vista's earnings depend, to a large extent, upon net
interest income, which is primarily influenced by the relationship between its
cost of funds (deposits and borrowings) and the yield on its interest-earning
assets (loans and investments). This relationship, known as the net interest
spread, is subject to fluctuation and is affected by regulatory, economic and
competitive factors, which influence interest rates, the volume, rate and mix of
interest-earning assets and interest-bearing liabilities, and the level of
nonperforming assets. As part of its interest rate risk management strategy,
management seeks to control its exposure to interest rate changes by managing
the maturity and repricing characteristics of interest-earning assets and
interest-bearing liabilities.
Adequacy of Allowance for Loan Losses. In originating loans, there is a
likelihood that some credit losses will occur. This risk of loss varies with,
among other things, general economic conditions, the type of loan being made,
the credit worthiness and debt servicing capacity of the borrower over the term
of the loan and, in the case of a collateralized loan, the value and
marketability of the collateral securing the loan. Management maintains an
allowance for loan losses based on, among other things, historical loan loss
experience, known inherent risks in the loan portfolio, adverse situations that
may affect the borrower's ability to repay, the estimated value of any
underlying collateral and the evaluation of current economic conditions.
Management currently believes that the allowance for loan losses is adequate,
but there can be no assurance that nonperforming loans will not increase in the
future.
Local Economic Conditions. The success of Vista is dependent, to a certain
extent, upon the general economic conditions in the geographic market served by
Vista. Although Vista expects that economic conditions will continue to be
favorable in this market, no assurance can be given that these economic
conditions will continue. Adverse changes in economic conditions in the
geographic market that Vista serves would likely impair Vista's ability to
collect loans and could otherwise have a material adverse effect on Vista's
results of operations and financial condition.
9
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
Competition. The banking industry is highly competitive, with rapid changes
in product delivery systems and in the consolidation of service providers. Many
of Vista's competitors are bigger than Vista in terms of assets and have
substantially greater technical, marketing and financial resources. Because of
their size, any of these competitors can (and do) offer products and services
that Vista does not offer. Vista is constantly striving to meet the convenience
and needs of its customers and to enlarge its customer base. No assurance can be
given that these efforts will be successful in maintaining and expanding Vista's
customer base.
Growth by Internal Expansion and Acquisition. Vista's strategy to expand
internally by establishing new branch offices is dependent on its ability to
identify advantageous branch office locations and generate new deposits and
loans from those locations that will create an acceptable level of net income
for Vista. At the same time, Vista's strategy to grow externally through
selective acquisitions of other financial institutions or branches of such
institutions is dependent on successfully identifying, acquiring and integrating
such institutions or branches. There can be no assurance Vista will be
successful in implementing its internal growth strategy or in identifying
attractive acquisition candidates, acquiring such candidates on favorable terms
or successfully integrating any acquired institutions or branches into Vista.
Federal and State Government Regulation. The operations of Vista are
heavily regulated and will be affected by present and future legislation and by
the policies established from time to time by various federal and state
regulatory authorities. In particular, the monetary policies of the Federal
Reserve Board have had a significant effect on the operating results of banks in
the past and are expected to continue to do so in the future.
Results of Operations for the periods ended June 30, 1998 and June 30, 1997
The information concerning share and per share data included in this
discussion has been restated to reflect the 10 percent stock dividend of June
1998.
For the second quarter of 1998, Vista reported a 27% or $285 thousand
increase in net income to $1.336 million, or $.29 per basic common share
compared to net income of $1.051 million or $.23 per basic common share reported
for the second quarter of 1997. For the six months ended June 30, 1998, Vista
reported a 21% increase in net income to $2.506 million or $.55 per basic common
share compared to net income of $2.077 million or $.46 per basic common share
for the comparable six month period of 1997. Common shares outstanding increased
by an average of 87 thousand shares for the period June 1997 through June 1998.
This rate of earnings growth is not expected to continue at the same pace
as that of the first half of 1998 although a 12-15% gain in net income is
believed to be achievable for the full year of 1998. The first half of 1997
contained the necessary start-up costs associated with opening three new
branches at the beginning of that year. Management had expected a twelve to
eighteen month period for the new branches to achieve a break-even point for
profitability. Management believes that deposit and loan growth derived through
the new locations have reached a break-even point and all incremental growth in
those sites will contribute positively to consolidated results in the future.
10
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
The increase in net income for the second quarter was due primarily to a 13% or
$610 thousand increase in net interest income. Interest-earning assets increased
8% to average $536 million for the second quarter of 1998 compared to $492
million in the second quarter of 1997 and the net interest margin widened 20
basis points to 4.01% from 3.81% one-year earlier.
Gains on the sale of securities contributed $153 thousand more to pre-tax
income during the quarter and noninterest income reflected growth of $121
thousand or 19% compared to the second quarter of 1997. The increase in these
revenue sources was offset by a $503 thousand or 14% increase in noninterest
expense. Earnings also benefited from a lower effective tax rate of 30.5% in the
second quarter compared to 31.8% in the second quarter of 1997.
The increase in net income for the first six months of 1998 was due
primarily to a 13% or $1.196 million increase in net interest income.
Interest-earning assets increased 8% to average $528 million for the first half
of 1998 compared to $487 million in the first six months of 1997 and the net
interest margin widened 22 basis points to 4.01% from 3.79%. Gains on the sale
of securities contributed $107 thousand more to pre-tax income during the first
half of 1998 and noninterest income reflected growth of $190 thousand or 15%
compared to 1997. The increase in these revenue sources was offset by a $920
thousand or 13% increase in noninterest expense. First half earnings also
benefited from a lower effective tax rate of 31.0% compared to 32.2% in 1997.
Return on average shareholders' equity increased to 12.12% for the second
quarter of 1998 from 10.93% for the comparable quarter one-year ago, while
return on average assets increased to .95% from .81% for the same periods.
Return on average shareholders' equity for the first six months of 1998
increased to 11.46% compared to 10.75% in 1997 and return on average assets
increased to .91% for the first half of 1998 compared to .81% earned in the
first half of 1997.
The return on average equity has been influenced by the branch expansion
program launched in December 1996 which doubled the number of branch sites (from
2 to 4) of Twin Rivers Community Bank. In addition, strong participation from
shareholders' in the various stock plans has contributed significant amounts of
added capital flows. The return on average equity is expected to increase as the
incremental capital is leveraged over time.
Net Interest Income
Tax-equivalent net interest income amounted to $5.4 million for the second
quarter of 1998, an increase of approximately $800 thousand, or 17%, compared to
$4.6 million earned in the second quarter of 1997. For the first six months of
1998, tax-equivalent net interest income totaled $10.5 million, an increase of
approximately $1.4 million or 15.4% compared to $9.1 million for the comparable
period of 1997.
The net interest margin, which is tax-equivalent net interest income
expressed as a percentage of average interest-earning assets, averaged 4.01% for
the second quarter of 1998 compared to 3.81% for the second quarter of 1997. For
the first six months of 1998 the net interest margin averaged 4.01% compared to
3.79% the prior year.
11
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
Tax-equivalent interest income amounted to $10.3 million for the second
quarter of 1998, reflecting an increase of approximately $900 thousand, or 10%,
compared to $9.4 million for the second quarter of 1997. The increase in
interest income was due to a higher volume of average interest-earning assets
and a more profitable asset mix, which together, increased interest income by
approximately $966 thousand while lower yields reduced interest income by $64
thousand. The average yield on interest-earning assets increased by 10 basis
points to 7.67% for the second quarter of 1998 compared to 7.57% for the second
quarter of 1997. Tax-equivalent interest income for the first half of 1998
increased $1.8 million or 10% to $20.1 million from $18.3 million in the
comparable first half of 1997. Yields on interest-earning assets averaged 7.67%
for the first half of 1998 compared to 7.59% for the similar period of 1997.
Interest expense amounted to $4.9 million for the second quarter of 1998,
an increase of approximately $200 thousand, or 4%, compared to $4.7 million in
the second quarter of 1997.
The increase is due primarily to a higher volume of average
interest-bearing liabilities which increased interest expense by approximately
$250 thousand while lower rates paid for deposits reduced interest expense by
$50 thousand. The average cost of funds on interest-bearing liabilities declined
by 9 basis points to 4.23% for the second quarter of 1998 compared to 4.32% for
the second quarter of 1997. Interest expense for the first half of 1998
increased approximately $400 thousand or 4% to $9.6 million from $9.2 million in
the comparable first half of 1997. The cost of funds for the first half of 1998
averaged 4.24%, a decrease of 6 basis points from the average cost of funds of
4.30% reported for the comparable period of 1997, as customers shift balances
into checking and savings accounts in periods of low or declining interest
rates.
The table, "Consolidated Average Balances, Net Interest Income and Average
Rates," presents Vista's average assets, liabilities and shareholders' equity.
Vista's net interest income, net interest spreads and net interest income as a
percentage of interest-earning assets for the periods ended June 30, 1998 and
1997, are also reflected.
The table, "Volume/Rate Analysis of Changes in Net Interest Income,"
analyzes net interest income by segregating the volume and rate components of
the changes in net interest income resulting from changes in the volume of
various interest-earning assets and interest-bearing liabilities and the changes
in the rates earned and paid by Vista.
12
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
Consolidated Average Balances, Net Interest Income and Average Rates
(Tax-equivalent Basis)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1998 1997
--------------------------------------------------------------
Average Average Average Average
Amounts in Thousands (Except Percentages) Balances Interest Rates Balances Interest Rates
(1) (2) (3) (1) (2) (3)
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Federal funds sold and securities purchased $ 6,490 $ 180 5.59% $ 12,748 $ 343 5.43%
under agreements to resell
Short-term investments 4,731 122 5.20% 2,047 53 5.22%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Short-term Investments 11,221 302 5.43% 14,795 396 5.40%
- ------------------------------------------------------------------------------------------------------------------------------------
Securities:
U.S. Treasury 17,029 520 6.16% 23,135 697 6.08%
U.S. Government agencies and corporations 125,284 4,041 6.50% 112,261 3,874 6.96%
States and other political subdivisions 29,438 976 6.69% 18,190 563 6.24%
Other 15,620 488 6.30% 12,908 428 6.69%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Securities 187,371 6,025 6.48% 166,494 5,562 6.74%
- ------------------------------------------------------------------------------------------------------------------------------------
Loans, net of unearned income: (4)
Mortgage 134,725 5,088 7.62% 140,531 5,310 7.62%
Commercial 107,579 5,124 9.60% 83,516 3,786 9.14%
Consumer 87,189 3,557 8.23% 81,304 3,265 8.10%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Loans 329,493 13,769 8.43% 305,351 12,361 8.16%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Interest-earning Assets 528,085 20,096 7.67% 486,640 18,319 7.59%
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and due from banks 17,160 16,232
Allowance for loan losses (4,237) (3,884)
Other assets 14,972 15,397
- ------------------------------------------------------------------------------------------------------------------------------------
Total Noninterest-earning Assets 27,895 27,745
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets $ 555,980 $514,385
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand $ 76,078 $ 819 2.17% $ 70,929 $ 757 2.15%
Savings 126,604 1,915 3.05% 115,373 1,843 3.22%
Time 194,920 5,271 5.45% 194,933 5,259 5.44%
Time deposits $100,000 and over 44,017 1,232 5.64% 32,219 883 5.53%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Interest-bearing Deposits 441,619 9,237 4.22% 413,454 8,742 4.26%
- ------------------------------------------------------------------------------------------------------------------------------------
Borrowed funds 12,142 269 4.47% 12,280 275 4.52%
Long-term debt 3,088 96 6.27% 4,465 158 7.14%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Borrowed Funds and Long-term Debt 15,230 365 4.83% 16,745 433 5.21%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Interest-bearing Liabilities 456,849 9,602 4.24% 430,199 9,175 4.30%
- ------------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing demand deposits 51,730 41,556
Other liabilities 3,311 3,681
- ------------------------------------------------------------------------------------------------------------------------------------
Total Noninterest-bearing Liabilities 55,041 45,237
- ------------------------------------------------------------------------------------------------------------------------------------
Shareholders' Equity 44,090 38,949
- ------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $ 555,980 $ 514,385
- ------------------------------------------------------------------------------------------------------------------------------------
Net Interest Income/Spread (tax-equivalent basis) 10,494 3.43% 9,144 3.29%
- ------------------------------------------------------------------------------------------------------------------------------------
Tax-equivalent Basis Adjustment (320) (166)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Interest Income $10,174 $ 8,978
- ------------------------------------------------------------------------------------------------------------------------------------
Net Interest Margin (5) 4.01% 3.79%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Average volume information was computed using approximate daily averages.
(2) Interest on loans includes fee income.
(3) Rates have been annualized and computed on a tax-equivalent basis using the
federal income tax statutory rate of 34%.
(4) Includes nonaccrual loans.
(5) Net interest income as a percent of average interest-earning assets on a
tax-equivalent basis.
13
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
Volume/Rate Analysis of Changes in Net Interest Income (Tax-equivalent Basis)
Amounts in Thousands
<TABLE>
<CAPTION>
Six Months Ended June 30,
1998 vs. 1997
--------------------------------------
Increase (Decrease)
Due to Changes in:
--------------------------------------
Total Average Average
Change(1) Volume Rate
--------------------------------------
<S> <C> <C> <C>
Interest Income
Federal funds sold $ (163) $ (174) $ 11
Short-term investments 69 69 --
- ---------------------------------------------------------------------------------------------------------------------
Total Short-term Investments (94) (105) 11
- ---------------------------------------------------------------------------------------------------------------------
Securities:
U.S. Treasury (177) (186) 9
U.S. Government agencies and corporations 167 430 (263)
States and other political subdivisions 413 370 43
Other 60 86 (26)
- ---------------------------------------------------------------------------------------------------------------------
Total Securities 463 700 (237)
- ---------------------------------------------------------------------------------------------------------------------
Loans, net of unearned income:(2)
Mortgage (222) (219) (3)
Commercial 1,338 1,138 200
Consumer 292 239 53
- ---------------------------------------------------------------------------------------------------------------------
Total Loans 1,408 1,158 250
- ---------------------------------------------------------------------------------------------------------------------
Total Interest Income 1,777 1,753 24
- ---------------------------------------------------------------------------------------------------------------------
Interest Expense
Interest-bearing liabilities:
Demand 62 55 7
Savings 72 174 (102)
Time 12 -- 12
Time deposits $100,000 and over 349 330 19
- ---------------------------------------------------------------------------------------------------------------------
Total Interest-bearing Deposits 495 559 (64)
- ---------------------------------------------------------------------------------------------------------------------
Borrowed funds (6) (3) (3)
Long-term debt (62) (45) (17)
- ---------------------------------------------------------------------------------------------------------------------
Total Borrowed Funds and Long-term Debt (68) (48) (20)
- ---------------------------------------------------------------------------------------------------------------------
Total Interest Expense 427 511 (84)
- ---------------------------------------------------------------------------------------------------------------------
Net Interest Income (tax-equivalent basis) $ 1,350 $ 1,242 $ 108
=====================================================================================================================
</TABLE>
(1) The volume/rate variance is allocated based on the percentage relationship
of changes in volume and changes in rate to the "Total Change."
(2) Includes nonaccrual loans.
14
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
Noninterest Income
For the second quarter of 1998, total noninterest income increased 43% or
$274 thousand to $912 thousand from $638 thousand in the second quarter of 1997.
Excluding the effect of security transactions in both periods, noninterest
income increased 19% to $755 thousand from $634 thousand in the second quarter
one year earlier.
For the first half of 1998, total noninterest income increased 22% or $297
thousand to $1.63 million from the $1.34 million earned in the first half of
1997. Adjusting for the effects of security gains, total noninterest income from
core banking operations increased 15% or $190 thousand to $1.425 million from
$1.235 million earned during the first half of 1997.
Revenues from service charges on deposit accounts equaled $405 thousand for
the second quarter, which was unchanged from the $406 thousand reported for the
second quarter one-year earlier. Service charge revenue for the first half of
1998 totaled $810 thousand was also largely unchanged from the $813 thousand
earned in the similar period of 1997. Increased fees earned from nonsufficient
funds (NSF) on personal checking accounts were offset entirely by a lower level
of fees earned on commercial transaction accounts.
Other service charge revenues increased 63% or $85 thousand to $219
thousand for the second quarter compared to $134 thousand recorded for the
comparable quarter of 1997. Strong loan origination activity translated into
growth in fees collected from third party originators, increased servicing fee
revenues from a growing servicing portfolio and higher real estate appraisal fee
income. Total other service charge revenues increased 50% or $125 thousand to
$375 thousand for the first half of 1998 compared to $250 thousand recorded for
the similar period in 1997.
For the second quarter of 1998, other income increased 39% or $37 thousand
to $131 thousand from $94 thousand in the second quarter of 1997. The majority
of the increase was attributable to growth in fees recognized on the sale of
mutual funds and insurance products, interchange fees from debit cards and a
one-time gain of $15 thousand on the sale of a student loan portfolio. On a
year-to-date basis, other income increased 40% or $68 thousand to $240 thousand
from $172 thousand in the first half of 1997.
Net security gains recognized during the second quarter of 1998 equaled
$157 thousand on $27 million of securities sold. In comparison, net gains
recognized in the second quarter of 1997 totaled $4 thousand on $5 million of
securities sold. For the first half of 1998, net security gains recognized
totaled $207 thousand on $35 million of securities sold compared to $100
thousand in net gains recognized on $10 million of sales during the first half
of 1997.
Noninterest Expense
Noninterest expense totaled $3.99 million in the second quarter, an
increase of $503 thousand or 14% higher than the $3.49 million reported for the
second quarter of 1997. The efficiency ratio declined to 65.2% from 65.7% the
prior year. For the first six months of 1998, noninterest expense totaled $7.78
million, an increase of $920 thousand or 13% higher than the comparable period
of 1997. The efficiency ratio for the first six months of 1998 equaled 65.3%
compared to 66.1% the prior year.
15
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
Salary and benefits expense totaled $2.09 million for the second quarter,
an increase of $176 thousand or 9% compared to the second quarter of 1997. The
increase was due to increased staff levels to support growth in retail banking,
commercial lending and technical support staff as well as annual merit increases
and higher accruals for performance-based incentive accruals. Vista intends to
link a greater portion of its future compensation structure to performance-based
incentives for its officer staff as a means to strengthen the link between
performance and compensation to increase profitability. Offsetting the increase
in higher staff costs were lower expense accruals for postretirement benefits
and pension income benefits.
Occupancy expense totaled $339 thousand for the second quarter that was
substantially unchanged from the $332 thousand in occupancy expense for the
second quarter of 1997. For the first six months of 1998 occupancy expense
totaled $674 thousand which was unchanged from the $672 thousand reported for
the same period of 1997.
Furniture and equipment expense totaled $483 thousand for the second
quarter, an increase of $110 thousand or 29% higher than the $373 thousand
reported for the second quarter of 1997. The increase is attributable to higher
telecommunication charges to support the new 24-hour telephone banking system,
increased lease charges associated with a new mainframe operating system as well
as higher depreciation expense for new technology upgrades and enhancements.
For the first six months of 1998, furniture and equipment expense totaled
$961 thousand, an increase of $246 thousand or 34% higher than the $715 thousand
reported for the first half of 1997. This increase may be attributed to the
24-hour telephone banking system, the new mainframe lease and maintenance
expense; as well as, additional depreciation expense related to technology
upgrades. Equipment licensing and servicing agreements for both computer
hardware and software contributed significantly to this increase.
Other expense, which consists primarily of legal and professional fees,
marketing and business development expenses and all other expenses totaled
$1.074 million for the second quarter, an increase of $210 thousand or 24%
higher than the $864 thousand the prior year. The increase was attributable to a
write-down of $80 thousand for an OREO property, increased loan-related expenses
tied directly to the strong loan growth experienced during the second quarter
and higher expenses related to marketing, business development, training and
education.
Total other expense for the first six months of 1998 equaled $2.07 million,
an increase of $430 thousand or 26% higher than the $1.64 million the prior
year. This increase was influenced by several factors: a write-down of an OREO
property for $80 thousand, NASDAQ National Market listing and entry fees of $66
thousand and professional fees of $10 thousand. In addition, significantly
higher marketing expenditures added incremental costs of $154 thousand in 1998
over 1997. Such expenditures were instrumental in the growth experienced in
loans and deposits as well as the introduction and rollout of 24-hour telephone
banking access and alternative investment programs that include mutual funds and
insurance products. The increase also included higher consulting costs to assist
in the areas of hardware maintenance and support, in addition to providing
expertise in client-server network support. The engagement concluded during the
second quarter of 1998. None of the increase in other operating expense was
related to Year 2000 compliance issues.
16
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
Readiness for Year 2000
The Year 2000 issue involves preparing computer systems and programs to
identify the arrival of January 1, 2000. In the past computer programs allocated
only two digits to a year, i.e., 1998 was represented as 98. Given this
programming, the year 2000 would be confused with that of 1900. The Year 2000
issue not only impacts computer hardware and software, but all equipment that
utilizes processors or computer microchips.
Vista Bancorp is addressing the impact of the Year 2000 on its operations
and the consequences for its customers. Vista has established a Year 2000
Project Team consisting of representatives from all functional areas to assess
the nature and magnitude of the problem, to identify resource needs, and develop
contingency plans. Vista intends to work with its vendors to obtain
certifications of Year 2000 compliance, and failing such certifications, to
obtain alternative software, hardware and support services as appropriate.
Furthermore, Vista plans to work with its significant borrowers to ensure they
are taking appropriate steps to become Year 2000 compliant.
Vista expects to have all mission critical systems and infrastructure
issues identified and certified Year 2000 compliant by December 31, 1998,
thereby permitting additional integrated testing throughout the year 1999.
Vista, however, continues to bear some risk related to the Year 2000 issue
and could be adversely affected, if other entities (i.e., vendors) do not
appropriately address their own compliance issues.
Vista continues to evaluate the estimated costs associated with attaining
Year 2000 readiness. Incremental costs for 1998, such as testing, software
purchases and marketing publications are expected to range from $50 thousand to
$100 thousand. While additional costs will be incurred, Vista believes, based on
available information, that it will be able to manage its Year 2000 transition
without any adverse effect on business operations or financial condition.
17
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
Financial Condition - June 30, 1998 versus December 31, 1997
At June 30, 1998, consolidated total assets equaled $566 million, which
represented an increase of approximately $23 million from $543 million in
consolidated total assets at December 31, 1997.
Securities available for sale totaled $186.5 million at June 30, 1998
compared to the $187.7 million in securities available for sale at year-end
1997. The portfolio is comprised of 58% fixed and variable rate mortgage-backed
securities with pass-through, balloon and adjustable-rate structures, 15% in
U.S. Government and Federal agency debt instruments, 18% in tax-exempt
securities and the balance in other securities. The portfolio activity during
the first half of 1998 included $65 million of purchases, $35 million of sales
and $32 million of maturities. The composition of the average investment
portfolio during 1998 reflects a shift toward tax-exempt investment securities
in order to mitigate the prepayment risk on mortgage-related securities and to
lower the effective corporate tax rate.
Total loans equaled $342 million at June 30, 1998, reflecting an increase
of approximately $25 million or 8% over the $317 million in total outstanding
loans at year-end 1997. This increase occurred in commercial loans and was
consistent with Vista's objective to lessen its concentration in mortgage loans
and diversify the portfolio mix while improving yields and profitability by
increasing its concentration in consumer and small business lending. At June 30,
1998, Vista's loan to deposit ratio was 68.5% compared to 65.6% at December 31,
1997. Mortgage loans equaled 40% of total loans outstanding as of June 30, 1998
and 42% at December 31, 1997. Commercial loans totaled 35% and consumer loans
equaled 25% of total loans outstanding at June 30, 1998 compared to 31% and 27%
at December 31, 1997, respectively.
Total deposits equaled $500 million at June 30, 1998, reflecting an
increase of approximately $16 million or 3% in total deposits compared to $484
million at year-end 1997. Deposit growth was experienced in non-interest bearing
demand accounts and savings accounts. Variable-rate tiered savings products with
money market rates are offered to customers who maintain high balances and have
proven successful in attracting retail deposits. Growth in noninterest-bearing
demand deposits is consistent with the strategy to grow commercial borrowing
relationships.
At June 30, 1998, time deposits, including those $100 thousand and over,
remained the largest component of the total deposit base, equaling 47% compared
to 48% at year-end 1997. Interest-bearing demand accounts equaled 15% of total
deposits at June 30, 1998 and December 31, 1997. Non-interest bearing demand
accounts totaled 12% of total deposits at June 30, 1998 and 11% of total
deposits at December 31, 1997. Savings accounts equaled 26% of total deposits at
June 30, 1998 and at year-end 1997.
Total borrowed funds and long-term debt equaled $17 million at June 30,
1998, an increase of $4 million compared to $13 million outstanding at December
31, 1997.
18
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
Nonperforming Assets
Nonperforming assets, consisting of loans on nonaccrual status plus other
real estate acquired through foreclosure (ORE), totaled $3.6 million at June 30,
1998 and $4.3 million at December 31, 1997, or 1.04% and 1.34% of total
outstanding loans and ORE, respectively. The decrease in the ratio was due to a
decrease in the amount of nonperforming loans and ORE outstanding as well as the
increase in total loans outstanding. ORE declined to $1.1 million at June 30,
1998 compared to $1.4 million at December 31, 1997.
The allowance for loan losses equaled $4.3 million or 1.26% of total loans
plus ORE at June 30, 1998, compared to $4.1 million and 1.30% at year-end 1997.
Net charge-offs to the reserve for the six months ended June 30, 1998 totaled
$205 thousand. Commercial loan charge-offs totaled $135 thousand and consumer
loan charge-offs equaled $122 thousand for the six months ended June 30, 1998.
The provision for loan losses remained unchanged at $195 thousand for the
second quarter of 1998 and comparable quarter in 1997. For the first half of
1998 and 1997 the provision for loan losses totaled $390 thousand. At June 30,
1998, the allowance for loan losses represented 178% of total nonaccrual loans
as compared to 142% at December 31, 1997.
Liquidity
At June 30, 1998, cash and cash equivalents equaled $25.8 million which
represented a decrease of $2 million from the $27.8 million in cash and cash
equivalents at December 31, 1997. Changes in cash are measured by changes in
operating, investing and financing activities. The $2 million decrease in cash
and cash equivalents was attributable to combined net cash flows provided by
operating and financing activities totaling $23.2 million, which were then used
for investing activities of $25.2 million.
At June 30, 1998, net cash provided by operating activities equaled $3.4
million, which consisted mainly of net income adjusted for noncash charges. Net
cash provided by financing activities totaled approximately $19.8 million and
consisted of a $15.9 million increase in deposits, a $5.1 million increase in
borrowed funds and a $1.2 million reduction in long term debt.
Capital Resources
At June 30, 1998, total shareholders' equity equaled $45.7 million
representing an increase of $2.4 million from $43.3 million in shareholders'
equity at December 31, 1997. This increase was due to $2.5 million in net income
and $876 thousand in added capital raised through the various stock plans,
offset in part by a $62 thousand reversal in the market value adjustment
recorded for the available for sale portfolio and cash dividends paid of $960
thousand. The dividend payout ratio equaled 38.3% for the first six months of
1998.
Vista maintained a Tier I risk-based capital ratio of 13.39% and a total
risk-based capital ratio of 14.65% at June 30, 1998, compared to 13.58% and
14.99%, respectively, at December 31, 1997. Vista maintained a leverage capital
ratio of 7.93% at June 30, 1998 and 7.61% at December 31, 1997.
19
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
- ------------------------------------
Part II Other Information
Item 1. Legal Proceedings Not Applicable
Item 2. Changes 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 required by Item 601 of Regulation S-K:
Exhibit Number Description of Exhibit
-------------- ----------------------
2 Not Applicable
4 Not Applicable
10 Not Applicable
11 Not Applicable
15 Not Applicable
18 Not Applicable
19 Not Applicable
22 Not Applicable
23 Not Applicable
24 Not Applicable
27 Financial Data Schedules
99 Not Applicable
(b) Reports on Form 8-K
The registrant filed the following report on Form 8-K for
the quarterly period ended June 30, 1998:
On May 15, 1998, the registrant reported on Form 8-K that
the directors approved the declaration and payment of a ten
percent (10%) stock dividend on its outstanding common stock
payable on June 10, 1998, to holders of record as of the
close of business on June 1, 1998.
20
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Vista Bancorp, Inc.
- ----------------------------
(Registrant)
Dated: August 12, 1998
By /s/ William F. Keefe
-------------------------------
William F. Keefe
Executive Vice President and
and Chief Financial Officer
(Mr. Keefe is the Principal
Accounting Officer and has
been duly authorized to sign
on behalf of the registrant.)
21
<PAGE>
INDEX TO EXHIBITS
Item Number Description Page
- ----------- ----------- ----
27 Financial Data Schedules ........................ 23
22
<TABLE> <S> <C>
<ARTICLE> 9
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-START> JAN-01-1998
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 22,224
<INT-BEARING-DEPOSITS> 692
<FED-FUNDS-SOLD> 2,950
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 186,466
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 342,415
<ALLOWANCE> 4,333
<TOTAL-ASSETS> 565,838
<DEPOSITS> 499,715
<SHORT-TERM> 13,985
<LIABILITIES-OTHER> 3,457
<LONG-TERM> 3,000
0
0
<COMMON> 2,315
<OTHER-SE> 43,366
<TOTAL-LIABILITIES-AND-EQUITY> 565,838
<INTEREST-LOAN> 13,746
<INTEREST-INVEST> 5,728
<INTEREST-OTHER> 302
<INTEREST-TOTAL> 19,776
<INTEREST-DEPOSIT> 9,237
<INTEREST-EXPENSE> 9,602
<INTEREST-INCOME-NET> 10,174
<LOAN-LOSSES> 390
<SECURITIES-GAINS> 207
<EXPENSE-OTHER> 7,782
<INCOME-PRETAX> 3,634
<INCOME-PRE-EXTRAORDINARY> 3,634
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,506
<EPS-PRIMARY> 0.55
<EPS-DILUTED> 0.55
<YIELD-ACTUAL> 4.01
<LOANS-NON> 2,430
<LOANS-PAST> 110
<LOANS-TROUBLED> 284
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4,148
<CHARGE-OFFS> 257
<RECOVERIES> 52
<ALLOWANCE-CLOSE> 4,333
<ALLOWANCE-DOMESTIC> 4,333
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,098
</TABLE>
