<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
.........................................
FORM 10-QSB
(Mark one)
X Quarterly report pursuant to Section 13 or 15 (d) of the Securities
---------
Exchange Act of 1934 for the quarterly period ended September 30, 1996 or
____________ Transition report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934 for the transition period from__________ to
- ---------.
Commission file number 0-17099
------------------------------
HOME PORT BANCORP, INC.
---------------------------------------------------------------
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
Delaware 04-3016821
----------------------------- ------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
104 Pleasant Street
Nantucket, Massachusetts 02554
- -------------------------------------- ------------
(Address of principal executive office) (Zip Code)
(508) 228-0580
----------------------------------------------
(Issuer's telephone number, including area code)
Not applicable
-------------------------------------------------------------------------
(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 reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
----------- ---------.
The number of shares outstanding of each of the registrant's classes of common
stock as of June 30, 1996:
Common Stock $.01 par value 1,841,890
- ----------------------------- -----------------
(Title of Class) (Shares Outstanding)
Transitional Small Business Disclosure Format (check one)
Yes No X
--------- -----------.
1
<PAGE>
HOME PORT BANCORP, INC.
INDEX
PART I - FINANCIAL INFORMATION Page No.
----------
Consolidated Balance Sheet at September 30, 1996
and December 31, 1995 3
Consolidated Statement of Earnings for the three months
and nine months ended September 30, 1996 and 1995. 4
Consolidated Statement of Changes in Stockholders' Equity
at September 30, 1996 5
Consolidated Statements of Cash Flows for the nine months
ended September 30, 1996 and 1995 6
Notes to Consolidated Financial Statements 7-10
Management's Discussion and Analysis of Financial Condition
and Results of Operation 11-13
PART II - OTHER INFORMATION 14
Signatures 15
2
<PAGE>
HOME PORT BANCORP, INC.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
(In Thousands, Except Per Share Data) September 30, December 31,
1996 1995
--------------------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 5,553 $ 4,886
Federal funds sold and interest bearing deposits in banks 6,434 1,750
---------------------
Total cash and cash equivalents 11,987 6,636
Securities held to maturity (market value $15,348 and $18,089) (note 2) 15,587 18,330
Securities available for sale (amortized cost of $7,456 and $7,681) (note 2) 7,377 7,695
Loans, net of allowance for possible loan losses of $2,311 and $2,249 (note 3) 143,793 120,540
Loans held for sale 4,073 8,607
Other real estate owned 65 -
Land, buildings and equipment, net 1,452 1,244
Accrued income receivable 1,084 1,104
Net deferred tax asset 133 85
Stock in FHLB-Boston, at cost 2,321 2,321
Prepaid expenses and other assets 775 710
---------------------
Total assets $188,647 $167,272
=====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits (Note 4) $138,022 $114,357
Borrowed funds 29,639 32,837
Accrued expenses 1,197 1,106
Other liabilities 156 593
---------------------
Total liabilities 169,014 148,893
---------------------
Commitments and contingencies (notes 3 a nd 5)
Stockholders' equity
Preferred stock, $.01 par value, 2,000, 000 shares authorized, none issued - -
Common stock, $.01 par value, 1 0,000,000 shares authorized, 2,325,494
shares issued 23 23
Additional paid-in capital 17,473 17,473
Retained earnings 6,581 5,271
Unrealized gain (loss) on securities available for sale, net of taxes (note 2) (47) 9
Less: Treasury stock, at cost (483,604 shares) (4,397) (4,397)
Total stockholders' equity 19,633 18,379
---------------------
Total liabilities and stockholders' equity $188,647 $167,272
=====================
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
3
<PAGE>
HOME PORT BANCORP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
<TABLE>
<CAPTION>
(In Thousands, Except Share and Per Three Month Ended Nine Month Ended
Share Data) September 30, September 30,
------------------- -------------------
1996 1995 1996 1995
------------------- ------------------
<S> <C> <C> <C> <C>
Interest and dividend income:
Interest on loans $3,311 $2,937 $ 9,504 $8,372
Interest on securities 337 405 1,016 1,219
Dividends 40 42 117 121
Federal funds sold and interest
bearing deposits 29 45 47 78
---------------- -----------------
Total interest and dividend income 3,717 3,429 10,684 9,790
---------------- -----------------
Interest expense:
Interest on depositors' accounts 1,105 966 3,081 2,686
Interest on borrowed funds 505 555 1,596 1,816
---------------- -----------------
Total interest expense 1,610 1,521 4,677 4,502
---------------- -----------------
Net interest and dividend income 2,107 1,908 6,007 5,288
Provision for possible loan losses 38 - 38 -
---------------- -----------------
Net interest and dividend income
after provision for possible
loan losses 2,069 1,908 5,969 5,288
Non interest income:
Deposit servicing fees 87 78 259 232
Loan servicing fees 62 61 216 165
Other fees and income 63 76 188 245
Net gain (loss) from sale of
mortgage loans - 6 (9) 19
Net gain (loss) from securities - - - (3)
---------------- -----------------
Total non interest income 212 221 654 658
---------------- -----------------
Non interest expense:
Salaries and employee benefits 575 494 1,668 1,451
Building and equipment expenses 129 109 362 297
Loss (gain) on other real estate
owned - 5 - 9
Deposit insurance fees 5 (4) 12 139
Professional fees 58 66 226 168
Other 256 242 705 640
---------------- -----------------
Total non interest expense 1,023 912 2,973 2,704
---------------- -----------------
Income before income taxes 1,258 1,217 3,650 3,242
Provision for income taxes (note 6) 489 450 1,418 1,273
Net Income $ 769 $ 767 $ 2,232 $1,969
================ =================
Earnings per common share $0.42 $0.42 $1.21 $1.07
================ =================
Weighted number of common shares
outstanding 1,842 1,842 1,842 1,842
================ =================
</TABLE>
See accompanying notes to unaudited consolidated financial statements
4
<PAGE>
HOME PORT BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
(In Thousands)
Net
Unrealized
Gain
(Loss) on
Additional Securities Total
Common Paid-in Retained Treasury Available Stockholders'
Stock Capital Earnings Stock For Sale Equity
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $23 $17,473 $ 5,462 $(4,397) $(37) $18,524
Change in unrealized loss on securities
available for sale - - - - 46 46
Cash dividends paid at $.60 per share - - (1,105) - - (1,105)
Special dividend paid at $1.00 per share - - (1,842) - - (1,842)
Net income - - 2,756 - - 2,756
--------------------------------------------------------------------------
Balance at December 31, 1995 23 17,473 5,271 (4,397) 9 18,379
Change in unrealized loss on securities
available for sale - - - - (56) (56)
Cash dividends paid at $ .50 per share - - (922) - - (922)
Net income - - 2,232 - - 2,232
--------------------------------------------------------------------------
Balance at September 30, 1996 $23 $17,473 $6.581 $(4,397) $(47) $19,633
==========================================================================
</TABLE>
See accompanying notes to unaudited consolidated financial statements
5
<PAGE>
HOME PORT BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
(In Thousands)
Nine Months Ended
September 30,
--------------------------
1996 1995
--------------------------
<S> <C> <C>
Net cash flows from operating activities:
Net income $ 2,232 $ 1,969
Adjustments to reconcile netincome to net cash provided by operating
activities:
Net (increase) decrease in accrued income receivable 20 (240)
Net increase (decrease) in accrued expenses 91 170
Net amortization of securities premiums (accretion of discounts) 73 (71)
(Gain) Loss from other real estate owned - 9
Net (increase) decrease in loans held for sale 4,525 1,390
Amortization of deferred loan origination fees (196) (235)
Depreciation of building and equipment 159 132
Net (increase) decrease in prepaid expenses and other assets (65) (105)
Net increase (decrease) in other liabilities (437) 191
Deferred income taxes (11) 22
Net loss (gain) on securities and other assets - (3)
Provision for loan losses 38 -
Net (gain) loss on sale of mortgage loans 9 19
--------------------------
Net cash provided by (used for) operating activities 6,438 3,248
--------------------------
Cash flows from investing activities
Purchases of securities held to maturity - -
Purchases of securities available for sale (2,496) (4,972)
Proceeds from sales of securities available for sale - 573
Proceeds from maturities of securities 4,430 4,575
Principal payments on mortgage-backed securities 961 935
Net (increase) decrease in loans (23,160) (10,020)
Purchases of land, buildings and equipment (367) (415)
Proceeds from the sales of other real estate owned - 401
Purchase of Federal Home Loan Bank stock - (607)
--------------------------
Net cash provided by (used for) investing activities (20,632) (9,530)
--------------------------
Cash flows from financing activities:
Net increase (decrease) in deposits 23,665 14,099
Federal Home Bank advances 11,000 6,900
Federal Home Loan Bank repayments (13,199) (7,999)
Net (decrease) increase in short term borrowings (999) (4,500)
Cash dividends paid (922) (5,433)
--------------------------
Net cash provided by (used for) financing activities 19,545 3,067
--------------------------
Net (decrease) increase in cash and cash equivalents 5,351 3,215
Cash and cash equivalents at beginning of period 6,636 9,513
--------------------------
Cash and cash equivalents at end of period $ 11,987 $ 6,298
==========================
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 4,695 $ 4,490
Income taxes $ 1,353 $ 1,122
Loans foreclosed and in-substance foreclosures
transferred to other real estate owned $ 65 $ 365
Dividends declared $ 922 $ 828
Non-cash gains on sales of loans - -
See accompanying notes to unaudited consolidated financial statements
</TABLE>
6
<PAGE>
HOME PORT BANCORP, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. CONSOLIDATED FINANCIAL STATEMENTS
The unaudited consolidated financial statements of Home Port Bancorp, Inc. ("The
Company") and its wholly owned subsidiaries, Nantucket Bank ("the Bank") and
N.B. Securities, Inc. ("a Massachusetts Securities Corporation") have been
prepared in accordance with regulations of the Securities and Exchange
Commission. Certain information, required by generally accepted accounting
principles, has been condensed or omitted pursuant to such rules and
regulations. Inter-company accounts and transactions have been eliminated.
The financial statements for the periods ended September 30, 1996 and 1995 are
unaudited, but include normal recurring adjustments which management considers
necessary for a fair presentation of results. Interim results are not
necessarily indicative of the results to be expected for the entire year. It is
recommended that these statements be read in conjunction with the audited
financial statements for the year end December 31, 1995.
2. SECURITIES (in thousands)
Securities held to maturity consist of the following:
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
-------------------- -------------------
Book Market Book Market
Value Value Value Value
-------------------- -------------------
<S> <C> <C> <C> <C>
United States Government and agency $3,040 $ 2,980 $3,528 $3,521
obligations
Mortgage-backed securities 7,697 7,532 8,699 8,480
State and municipal obligations 568 566 707 702
Other bonds and notes 4,282 4,270 5,396 5,386
Total securities held to maturity $15,587 $15,348 $18,330 $18,089
==================== ===================
Securities available for sale consist
of the following:
September 30, 1996 December 31, 1995
-------------------- -------------------
Book Market Book Market
Value Value Value Value
-------------------- -------------------
United States Government and agency $ 5,051 $ 4,970 $ 4,901 $ 4,895
obligations
State and municipal obligations 801 800 807 807
Other bonds and notes 1,492 1,494 1,861 1,880
Marketable equity securities 112 113 112 113
-------------------- -------------------
Total securities available for sale $ 7,456 $ 7,377 $ 7,681 $ 7,695
==================== ===================
</TABLE>
7
<PAGE>
HOME PORT BANCORP, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
3. LOANS, NET (in thousands)
The composition of the balances of loans is as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---------------- ---------------
<S> <C> <C>
Mortgage loans:
Residential
Fixed $ 17,860 $ 15,888
Adjustable 65,760 51,632
Residential construction 18,572 17,649
Commercial 31,544 28,660
Commercial construction 6,826 2,456
-------------- --------------
Total principal balances 140,562 116,285
Less:
Due borrowers on uncompleted loans
Residential (5,260) (5,576)
Commercial (3,265) (1,213)
Deferred loan origination fees (466) (427)
-------------- --------------
Total mortgage loans 131,571 109,069
Other loans:
Commercial business 8,264 7,195
Second mortgage 1,941 2,145
Home equity 1,813 1,834
Passbook and stock secured 1,024 1,342
Consumer 1,491 1,204
-------------- --------------
Total other loans 14,533 13,720
Less: Allowance for possible loan losses (2,311) (2,249)
Loans, net $143,793 $120,540
============== ==============
</TABLE>
The Federal Home Loan Bank has a blanket lien covering residential and
commercial mortgage loans as collateral for the Bank's borrowing from the FHLB.
Effective January 1, 1996 the Bank adopted Statement of Financial Accounting
Standards ("SFAS") No. 122 "Accounting for Mortgage Servicing Rights." The
Statement requires that a mortgage banking enterprise recognize as separate
assets rights to service mortgage loans for others, regardless of how those
servicing rights are acquired. Additionally, the Statement requires that the
capitalized mortgage servicing rights be assessed for impairment based on the
fair value of those rights, and that impairment be recognized through a
valuation allowance. The adoption of this statement did not have a material
effect on the Bank's financial condition or results or operations.
8
<PAGE>
HOME PORT BANCORP, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
A summary of the transactions in the allowance for possible Nine Months Ended
loan losses is as follows: September 30,
-------------------------
1996 1995
-------------------------
<S> <C> <C>
Balance at beginning of period $ 2,249 $ 2,154
Provisions 38 -
Recoveries 126 56
Realized losses charged to allowance (102) (19)
-------------------------
Balance at end of period $ 2,311 $ 2,191
=========================
The allowance for possible loan losses is allocated as Nine Months Ended
follows: September 30,
------------------------
1996 1995
-------------------------
Residential mortgage loans $ 519 $ 486
Commercial mortgage loans 1,215 1,144
Commercial loans 180 238
All other loans 224 188
Unallocated 173 135
-------------------------
Total $ 2,311 $ 2,191
=========================
Non-performing loans are summarized as follows: September 30, December 31,
1996 1995
--------------------------
Loans accounted for on a non-accrual basis $ 485 $ -
Accruing loans 90 days past due 202 -
Restructured loans - -
4. DEPOSITS (in thousands)
A summary of deposit balances, by type, is as follows:
September 30, December 31,
1996 1995
-------------------------
Non-interest bearing deposits:
Demand $ 10,380 $ 6,034
Official checks 1,200 1,318
Total non-interest bearing deposits 11,580 7,352
-------------------------
Interest bearing deposits:
NOW accounts 29,960 25,212
Money market accounts 22,534 17,985
Savings, special notice and escrow accounts 14,823 13,305
Time certificates of deposit 59,125 50,503
-------------------------
Total interest bearing deposits 126,442 107,005
Total deposits $138,022 $114,357
=========================
</TABLE>
9
<PAGE>
HOME PORT BANCORP, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
5. COMMITMENTS
In the normal course of business, there are outstanding commitments that are
not reflected in the balance sheet. Firm commitments to originate mortgage and
commercial loans were $13.2 million at September 30, 1996 compared to $6.8
million at December 31, 1995.
6. INCOME TAXES
The effective rate for the three and nine months ended September 30, 1996 is
39%, which is less than the statutory rate of 43% due to a change in the
valuation allowance and status as Massachusetts security corporation.
10
<PAGE>
HOME PORT BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Unaudited Interim Information for September 30, 1996
CONSOLIDATED BALANCE SHEET
--------------------------
Total assets of Home Port Bancorp, Inc. (the "Company") increased $21.3
million, or 12.7%, to $188.6 million at September 30, 1996 from $167.3 million
at December 31, 1995. For the comparable nine month period in 1995 total assets
increased at a 3.3% rate. Strong deposit growth of $18.0 million (20.7%) in the
first nine months of 1996 provided the funding for an increase in the loan
portfolio of $18.8 million (14.6%). Major balance sheet categories are
discussed in detail below.
Net loans outstanding (including loans held for sale) were $147.9 million at
September 30, 1996, an increase of $18.8 million, or 14.6%, from the $129.1
million at December 31, 1995. For the comparable period in 1995, net loans
increased by 7.2%. Real estate loan originations, including both residential
and commercial properties, increased to $61.9 million in the first nine months
of 1996 compared to $42.7 million in the comparable 1995 period. This increase
in originations is attributed to an increase in real estate and business
activity on Nantucket. Loan sales totaled $18.8 million during the first nine
months of 1996 as compared to $20.6 million in the 1995 period.
Total deposits increased by $23.6 million, or 20.7%, to $138.0 million at
September 30, 1996 from $114.4 million at December 31, 1995, with most of this
increase occurring in the third quarter. Although the Bank usually experiences
a seasonal increase in deposits during the summer months, the increase during
the 1996 season was greater than anticipated and is attributed to the strong
real estate market and good overall economic activity on Nantucket. In the
comparable nine month period in 1995, deposits increased by $14.1 million, or
13.5%.
During the first nine months of 1996 borrowed funds decreased by $3.2 million
to $29.6 million from $32.8 million at December 31, 1995. During the third
quarter borrowings decreased by $11.9 million or 28.7% from their levels at June
30, 1996. The deposit growth during the third quarter provided the funds to
reduce borrowings. During the first six months of 1996 borrowings had been
utilized to fund loan growth. For the comparable nine month period in 1995
borrowed funds decreased by $5.6 million to $27.5 million. Borrowed funds
consist of Federal Home Loan Bank advances.
Total stockholders' equity increased by $1.2 million to $19.6 million at
September 30, 1996 from $18.4 million at December 31, 1995. This increase
reflects net income of $2.2 million less cash dividends declared of $922
thousand and a $47 thousand unrealized loss on securities available for sale.
11
<PAGE>
HOME PORT BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Unaudited Interim Information for September 30, 1996
RESULTS OF OPERATIONS
---------------------
For the quarter ended September 30, 1996, net income totaled $769 thousand, or
$0.42 per share, compared to $767 thousand, or $0.42 per share, for the quarter
ended September 30, 1995. For the nine months ended September 30, 1996 net
income totaled $2.2 million, or $1.21 per share, compared to $1.9 million, or
$1.07 per share, for the comparable 1995 period.
Earnings for the third quarter of 1996 were level compared to the same period
prior year. Although growth and a higher net interest margin increased net
interest and dividend income by $199 thousand, this was offset by the addition
of a provision for loan losses of $38 thousand, an increase in non-interest
expense of $111 thousand, and an increase in the effective tax rate. For the
nine months ending September 30, 1996, net interest income increased by $719
thousand, or 13.6%, as compared to the prior year. This improvement was
due to growth and an increase in the net interest margin to 4.74% in 1996
compared to 4.35% in 1995. The increase in the margin was primarily due to
reductions in the amount of lower yielding investment securities and in the cost
of borrowed funds.
Partially offsetting the increases in net interest income were increases in
non-interest expense. In the third quarter of 1996 total non-interest expenses
increased $111 thousand, or 12.2%, compared to the same period in the prior
year. For the nine months ending September 30, 1996 total non-interest expenses
increased $269 thousand, or 9.9%, compared to the prior year. These increases
were primarily due to increases in staff and staff training to service the
business growth, the addition of a senior lending officer and an increase in
marketing costs. Improvements to the Bank's offices and investments in computer
equipment and software resulted in additional depreciation expense. Partially
offsetting these increases was a $127 thousand reduction in deposit insurance
expense for the nine month period.
Return on Equity
Return on equity increased to an annualized rate of 15.69% for the nine months
ending September 30, 1996 from 13.77% for the same period in 1995. This
improvement is due to higher earnings combined with a lower equity base
resulting from the payment in 1995 of two special dividends totaling $6.4
million ($3.50 per share).
Provision for Loan Losses
The allowance for loan losses at September 30, 1996 was $2.3 million or 1.54%
of total loans compared to $2.2 million, or 1.71% of total loans, at December
31, 1995. In the third quarter of 1996 the Bank recorded a provision for loan
losses of $38 thousand. This represents the first loan loss provision since
1992, a period during which the Bank's loan portfolio more than doubled to $150
million and the proportion of residential first mortgage loans increased from
44% to 67% of the portfolio. The Bank considers residential first mortgage loans
to have less risk than commercial mortgages, second mortgages and business
loans. Management believes that it is prudent to provide additional reserves in
this and future quarters.
During the nine months ending September 30, 1996 the Bank recorded recoveries
of $126 thousand and charge-offs of $102 thousand. During the year ended
December 31, 1995 recoveries totaled $115 thousand compared to charge-offs of
$20 thousand.
12
<PAGE>
HOME PORT BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Unaudited Interim Information for September 30, 1996
Non-performing Loans and Other Real Estate Owned
At September 30, 1996, non-performing loans totaled $687 thousand, including
$202 thousand of accruing loans 90 days past due. This represents .46% of total
loans. There were no non-performing loans at December 31,1995. None of these
loans were to affiliated persons. Substantially all of the non-performing loans
consist of first mortgage loans on residential real estate. At September 30,
1996 the bank had $65 thousand of other real estate owned compared to none at
December 31, 1995.
At September 30, 1996 management has identified $808 thousand of loans that,
while currently performing, may pose potential problems due to some doubts about
the ability of the borrowers to comply with all of their present loan repayment
terms. The resolution of these loans is not yet known. The Bank believes that
its allowance for loan losses is adequate to absorb any losses that may result
from these loans.
Income Taxes
The Company and its subsidiaries, on a consolidated basis are subject to
Federal income tax. The Company is also subject to a Delaware franchise tax and
a Massachusetts tax as a security corporation. The Bank and it's subsidiary are
subject to a Massachusetts income tax. For interim unaudited financial
statements, management calculated the provision for taxes using an estimated
combined Federal and state tax rate of 40% and made an adjustment decreasing the
deferred tax valuation reserve. The expected tax rate is reviewed and adjusted
as necessary on a quarterly basis.
Liquidity and Capital Resources
Substantially all of the Company's funds are generated through its banking
subsidiary, Nantucket Bank. The Bank's sources are customer deposits,
amortization and payoffs of loans, advances from the Federal Home Loan Bank of
Boston, sale of loans in the secondary market, maturities and sales of
securities and positive cash flows generated from operations. As a member of
the Depositors' Insurance Fund, the Bank also has a right to borrow from the
Depositors Insurance Fund for short-term cash needs by pledging certain assets,
although it has never exercised this right. The Bank's liquidity management
program is designed to assure that sufficient funds are available to meet it's
daily needs.
The Bank believes its capital resources, including deposits, scheduled loan
repayments, revenue generated from the sales of loans and securities, unused
borrowing capacity at the Federal Home Loan Bank of Boston, and revenue from
other sources will be adequate to meet its funding commitments.
At September 30, 1996 and December 31, 1995 the Company's and the Bank's
capital ratios were in excess of regulatory requirements.
13
<PAGE>
HOME PORT BANCORP, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
The Company and its subsidiaries are not involved in any pending
legal proceedings other than those involved in the ordinary course of
their businesses. Management believes that the resolution of these
matters will not materially affect their businesses or the
consolidated financial condition of the Company and its subsidiary.
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.
------------------
A cash dividend of $.20 per common share was declared on July 29,
1996. The dividend was paid on August 29, 1996 to shareholders of
record as of August 15, 1996.
Declaration of dividends by the Board of Directors depends on a
number of factors, including capital requirements, regulatory
limitations, the Company's operating results and financial condition
and general economic conditions.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
a. Exhibits -- None
--------
b. Reports on Form 8-K - No reports on Form 8-K were filed
-------------------
during the quarter ended September 30, 1996.
14
<PAGE>
HOME PORT BANCORP, INC. AND SUBSIDIARIES
Signatures
- ----------
In accordance with the requirements of the Securities Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Home Port Bancorp, Inc.
------------------------------------------------
(Registrant)
Date: November 8, 1996 By: /s/ William P. Hourihan, Jr.
------------------------------------------------
William P. Hourihan, Vice President
Date: November 8, 1996 By: /s/ John M. Sweeney
------------------------------------------------
John M. Sweeney, Treasurer
(chief financial & accounting officer)
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM HOME PORT
BANCORP, INC'S FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<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> 5,553
<INT-BEARING-DEPOSITS> 6,434
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 7,377
<INVESTMENTS-CARRYING> 15,587
<INVESTMENTS-MARKET> 15,348
<LOANS> 146,104
<ALLOWANCE> 2,311
<TOTAL-ASSETS> 188,647
<DEPOSITS> 138,022
<SHORT-TERM> 29,639
<LIABILITIES-OTHER> 1,197
<LONG-TERM> 0
23
0
<COMMON> 0
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<INTEREST-OTHER> 0
<INTEREST-TOTAL> 10,684
<INTEREST-DEPOSIT> 3,081
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<INCOME-PRE-EXTRAORDINARY> 3,650
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<EPS-PRIMARY> 1.21
<EPS-DILUTED> 1.21
<YIELD-ACTUAL> 4.74
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<ALLOWANCE-CLOSE> 2,311
<ALLOWANCE-DOMESTIC> 2,311
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<ALLOWANCE-UNALLOCATED> 0
</TABLE>
