U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF
1934
For the quarterly period ended: September 30, 2000
[_] 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: 0-28815
FIRST LITCHFIELD FINANCIAL CORPORATION
--------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 06-1241321
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
13 North Street, Litchfield, CT 06759
------------------------------- -----
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (860) 567-8752
--------------------------------------------------------------------------------
(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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 1,514,931 shares of Common Stock, par
value $.01 per share, were outstanding at October 27, 2000.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [ X ]
<PAGE>
FIRST LITCHFIELD FINANCIAL CORPORATION
FORM 10-QSB
INDEX
<TABLE>
<CAPTION>
Page
Part I - Consolidated Financial Information
Item 1 - Financial Statements
<S> <C>
Consolidated Balance Sheets - September 30, 2000 (unaudited) and
December 31, 1999. . . . . . . . . . . . . . . . . . . . . . . . . 2
Consolidated Statements of Income (unaudited) - Three months and
nine months ended September 30, 2000 and 1999. . . . . . . . . . . 3
Consolidated Statements of Comprehensive Income (unaudited) -Three
months and nine months ended September 30, 2000 and 1999. . . . . . 4
Consolidated Statements of Cash Flows (unaudited) - Nine months
ended September 30, 2000 and 1999 . . . . . . . . .. . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . .. . . 6
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . . . . .. . . 8
Part II - Other Information
1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . None
2. Changes in Securities and Use of Proceeds . . . . . . . . . . . . . . . . None
3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . . . . . . None
4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . None
5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . 17
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
<PAGE>
FIRST LITCHFIELD FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
-------------- -------------
(Unaudited)
ASSETS
<S> <C> <C>
Cash and due from banks $ 7,924,517 $ 12,800,196
-------------- -------------
CASH AND CASH EQUIVALENTS 7,924,517 12,800,196
-------------- -------------
Securities:
Available for sale securities:
US Treasuries and other securities (amortized cost $29,461,158-2000 28,992,270 23,663,850
and $24,491,689-1999)
Mortgage-backed securities (amortized cost $22,039,588-2000
and $19,279,026-1999) 21,807,018 19,036,632
Held to maturity securities:
Mortgage-backed securities (market value $2,789,144-2000
and $4,147,716-1999) 2,796,785 4,188,851
-------------- -------------
TOTAL SECURITIES 53,596,073 46,889,333
-------------- -------------
Federal Home Loan Bank stock, at cost 2,389,800 2,100,000
Federal Reserve Bank stock, at cost 81,850 81,850
Loans Receivable:
Real estate-residential mortgage 118,866,498 115,392,170
Real estate-commercial mortgage 22,250,610 19,821,940
Real estate-construction 7,709,249 7,090,241
Commercial 8,583,263 8,063,552
Installment 34,443,110 33,114,855
Other 123,008 123,370
-------------- -------------
TOTAL LOANS 191,975,738 183,606,128
Net deferred loan origination costs 1,407,963 1,217,288
Allowance for loan losses (1,016,491) (1,014,522)
-------------- --------------
NET LOANS 192,367,210 183,808,894
-------------- -------------
Deferred taxes 227,750 378,450
Bank premises and equipment, net 2,896,838 3,017,976
Foreclosed real estate 300,000 --
Accrued interest receivable 1,811,271 1,455,363
Other assets 5,895,989 5,441,728
-------------- -------------
TOTAL ASSETS $ 267,491,298 $ 255,973,790
============== =============
LIABILITIES
Deposits:
Noninterest bearing:
Demand $ 36,058,137 $ 33,990,059
Interest bearing:
Savings 36,328,333 36,556,699
Money market 43,424,337 44,111,008
Time certificates of deposit in denominations of $100,000 or more 17,920,700 16,802,864
Other time certificates of deposit 69,990,651 65,772,152
-------------- -------------
TOTAL DEPOSITS 203,722,158 197,232,782
-------------- -------------
Federal Home Loan Bank advances 45,415,000 41,730,000
Collateralized borrowings 960,927 830,227
Accrued expenses and other liabilities 1,211,302 1,254,572
-------------- -------------
TOTAL LIABILITIES 251,309,387 241,047,581
-------------- -------------
Commitments and Contingencies -- --
SHAREHOLDERS' EQUITY
Preferred stock $.00001 par value; 1,000,000 shares authorized, no shares
outstanding
Common stock $.01 par value
Authorized - 5,000,000 shares - 2000, 2,500,000 shares - 1999
Issued - 1,597,350 shares, outstanding - 1,514,931 shares - 2000 and
Issued - 1,567,353 shares, outstanding, 1,484,934 shares - 1999 15,973 15,674
Capital surplus 11,150,626 10,933,465
Retained earnings 6,144,614 5,324,445
Less: Treasury stock at cost-82,419 shares (701,061) (701,061)
Accumulated other comprehensive loss-net unrealized loss
on available for sale securities (net of taxes) (428,241) (646,314)
--------------- ---------------
TOTAL SHAREHOLDERS' EQUITY 16,181,911 14,926,209
-------------- ---------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 267,491,298 $ 255,973,790
============== ===============
</TABLE>
See Notes to Consolidated Financial Statements.
2
<PAGE>
FIRST LITCHFIELD FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
------------- -------------- ------------- --------------
INTEREST AND DIVIDEND INCOME
<S> <C> <C> <C> <C>
Interest and fees on loans $ 3,853,751 $ 3,344,152 $ 11,161,247 $ 9,369,903
Interest and dividends on securities:
Mortgage-backed 429,017 350,679 1,185,691 1,135,075
US Treasury and other 515,606 421,105 1,466,407 1,193,715
Deposits with banks 932 5 1,038 16
Other interest income -- 217 -- 11,811
------------- -------------- ------------- --------------
TOTAL INTEREST INCOME 4,799,306 4,116,158 13,814,383 11,710,520
------------- -------------- ------------- --------------
INTEREST EXPENSE
Interest on deposits:
Savings 134,107 130,210 388,798 383,279
Money market 423,186 366,345 1,206,331 1,075,641
Time certificates of deposit in
denominations $100,000 or more 216,169 147,713 612,322 459,729
Other time certificates of deposit 1,034,236 820,639 2,899,488 2,523,081
------------- -------------- ------------- --------------
TOTAL INTEREST ON DEPOSITS 1,807,698 1,464,907 5,106,939 4,441,730
Interest on Federal Home Loan Bank advances 724,475 402,003 1,971,685 778,366
Interest on borrowed money -- -- -- 743
------------- -------------- ------------- --------------
TOTAL INTEREST EXPENSE 2,532,173 1,866,910 7,078,624 5,220,839
------------- -------------- ------------- --------------
NET INTEREST INCOME 2,267,133 2,249,248 6,735,759 6,489,681
PROVISION FOR LOAN LOSSES 45,000 30,000 135,000 90,000
------------- -------------- ------------- --------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,222,133 2,219,248 6,600,759 6,399,681
------------- -------------- ------------- --------------
NONINTEREST INCOME
Banking service charges and fees 160,287 123,805 460,584 350,725
Trust 210,000 178,500 630,000 535,500
Other 86,770 43,199 276,344 173,532
------------- -------------- ------------- --------------
TOTAL NONINTEREST INCOME 457,057 345,504 1,366,928 1,059,757
------------- -------------- ------------- --------------
NONINTEREST EXPENSE
Salaries 817,844 730,899 2,401,384 2,100,645
Employee benefits 223,047 185,682 662,852 536,598
Net occupancy 110,942 126,802 337,490 362,102
Equipment 122,089 115,455 360,643 316,088
Legal fees 33,391 41,045 168,524 90,503
Directors fees 46,476 33,310 120,680 107,185
Computer services 190,377 168,922 548,830 535,506
Supplies 40,670 53,686 127,162 156,994
Commissions, services and fees 56,317 60,668 189,446 182,685
Postage 32,902 23,670 83,724 81,127
Advertising 56,670 64,930 155,394 170,257
OREO & non-performing loan expenses-net 5,003 647 6,608 3,463
Other 278,038 241,419 837,670 814,436
------------- -------------- ------------- --------------
TOTAL NONINTEREST EXPENSES 2,013,766 1,847,135 6,000,407 5,457,589
------------- -------------- ------------- --------------
INCOME BEFORE INCOME TAXES 665,424 717,617 1,967,280 2,001,849
PROVISION FOR INCOME TAXES 234,978 233,826 692,632 641,219
------------- -------------- ------------- --------------
NET INCOME $ 430,446 $ 483,791 $ 1,274,648 $ 1,360,630
============= ============== ============= ==============
INCOME PER SHARE
BASIC NET INCOME PER SHARE $ 0.28 $ 0.33 $ 0.84 $ 0.92
============= ============== ============= ==============
DILUTED NET INCOME PER SHARE $ 0.28 $ 0.31 $ 0.83 $ 0.88
============= ============== ============= ==============
Dividends Per Share $ 0.10 $ 0.10 $ 0.30 $ 0.30
============= ============== ============= ==============
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE>
FIRST LITCHFIELD FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
Three months ended September 30, (Unaudited) 2000 1999
---------------- ---------------
<S> <C> <C>
Net income $ 430,446 $ 483,791
Unrealized holding gains (losses) on securities:
Unrealized holding gains (losses) arising during
the period, net of taxes 249,068 (205,807)
---------------- ---------------
Comprehensive income $ 679,514 $ 277,984
================ ===============
Nine months ended September 30, (Unaudited) 2000 1999
---------------- ---------------
Net income $ 1,274,648 $ 1,360,630
Unrealized holding gains (losses) on securities:
Unrealized holding gains (losses) arising during
the period, net of taxes 218,074 (526,355)
---------------- ---------------
Comprehensive income $ 1,492,722 $ 834,275
================ ===============
</TABLE>
See Notes to Consolidated Financial Statements.
4
<PAGE>
FIRST LITCHFIELD FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
2000 1999
-------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 1,274,648 $ 1,360,630
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization and accretion of premiums and discounts
on investment securities, net (76,614) 52,649
Provision for loan losses 135,000 90,000
Depreciation and amortization 282,819 287,591
Loss on sale of foreclosed real estate -- 3,463
Loans originated for sale -- (542,550)
Proceeds from sales of loans held for sale -- 922,150
Loss on disposals of bank premises and equipment -- 546
Increase in accrued interest receivable (355,908) (198,626)
Increase in other assets (210,542) (372,869)
Increase in net deferred loan origination costs (190,675) (770,597)
(Decrease) increase in accrued expenses and other
liabilities (46,270) 265,778
-------------- -------------
Net cash provided by operating activities 812,458 1,098,165
-------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Available for sale mortgage-backed securities:
Proceeds from maturities and principal payments 3,019,057 6,206,309
Purchases (5,702,436) (3,994,548)
Available for sale US Treasury and other investment securities:
Proceeds from maturity 1,000,000 2,000,000
Purchases (5,961,570) (8,998,813)
Held to maturity mortgage-backed securities:
Proceeds from maturities and principal payments 1,383,597 2,437,143
Purchase of Federal Home Loan Bank Stock (289,800) (537,600)
Net increase in loans (8,907,236) (25,040,306)
Purchase of bank premises and equipment (161,681) (1,139,043)
Proceeds from sale of bank premises and equipment -- 169
Increase in cash surrender value of Bank owned
life insurance (139,125) --
-------------- -------------
Net cash used in investing activities (15,759,194) (29,066,689)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in savings, money market and
demand deposits 1,153,041 5,004,370
Net increase (decrease) in certificates of deposit 5,336,335 (6,000,135)
Net increase in borrowings under Federal Home
Loan Bank advances 3,685,000 28,964,000
Net increase in collateralized borrowings 130,700 242,739
Proceeds from exercise of stock options 217,460 118,206
Dividends paid on common stock (451,479) (423,341)
-------------- --------------
Net cash provided by financing activities 10,071,057 27,905,839
-------------- -------------
Net decrease in cash and cash equivalents (4,875,679) (62,685)
CASH AND CASH EQUIVALENTS, at beginning of period 12,800,196 8,756,166
-------------- -------------
CASH AND CASH EQUIVALENTS, at end of period $ 7,924,517 $ 8,693,481
============== =============
SUPPLEMENTAL INFORMATION
Cash paid during the period for:
Interest on deposits and borrowings $ 7,152,908 $ 5,089,771
============== =============
Income taxes $ 446,952 $ 689,656
============== =============
Net cash investing and financing activities:
Transfer of loans to other real estate owned $ 300,000 $ --
============== =============
Transfer of loans to repossessed assets $ 104,595 $ --
============== =============
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE>
FIRST LITCHFIELD FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated balance sheet at December 31, 1999 has been derived from
the audited financial statements at that date, but does not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements.
2. The accompanying unaudited consolidated financial statements and related
notes have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, 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 accompanying financial
statements and related notes should be read in conjunction with the audited
financial statements of First Litchfield Financial Corporation (the
"Company") and notes thereto for the fiscal year ended December 31, 1999.
These financial statements reflect, in the opinion of Management, all
adjustments, consisting of normal recurring adjustments, necessary for a
fair presentation of the Company's financial position and the results of its
operations and its cash flows for the periods presented. The results of
operations for the three and nine months ended September 30, 2000 are not
necessarily indicative of the results of operations that may be expected for
all of 2000.
3. The Company is required to present basic income per share and diluted income
per share in its statements of income. Basic income per share amounts are
computed by dividing net income by the weighted average number of common
shares outstanding. Diluted income per share assumes exercise of all
potential common stock in weighted average shares outstanding, unless the
effect is antidilutive. The Company is also required to provide a
reconciliation of the numerator and denominator used in the computation of
both basic and diluted income per share.
The following is information about the computation of net income per share
for the three and nine month periods ended September 30, 2000 and 1999. The
1999 information has been restated to give retroactive effect to all stock
dividends and stock splits for the periods presented.
For the Three Months Ended September 30, 2000
<TABLE>
<CAPTION>
Net Per Share
Income Shares Amount
-------- --------- ---------
Basic Net Income Per Share
<S> <C> <C> <C>
Income available to common shareholders $430,446 1,514,931 $ .28
Effect of Dilutive Securities
Options Outstanding -- --
Diluted Net Income Per Share
Income available to common shareholders
-------- --------- -------
plus assumed conversions $430,446 1,514,931 $ .28
======== ========= =======
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
For the Three Months Ended September 30, 1999
Net Per Share
Income Shares Amount
-------- --------- ---------
Basic Net Income Per Share
<S> <C> <C> <C>
Income available to common shareholders $483,791 1,484,934 $ .33
Effect of Dilutive Securities
Options Outstanding -- 65,462
Diluted Net Income Per Share
Income available to common shareholders
-------- --------- ---------
plus assumed conversions $483,791 1,550,396 $ .31
======== ========= =========
For the Nine Months Ended September 30, 2000
Net Per Share
Income Shares Amount
-------- ---------- ---------
Basic Net Income Per Share
Income available to common shareholders $1,274,648 1,509,339 $ .84
Effect of Dilutive Securities
Options Outstanding -- 28,923
Diluted Net Income Per Share
Income available to common shareholders
---------- ---------- ---------
plus assumed conversions $1,274,648 1,538,262 $ .83
========== ========== =========
For the Nine Months Ended September 30, 1999
Net Per Share
Income Shares Amount
-------- ---------- ---------
Basic Net Income Per Share
Income available to common shareholders $1,360,630 1,483,554 $ .92
Effect of Dilutive Securities
Options Outstanding -- 64,522
Diluted Net Income Per Share
Income available to common shareholders
---------- ---------- ---------
plus assumed conversions $1,360,630 1,548,076 $ .88
========== ========== =========
</TABLE>
4. Other comprehensive income, which is comprised solely of the change in
unrealized gains and losses on available for sale securities, is as
follows:
<TABLE>
<CAPTION>
Three Months Ended
September 30, 2000
---------------------------------------------------
Before-Tax Tax (Expense) Net-of-Tax
Amount Benefit Amount
---------------------------------------------------
<S> <C> <C> <C>
Unrealized holding gains arising during the period $ 407,976 $(158,908) $ 249,068
Less: reclassification adjustment for amounts recognized in net income -- -- --
------------ ---------- ----------
Unrealized holding gain on available for sale securities, net of taxes $ 407,976 $(158,908) $ 249,068
============ ========== ==========
September 30, 1999
---------------------------------------------------
Before-Tax Tax (Expense) Net-of-Tax
Amount Benefit Amount
---------------------------------------------------
Unrealized holding losses arising during the period $ (340,860) $ 135,053 $ (205,807)
Less: reclassification adjustment for amounts recognized in net income -- -- --
---------- ----------- ----------
Unrealized holding loss on available for sale securities, net of taxes $ (340,860) $ 135,053 $ (205,807)
========== =========== ==========
Nine Months Ended
September 30, 2000
---------------------------------------------------
Before-Tax Tax (Expense) Net-of-Tax
Amount Benefit Amount
---------------------------------------------------
Unrealized holding gains arising during the period $ 368,775 $ (150,701) $ 218,074
Less: reclassification adjustment for amounts recognized in net income -- -- --
---------- ----------- ----------
Unrealized holding gain on available for sale securities, net of taxes $ 368,775 $ (150,701) $ 218,074
========== =========== ==========
September 30, 1999
---------------------------------------------------
Before-Tax Tax (Expense) Net-of-Tax
Amount Benefit Amount
---------------------------------------------------
Unrealized holding losses arising during the period $ (868,382) $ 342,027 $ (526,355)
Less: reclassification adjustment for amounts recognized in net income -- -- --
---------- ----------- ----------
Unrealized holding loss on available for sale securities, net of taxes $ (868,382) $ 342,027 $ (526,355)
========== =========== ===========
</TABLE>
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
GENERAL
First Litchfield Financial Corporation (the "Company") a Delaware corporation
formed in 1988, is the one-bank holding company for The First National Bank of
Litchfield (the "Bank"), a national bank supervised and examined by the Office
of the Comptroller of the Currency (OCC.) The First National Bank of Litchfield
is the Company's only subsidiary and only source of income. The Bank has two
subsidiaries, Lincoln Corporation and Litchfield Mortgage Service Corporation,
which are Connecticut corporations. The purpose of Lincoln Corporation is to
hold property such as real estate, personal property, securities, or other
assets, acquired by the Bank through foreclosure or otherwise to compromise a
doubtful claim or collect a debt previously contracted. The purpose of the
Litchfield Mortgage Service Corporation is to act as a passive investment
company in accordance with Connecticut law.
Both the Company and the Bank are headquartered in Litchfield, CT. The Bank is a
full-service commercial bank serving both individuals and businesses generally
within Litchfield County Connecticut. Deposits are insured up to specific limits
of the Federal Deposit Insurance Act by the Bank Insurance Fund (BIF), which is
administered by the Federal Deposit Insurance Corporation (the "FDIC"). The
Bank's lending activities include loans secured by residential and commercial
mortgages. Other loan products include consumer and business installment
lending, as well as other secured and nonsecured lending. The Bank has six
banking locations located in the towns of Torrington, Litchfield, Washington,
Marble Dale, Goshen and Roxbury, Connecticut. In 1975, the Bank was granted
Trust powers by the OCC. The Bank's Trust Department provides trust fiduciary
services to individuals, nonprofit organizations and commercial customers.
As of September 30, 2000, the Company had total assets of $267,491,298, which
was an increase of $11,517,508 or 4.5% from year-end 1999 assets of
$255,973,790. The growth in assets was in the securities and loan portfolios.
The following discussion and analysis of the Company's consolidated financial
condition and results of operations should be read in conjunction with the
consolidated financial statements and notes to the financial statements.
FINANCIAL CONDITION
Total assets as of September 30, 2000 were $267,491,298 an increase of
$11,517,508 or 4.5% from year-end 1999 assets of $255,973,790.
Cash and cash equivalents decreased by $4,875,679 or 38.1% during the first nine
months of 2000. This decrease occurred during the first quarter of the year, and
was the result of lower requirements for cash and liquid funds after providing
for greater liquidity as part of the Bank's preparation for Year 2000
contingency planning at the end of 1999.
Growth in assets was experienced in both the loan and securities portfolios.
Total securities as of September 30, 2000 aggregated $53,596,073, which is an
increase of $6,706,740 or 14.3% from the year-end 1999 level. First and second
quarter purchases of US Government Treasury securities and agency bonds were
made in an effort to improve liquidity as well as to increase the yield on the
portfolio. Net loans totaled $192,367,210 as of September 30, 2000, an increase
of $8,558,316
8
<PAGE>
or 4.7% over the balance at December 31, 1999. Growth was experienced in nearly
all loan portfolios. The largest increase was in the residential and commercial
mortgage portfolios, which increased $3,474,328 and $2,428,670 respectively from
the year-end 1999 balances. Construction mortgages totaled $7,709,249, which is
an increase of $619,008 or 8.7% over the year end balance. Commercial and
installment loans increased by $519,711 or 6.4% and $1,328,255 or 4.0%,
respectively. The increased loan demand continues to be the result of the strong
local economy, the Bank's competitively priced loan products and the Bank's
reputation for excellent customer service.
Total liabilities increased by $10,261,806 or 4.3% from December 31, 1999, of
which 63.2% or $6,489,376 resulted from an increase in deposits. Deposits
totaled $203,722,158 as of September 30, 2000 compared to the year-end 1999
balance of $197,232,782. Increases occurred in demand deposits and time
certificates of deposit. Total demand deposits were $36,058,137 at September 30,
2000, an increase of $2,068,078 or 6.1% from the December 31, 1999 balance of
$33,990,059. New accounts resulting from the consolidation of banks in the
Corporation's market area is the cause of this increase.
Total time certificates of deposit increased by 6.7% and 6.4%, respectively,
since year-end 1999. Other time certificates of deposit were $69,990,651 at
September 30, 2000, an increase of $4,218,499, or 6.4% from the December 31,
1999 balance of $65,772,152. Shorter term time certificates of deposits offered
at competitive rates caused the growth in these deposits. This increase offset
slight decreases in money market and savings deposits.
As of September 30, 2000, Federal Home Loan Bank advances totaled $45,415,000
which was an increase of $3,685,000 or 8.8% from the year end balance of
$41,730,000. This increase was used to supplement deposit growth to fund the
growth of earning assets.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1999
Summary
Net income for the third quarter of 2000 totaled $430,446 which is a decline of
$53,345 or 11.0% from third quarter 1999 earnings of $483,791. Quarterly basic
and fully diluted net income per share for 2000 were both $.28 compared to $.33
and $.31, respectively, for the same period in 1999.
Net Interest Income
Net interest income is comprised of the following for the three months ended
September 30,
2000 1999
---------- ----------
Interest and dividend income $4,799,306 $4,116,158
Tax-equivalent adjustments 14,908 7,012
Interest expense 2,532,173 1,866,910
---------- ----------
Net interest income - tax equivalent basis $2,282,041 $2,256,260
========== ==========
9
<PAGE>
The following table presents the Company's average balance sheets (computed on a
daily basis), net interest income, and interest rates for the three months ended
September 30, 2000 and 1999. Average loans outstanding include nonaccruing
loans. Interest income is presented on a tax-equivalent basis which reflects a
federal tax rate of 34% for all periods presented.
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL
<TABLE>
<CAPTION>
Three months ended September 30, 2000
------------------------------------------------
Interest
Average Earned/ Yield/
Balance Paid Rate
--------------- ------------ -------
Assets
<S> <C> <C> <C>
Interest Earning Assets:
Loans $ 191,752,000 $ 3,868,659 8.07%
Investment Securities 57,803,000 945,555 6.54%
Other interest earning assets 0 0 N/A
--------------- ------------
Total interest earning assets 249,555,000 4,814,214 7.72%
Allowance for loan losses (996,000)
Cash and due from banks 7,158,000
Bank premises and equipment 2,938,000
Net unrealized gain/loss on
securities (997,000)
Foreclosed real estate 302,000
Other assets 7,559,000
---------------
Total Average Assets $ 265,519,000
===============
Liabilities and Shareholders' Equity
Interest Bearing Liabilities:
Savings deposits $ 37,837,000 $ 134,107 1.42%
Money Market deposits 45,295,000 423,186 3.74%
Time deposits 86,256,000 1,250,405 5.80%
Borrowed funds 42,862,000 724,475 6.76%
--------------- ------------
Total interest bearing liabilities 212,250,000 2,532,173 4.77%
Demand deposits 36,351,000
Other liabilities 914,000
Shareholders' Equity 16,004,000
---------------
Total liabilities and equity $ 265,519,000
===============
Net interest income - tax
equivalent basis $ 2,282,041
============
Net interest spread 2.95%
Net interest margin 3.66%
<CAPTION>
Three months ended September 30, 1999
---------------------------------------------------
Interest
Average Earned/ Yield/
Balance Paid Rate
--------------- ----------- -------
Assets
<S> <C> <C> <C>
Interest Earning Assets:
Loans $ 173,439,000 $ 3,351,164 7.73%
Investment Securities 50,999,000 771,800 6.05%
Other interest earning assets 17,000 206 4.85%
--------------- ------------
Total interest earning assets 224,455,000 4,123,170 7.35%
Allowance for loan losses (1,082,000)
Cash and due from banks 7,011,000
Bank premises and equipment 2,905,000
Net unrealized gain/loss on
securities 3,000
Foreclosed real estate 0
Other assets 4,832,000
---------------
Total Average Assets $ 238,124,000
===============
Liabilities and Shareholders' Equity
Interest Bearing Liabilities:
Savings deposits $ 36,557,000 $ 130,210 1.42%
Money Market deposits 44,749,000 366,345 3.27%
Time deposits 79,214,000 968,352 4.89%
Borrowed funds 29,110,000 402,003 5.52%
--------------- ------------
Total interest bearing liabilities 189,630,000 1,866,910 3.94%
Demand deposits 32,590,000
Other liabilities 1,152,000
Shareholders' Equity 14,752,000
---------------
Total liabilities and equity $ 238,124,000
===============
Net interest income - tax
equivalent basis $ 2,256,260
============
Net interest spread 3.41%
Net interest margin 4.02%
</TABLE>
RATE/VOLUME ANALYSIS
Three months ended
9/30/00 Compared to 9/30/99
Increase (Decrease) Due to
------------------------------------
Volume Rate Total
-------- ------ ---------
Interest earned on:
Loans $364,861 $ 152,634 $517,495
Investment securities 108,156 65,599 173,755
Other interest income (103) (103) (206)
--------- ---------- --------
Total interest earning assets 472,914 218,130 691,044
Interest paid on:
Deposits 84,301 258,490 342,791
Borrowed money 218,765 103,707 322,472
--------- ---------- --------
Total interest bearing liabilities 303,066 362,197 665,263
Increase (decrease) in net interest income $169,848 $(144,067) $ 25,781
========= ========== ========
10
<PAGE>
Of the $25,781 increase in the net interest income (on a tax equivalent basis),
a decrease of $144,067 resulted from interest rate fluctuations during 2000 and
an increase of $169,848 is attributed to increases in the volume of average
interest earning assets and interest bearing liabilities.
Tax equivalent net interest income for the third quarter of 2000 increased
$25,781 or 1.1% from third quarter of 1999. The increase in net interest income
is due to the higher levels of earning assets over last year. Average earning
assets for the third quarter of 2000 were $250 million which is an increase of
$25 million from the average earning assets for the third quarter of 1999.
Offsetting much of the increase resulting from the higher level of earning
assets was a lower net interest margin experienced in 2000. The net interest
margin for the third quarter of 2000 was 3.66%, 36 basis points lower than that
for the same quarter of the previous year. The cause of the decline in the net
interest margin continues to be due to funding costs increasing at a faster rate
than interest on earning assets. Since the third quarter of 1999, funding costs
rose 83 basis points from 3.94% to 4.77%. Earning assets yields however, rose
only 37 basis points, from 7.35% to 7.72%. This is due to the higher balances of
borrowed funds which may change frequently due to market conditions, and rate
competition for deposits, while many fixed rate loan products do not reprice
when market conditions change.
Provision for Loan Losses
The provision for loan losses for the third quarter of the year totaled $45,000,
an increase of $15,000 from the third quarter of 1999. The increase was
necessitated by the increase in net loan chargeoffs during 2000.
During the third quarter of 2000, the Company recorded net charge-offs of
$61,825 compared to net charge-offs of $791 for the same period in 1999. The
increase in net charge-offs relates primarily to increases in the consumer loan
portfolio. Loans charged off during the third quarter of 2000 included net
charge-offs of $29,134 in installment loans made through the indirect loan
program. Also during the third quarter the Bank had net charge-offs of $24,108
and $8,583 in the mortgage and credit card portfolios.
Noninterest Income
Noninterest income totaled $457,057 for the quarter ended September 30, 2000, an
increase of $111,553 or 32.3% from the $345,504 earned for the same period in
1999. Banking service charges and fees have increased by $36,482 or 29.5%. This
increase was caused by increases in fees from overdrafts, ATMs and debit cards.
Trust fees increased by $31,500 or 17.6% resulting from higher levels of trust
assets and fee increases. Third quarter other noninterest income totaled
$86,770, an increase of $43,571 from 1999. The increase was caused primarily by
income relating to increases in the cash surrender value of bank owned life
insurance. Also contributing to the increase in other noninterest income was
increased safe deposit rental income.
Noninterest Expense
For the three months ended September 30, 2000, noninterest expense totaled
$2,013,766, an increase of $166,631 or 9.0% from the same period of 1999. The
primary cause of this increase was salary and benefits costs which increased by
$124,310 due mostly to additional staffing as well as group insurance rate
increases.
11
<PAGE>
Costs for external computer services totaled $190,377 for the third quarter of
2000, which was an increase of $21,455 or 12.7% from the third quarter of 1999.
This increase is due to increased costs for such services rendered during the
quarter. Other noninterest expenses totaled $278,038, which was an increase of
$36,619 due to increased costs for insurance, regulatory assessments, computer
consulting, software and contributions. Costs for supplies, commissions, legal
fees and advertising decreased for the third quarter of 2000.
Income Taxes
The provision for income taxes for the three month period ended September 30,
2000 totaled $234,978 which was similar to the provision of $233,826 from the
same period in 1999. Although taxable income was higher for 1999, the historic
renovation tax credit taken in 1999 resulted in a lower third quarter tax
expense for 1999 as compared to the third quarter of 2000.
RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE
MONTHS ENDED SEPTEMBER 30, 1999
Summary
Net income for the Company for the nine months ended September 30, 2000 totaled
$1,274,648, a decrease of $85,982 or 6.3% from 1999 earnings of $1,360,630.
Basic and diluted net income per share for the nine month period were $.84 and
$.83 per share respectively. These results are lower than the basic and diluted
net income per share amounts of $.92 and $.88 per share respectively, reported
for the first nine months of 1999.
Net Interest Income
Net interest income is comprised of the following for the nine months ended
September 30,
2000 1999
------------- --------------
Interest and dividend income $ 13,814,383 $ 11,710,520
Tax-equivalent adjustments 46,660 17,238
Interest expense 7,078,624 5,220,839
------------- -------------
Net interest income - tax equivalent basis $ 6,782,419 $ 6,506,919
============= =============
The following table presents the Company's average balance sheets (computed on a
daily basis), net interest income, and interest rates for the nine months ended
September 30, 2000 and 1999. Average loans outstanding include nonaccruing
loans. Interest income is presented on a tax-equivalent basis which reflects a
federal tax rate of 34% for all periods presented.
12
<PAGE>
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL
<TABLE>
<CAPTION>
Nine months ended September 30, 2000
-------------------------------------------------
Interest
Average Earned/ Yield/
Balance Paid Rate
--------------- ------------ -------
Assets
Interest Earning Assets:
<S> <C> <C> <C>
Loans $ 189,268,000 $ 11,207,907 7.90%
Investment Securities 55,179,000 2,653,136 6.41%
Other interest earning assets 0 0 N/A
--------------- ------------
Total interest earning assets 244,447,000 13,861,043 7.56%
Allowance for loan losses (994,000)
Cash and due from banks 6,542,000
Bank premises and equipment 2,962,000
Net unrealized gain/loss on
securities (1,077,000)
Foreclosed real estate 126,000
Other assets 7,461,000
---------------
Total Average Assets $ 259,467,000
===============
Liabilities and Shareholder's Equity
Interest Bearing Liabilities:
Savings deposits $ 36,441,000 $ 388,798 1.42%
Money Market deposits 44,689,000 1,206,331 3.60%
Time deposits 85,594,000 3,511,810 5.47%
Borrowed funds 40,734,000 1,971,685 6.45%
--------------- ------------
Total interest bearing liabilities 207,458,000 7,078,624 4.55%
Demand deposits 35,483,000
Other liabilities 990,000
Shareholders' Equity 15,536,000
---------------
Total liabilities and equity $ 259,467,000
===============
Net interest income - tax
equivalent basis $ 6,782,419
============
Net interest spread 3.01%
Net interest margin 3.70%
<CAPTION>
Nine months ended September 30, 1999
---------------------------------------------------
Interest
Average Earned/ Yield/
Balance Paid Rate
--------------- ----------- ------
Assets
Interest Earning Assets:
<S> <C> <C> <C>
Loans $ 164,035,000 $ 9,387,141 7.63%
Investment Securities 51,468,000 2,328,806 6.03%
Other interest earning assets 330,000 11,811 4.77%
--------------- ------------
Total interest earning assets 215,833,000 11,727,758 7.24%
Allowance for loan losses (1,054,000)
Cash and due from banks 5,943,000
Bank premises and equipment 2,539,000
Net unrealized gain/loss on
securities (49,000)
Foreclosed real estate 0
Other assets 3,586,000
---------------
Total Average Assets 226,798,000
===============
Liabilities and Shareholder's Equity
Interest Bearing Liabilities:
Savings deposits $ 35,673,000 $ 383,279 1.43%
Money Market deposits 43,925,000 1,075,641 3.27%
Time deposits 80,418,000 2,982,810 4.95%
Borrowed funds 19,280,000 779,109 5.39%
--------------- ------------
Total interest bearing liabilities 179,296,000 5,220,839 3.88%
Demand deposits 32,142,000
Other liabilities 702,000
Shareholders' Equity 14,658,000
---------------
Total liabilities and equity $ 226,798,000
===============
Net interest income - tax
equivalent basis $ 6,506,919
============
Net interest spread 3.36%
Net interest margin 4.02%
</TABLE>
RATE/VOLUME ANALYSIS
<TABLE>
<CAPTION>
Nine months ended
9/30/00 Compared to 9/30/99
Increase (Decrease) Due to
--------------------------------------------
Volume Rate Total
-------- ------ -----------
Interest earned on:
<S> <C> <C> <C>
Loans $1,484,962 $ 335,804 $1,820,766
Investment securities 173,543 150,787 324,330
Other interest income (5,906) (5,905) (11,811)
---------- ---------- ----------
Total interest earning assets 1,652,599 480,686 2,133,285
Interest paid on:
Deposits 191,756 473,453 665,209
Borrowed money 1,012,572 180,004 1,192,576
---------- ---------- ----------
Total interest bearing liabilities 1,204,328 653,457 1,857,785
Increase in net interest income $ 448,271 $ (172,771) $ 275,500
========== =========== ==========
</TABLE>
Of the $275,500 increase in the net interest income (on a tax equivalent basis),
a decrease of $172,771 resulted from interest rate fluctuations during 2000 and
an increase of $448,271 is attributed to increases in the volume of average
interest earning assets and interest bearing liabilities.
13
<PAGE>
Tax equivalent net interest income for the first six months of 2000 increased
$275,500 or 4.2% from the same period in 1999. The increase in net interest
income is due to the higher levels of earning assets over last year. Average
earning assets for the nine months ended September 30, 2000 totaled $244 million
which is an increase of $28 million from average earning assets of $216 million
for the nine months ended September 30, 1999. The effect of the increased level
of earning assets offset the negative effect of interest rate fluctuations
during the year. The net interest margin was 3.70% for the first nine months of
2000. This margin has decreased 32 basis points from the 4.02% for the similar
period of 1999. The higher interest rate environment experienced during 2000 has
decreased the net interest margin by increasing funding costs, especially costs
for borrowed money. The yield on earning assets is 32 basis points above that
for the nine months ended September 30, 1999, while the cost of funds is 67
basis points higher. Intense rate competition with other institutions as well as
fixed rate products have caused the yield on earning assets to increase at a
much slower pace than increases in interest rates. On the other hand, the
funding liabilities of the Company are now comprised of a significant amount of
borrowed funds which adjust rapidly to interest rate changes. Deposit costs have
also increased, though not as rapidly as the cost for borrowed funds. Deposit
interest rate increases have been caused by intense rate competition for
deposits locally as well as overall increases in the market rate environment.
Provision for Loan Losses
The provision for loan losses for the first nine months of the year totaled
$135,000, an increase of $45,000 from the first nine months of 1999. Growth in
net chargeoffs, particularly in the consumer installment loans, was the primary
reason for the increased provision. The provision for loan losses is determined
quarterly and assessed along with the adequacy of the loan loss reserve.
During the first three quarters of 2000, the Company recorded net charge-offs of
$133,031 compared to net charge-offs of $3,263 for the first three quarters of
1999. The increase in net charge-offs for the first nine months of 2000 was
caused by credit losses in the mortgage loan portfolio and in the consumer loan
portfolio, particularly in installment and credit card loans.
Noninterest Income
Year to date noninterest income for the nine months ended September 30, 2000
totaled $1,366,928, an increase of $307,171 or 29.0% from the $1,059,757 earned
for the same period in 1999. Banking service charges and fees have increased by
$109,859 or 31.3% due to increases in fees from overdrafts, ATMs and debit
cards. Fees from trust services increased by $94,500 or 17.6%. Fee increases
effective in 2000 as well as growth in trust assets have resulted in the
additional income. Other noninterest income totaled $276,344, increasing
$102,812 over income of $173,532 earned through September 30, 1999. Income from
increases in the cash surrender value of bank-owned life insurance purchased in
1999 is the primary cause of this increase. This additional income has offset
the decrease in income from lower levels of mutual fund sales. Income from the
sale of mutual funds amounted to $68,689, which represented a decrease of
$55,957 from the same period in 1999.
14
<PAGE>
Noninterest Expense
For the nine months ended September 30, 2000, nine month noninterest expense
totaled $6,000,407, an increase of 9.95% and $542,818 from the same period of
1999. Most of this increase is attributed to salary and benefits costs which
increased by a total of $426,993 due to salary adjustments and additions to
staff.
Legal fees for the first nine months of 2000 totaled $168,524 which is an
increase of 86% from the first nine months of 1999. The increase in such fees
resulted from services during the first and second quarters relating to the
Company's filing of registration statements with the Securities and Exchange
Commission to register its securities, and to fees associated with the Company's
disclosure and reporting responsibilities as an SEC reporting company. In
addition, legal fees relating to the Bank's collection efforts and to legal
matters involving the Bank's trust function contributed to such increase.
Equipment costs for the nine months ended September 30, 2000, resulting from the
Bank's continued investment in technology, increased $44,555 or 14.1% from the
same period in 1999. Offsetting some of these increases are decreases in costs
for supplies, advertising and other net occupancy expenses.
Income Taxes
The provision for income taxes for the first nine months of 2000 totaled
$692,632, an increase of $51,413 from the same period in 1999. Although taxable
income for the first nine months of 2000 is lower than that for the same period
in 1999, 1999 taxes incorporated an investment tax credit related to the
renovation of the building housing the executive offices. This tax credit
reduced income tax expense for 1999.
LIQUIDITY
Management's objective is to ensure continuous ability to meet cash needs as
they arise. Such needs may occur from time to time as a result of fluctuations
in loan demand and the level of total deposits. Accordingly, the Bank has a
liquidity policy that provides flexibility to meet cash needs. The liquidity
objective is achieved through the maintenance of readily marketable investment
securities as well as a balanced flow of asset maturities and prudent pricing on
loan and deposit products.
The Bank is a member of the Federal Home Loan Bank system which provides credit
to its member banks. This enhances the liquidity position of the Bank by
providing a source of available overnight as well as short-term borrowings.
Additionally, federal funds and the sale of mortgage loans in the secondary
market are available to fund short-term cash needs.
As of September 30, 2000, the Company had $29,642,463 in loan commitments and
credit lines outstanding. Since some commitments are expected to expire without
being drawn upon, the total commitment amount therefore does not necessarily
represent all future cash requirements. The funding of these commitments are
anticipated to be through deposits, loan and security amortizations and
maturities. Management is confident that the Company has sufficient liquidity to
meet its present and foreseeable needs.
15
<PAGE>
CAPITAL
At September 30, 2000, total shareholders' equity was $16,181,911 compared to
$14,926,209 at December 31, 1999. From a regulatory perspective, the capital
ratios of the Company and the Bank places each entity in the "well-capitalized"
categories under applicable regulations. The various capital ratios of the
Company and the Bank are as follows as of September 30, 2000.
Minimum
Regulatory
Capital Levels The Company The Bank
-------------- ----------- --------
TIER 1:
Leverage capital ratio 4% 6.26% 6.14%
Risk-based capital ratio 4% 9.93% 9.89%
Total risk-based capital ratio 8% 10.53% 10.50%
ALLOWANCE FOR LOAN LOSSES
Changes in the allowance for loan losses for the periods ended September 30,
2000 and 1999 are shown below:
Nine months ended September 30,
2000 1999
------------- ------------
Balance at beginning of the year $ 1,014,522 $ 1,013,949
Provision for loan losses 135,000 90,000
Loans charged off (206,023) (6,126)
Recoveries of loans previously charged off 72,992 2,863
------------- ------------
Balance at end of period $ 1,016,491 $ 1,100,686
============= ============
The following table summarizes the Bank's OREO, past due and nonaccrual loans,
and nonperforming assets as of September 30, 2000 and December 31, 1999.
<TABLE>
<CAPTION>
September 30, 2000 December 31, 1999
------------------ -----------------
<S> <C> <C>
Nonaccrual loans $ 768,509 $ 1,394,305
Other real estate owned 300,000 --
------------------ -----------------
Total nonperforming assets $ 1,068,509 $ 1,394,305
================== =================
Loans past due in excess of 90 days and
accruing interest $ 142,331 $ 33,441
================== =================
</TABLE>
Potential Problem Loans
As of September 30, 2000, there were no potential problem loans not disclosed
above which cause management to have serious doubts as to the ability of such
borrowers to comply with their present loan repayment terms.
FORWARD-LOOKING STATEMENTS
This Quarterly Report and future filings made by the Company with the Securities
and Exchange Commission, as well as other filings, reports and press releases
made or issued by the Company and the Bank, and oral statements made by
executive officers of the Company and Bank, may include forward-looking
statements relating to such matters as (a) assumptions concerning future
economic and business conditions and their effect on the economy in general and
on the markets in
16
<PAGE>
which the Company and the Bank do business, and (b) expectations for increased
revenues and earnings for the Company and Bank through growth resulting from
acquisitions, attractions of new deposit and loan customers and the introduction
of new products and services. For those statements, the Company claims the
protection of the safe harbor for Forward Looking Statements contained in the
Private Securities Litigation Reform Act of 1995.
The Company notes that a variety of factors could cause the actual results or
experience to differ materially from the anticipated results or other
expectations described or implied by such forward-looking statements. The risks
and uncertainties that may affect the operations, performance, development and
results of the Company's and Bank's business include the following: (a) the risk
of adverse changes in business conditions in the banking industry generally and
in the specific markets in which the Bank operates: (b) changes in the
legislative and regulatory environment that negatively impact the Company and
Bank through increased operating expenses; (c) increased competition from other
financial and nonfinancial institutions; (d) the impact of technological
advances; and (e) other risks detailed from time to time in the Company's
filings with the Securities and Exchange Commission. The Company and Bank do not
undertake any obligation to update or revise any forward-looking statements
subsequent to the date on which they are made.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - Not applicable
Neither the Company nor the Bank is involved in any pending material legal
proceedings other than routine legal proceedings occurring in the ordinary
course of business. Such routine legal proceedings, in the aggregate, are
believed by management to be immaterial to the Company's financial condition or
results of operations.
Item 2. Changes in Securities and Use of Proceeds - 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
The State of Connecticut enacted tax law changes in May 1998, allowing for the
formation of a passive investment company ("PIC") by financial institutions. The
law permits financial institutions to contribute certain intangible investments,
such as mortgage assets, to its PIC to achieve certain tax benefits. The law
exempts PICs from state income taxation in Connecticut, and exempts from
inclusion in Connecticut taxable income the dividends paid from a PIC to a
related financial institution. The First National Bank of Litchfield qualifies
as a financial institution under the statute, and incorporated Litchfield
Mortgage Service Corporation ("LMSC") to qualify as a PIC. LMSC was incorporated
during the third quarter of 2000 and began operations during the fourth quarter
of 2000. The Bank's operation of a PIC subsidiary is expected to reduce its
Connecticut tax liability. LMSC is a wholly-owned subsidiary of The First
National Bank of Litchfield.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 27 - Financial Data Schedule
17
<PAGE>
Pursuant to the requirements of Section 13 or 15(d) 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.
Dated: November 13, 2000 FIRST LITCHFIELD FINANCIAL CORPORATION
By: /s/ Jerome J. Whalen
------------------------------------
Jerome J. Whalen, President and
Chief Executive Officer
Dated: November 13, 2000 By: /s/ Carroll A. Pereira
-------------------------------------
Carroll A. Pereira, Treasurer
(Principal Accounting Officer)
18
