FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 2000
Commission file number: 33-850626
FULTON BANCSHARES CORPORATION
(Exact name of registrant as specified in its charter)
Commonwealth of Pennsylvania 25-1598464
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Lincoln Way East
McConnellsburg, Pennsylvania 17233
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code: (717) 485-3144
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at October 31, 2000
(Common stock, .625 par value) 492,700
Page 1 of 18 pages
FULTON BANCSHARES CORPORATION
INDEX
Page
PART I - FINANCIAL INFORMATION
Condensed consolidated balance sheets - September 30, 2000
and December 31, 1999 3
Condensed consolidated statements of income - three months
ended September 30, 2000 and 1999 4
Condensed consolidated statements of comprehensive income -
three months ended September 30, 2000 and 1999 5
Condensed consolidated statements of income - nine months
ended September 30, 2000 and 1999 6
Condensed consolidated statements of comprehensive income -
nine months ended September 30, 2000 and 1999 7
Condensed consolidated statements of cash flows - nine
months ended September 30, 2000 and 1999 8
Notes to condensed consolidated financial statements 9 - 10
Management's discussion and analysis of financial
condition and results of operations 11 - 16
PART II - OTHER INFORMATION 17
Signatures 18
Exhibits
Page 2 of 18 page
PART I - FINANCIAL INFORMATION
FULTON BANCSHARES CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2000 1999 *
ASSETS (Unaudited)
(000 Omitted)
Cash and due from banks $ 4,043 $ 4,582
Available-for-sale securities 23,624 23,567
Federal Reserve, Atlantic Central Bankers Bank,
Federal Home Loan Bank, at cost which
approximates market 1,135 870
Loans, net of allowance for loan losses 100,208 90,995
Bank building, equipment, furniture &
fixtures, net 3,570 3,710
Other real estate owned 227 230
Accrued interest/dividends receivable 1,011 731
Cash surrender value of life insurance 4,161 3,028
Other assets 772 765
Total assets $ 138,751 $ 128,478
LIABILITIES
Deposits:
Noninterest-bearing deposits $ 12,878 $ 12,354
Interest-bearing deposits:
Savings deposits 28,210 29,913
Time deposits 62,850 61,044
Total deposits 103,938 103,311
Accrued interest payable 470 421
Other borrowed money 20,225 11,475
Other liabilities 649 518
Total liabilities 125,282 115,725
STOCKHOLDERS' EQUITY
Capital stock, common, par value - $ 0.625;
4,000,000 shares authorized; 492,700
shares issued and outstanding, at
September 30, 2000 and 495,000 issued and
outstanding, at December 31, 1999 309 309
Treasury stock, at cost - 2,300 shares ( 93) 0
Surplus 2,051 2,051
Retained earnings 11,859 11,076
Net unrealized gains/(losses) available-
for-sale securities ( 657) ( 683)
Total stockholders' equity 13,469 12,753
Total liabilities and
stockholders' equity $ 138,751 $ 128,478
* Condensed from audited financial statements
The accompanying notes are an integral part of these condensed
financial statements.
Page 3 of 18 pages
FULTON BANCSHARES CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
2000 1999
(000 Omitted)
Interest & Dividend Income
Interest & fees on loans $ 2,198 $ 1,887
Interest & dividends on investment
securities:
U.S. Government securities 230 201
Obligations of state & political
subdivisions 50 76
Other interest & dividend income 107 86
Total interest & dividend income 2,585 2,250
Interest Expense
Interest on deposits 1,085 931
Interest on federal funds purchased 0 1
Interest on other borrowed money 292 160
Total interest expense 1,377 1,092
Net interest income before
provision for loan losses 1,208 1,158
Provision for loan losses 15 80
Net interest income after provision
for loan losses 1,193 1,078
Other Income
Service charges on deposit accounts 45 38
Other fee income 23 33
Other noninterest income 56 65
Securities gains (losses) 2 0
Total other income 126 136
Other Expense
Salaries and employee benefits 405 348
Fixed asset expenses (including
depreciation) 184 156
FDIC insurance premiums 6 2
Other noninterest expenses 271 237
Total other expenses 866 743
Net income before income taxes 453 471
Applicable income taxes 106 96
Net income $ 347 $ 375
Weighted average number of shares
outstanding 493,524 495,000
Net income per share $ .70 $ .76
Cash dividends declared per share $ .23 $ .20
The accompanying notes are an integral part of these condensed
financial statements.
Page 4 of 18 pages
FULTON BANCSHARES, CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
THREE MONTHS ENDED SEPTEMBER 30, 2000 and 1999
(UNAUDITED)
2000 1999
(000 Omitted)
Net income $ 347 $ 375
Other comprehensive income, net of tax
Unrealized gain (loss) on investments
available for sale 81 ( 218)
Reclassification adjustment for gains
(losses) included in net income 2 0
Comprehensive income $ 430 $ 157
The accompanying notes are an integral part of these condensed
financial statements.
Page 5 of 18 pages
FULTON BANCSHARES CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
2000 1999
(000 Omitted)
Interest & Dividend Income
Interest & fees on loans $ 6,267 $ 5,443
Interest & dividends on investment
securities:
U.S. Government securities 695 631
Obligations of state & political
subdivisions 152 226
Interest on federal funds sold 4 1
Other interest & dividend income 291 257
Total interest & dividend income 7,409 6,558
Interest Expense
Interest on deposits 3,150 2,774
Interest on federal funds purchased 6 4
Interest on other borrowed money 626 420
Total interest expense 3,782 3,198
Net interest income before
provision for loan losses 3,627 3,360
Provision for loan losses 45 180
Net interest income after provision
for loan losses 3,582 3,180
Other Income
Service charges on deposit accounts 120 111
Other fee income 85 93
Other noninterest income 145 237
Securities gains (losses) 7 2
Total other income 357 443
Other Expense
Salaries and employee benefits 1,150 985
Fixed asset expenses (including
depreciation) 537 448
FDIC insurance premiums 16 8
Other noninterest expenses 816 765
Total other expenses 2,519 2,206
Net income before income taxes 1,420 1,417
Applicable income taxes 346 302
Net income $ 1,074 $ 1,115
Weighted average number of shares
outstanding 494,504 495,000
Net income per share $ 2.17 $ 2.25
Cash dividends declared per share $ .59 $ .54
The accompanying notes are an integral part of these condensed
financial statements.
Page 6 of 18 pages
FULTON BANCSHARES, CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
2000 1999
(000 Omitted)
Net income $ 1,074 $ 1,115
Other comprehensive income, net of tax
Unrealized gain (loss) on investments
available for sale 19 ( 473)
Reclassification adjustment for gains
(losses) included in net income 7 ( 2)
Comprehensive income $ 1,100 $ 640
The accompanying notes are an integral part of these condensed
financial statements.
Page 7 of 18 pages
FULTON BANCSHARES, CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2000 and 1999
(UNAUDITED)
2000 1999
(000 Omitted)
Cash flows from operating activities:
Net income $ 1,074 $ 1,115
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 280 223
Provision for loan losses 45 180
(Gain) on sale - Securities ( 7) 0
Other - Net ( 234) ( 228)
Net cash provided by operating activities 1,158 1,290
Cash flows from investing activities:
Purchase of investment securities -
available-for-sale ( 1,191) ( 939)
Purchase of Federal Home Loan Bank Stock ( 265) ( 293)
Sales of available-for-sale securities 656 1,843
Maturities of available-for-sale securities 525 2,986
Net (increase) in loans ( 9,258) ( 9,805)
Proceeds of director's life insurance 0 383
Purchase of officers' life insurance ( 1,020) 0
Deposits/improvements on OREO property 0 ( 90)
Purchases of & deposits on bank premises
and equipment - net ( 137) ( 1,217)
Net cash (used) by investing activities ( 10,690) ( 7,132)
Cash flows from financing activities:
Net increase (decrease) in deposits 627 ( 296)
Dividends paid ( 291) ( 268)
Net increase (decrease)in federal funds
borrowed 0 ( 2,100)
Purchase of treasury stock ( 93) 0
Net increase (decrease) in other
borrowed money 8,750 7,850
Net cash provided by financing activities 8,993 5,186
Net increase (decrease) in cash and cash
equivalents ( 539) ( 656)
Cash and cash equivalents, beginning balance 4,582 3,301
Cash and cash equivalents, ending balance $ 4,043 $ 2,645
Supplemental disclosure of cash flows information:
Cash paid during the period for:
Interest $ 3,101 $ 3,146
Income taxes 388 371
Supplemental schedule of noncash investing
and financing activities:
Change in net unrealized gain on investments
available for sale (net of deferred taxes) 26 ( 475)
The accompanying notes are an integral part of these condensed
financial statements.
Page 8 of 18 pages
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
Review of Interim Financial Statements
The condensed consolidated financial statements as of and for
the nine months ended September 30, 2000 and 1999 have been
reviewed by independent certified public accountants. Their
report on the review is attached as Exhibit 99 to the 10-Q
filing.
Note 1. Basis of Presentation
The financial information presented at and for the nine
months ended September 30, 2000 and 1999 is unaudited.
Information presented at December 31, 1999 is condensed from
audited year-end financial statements. However, unaudited
information reflects all adjustments (consisting solely of
normal recurring adjustments) that are, in the opinion of
management, necessary for a fair presentation of the
financial position, results of operations and cash flows for
the interim period.
Note 2. Principles of Consolidation
The consolidated financial statements include the accounts of
the corporation and its wholly-owned subsidiaries, Fulton
County National Bank & Trust Company and the Fulton County
Community Development Corporation. All significant
intercompany transactions and accounts have been eliminated.
Note 3. Cash Flows
For purposes of the statements of cash flows, the corporation
has defined cash and cash equivalents as those amounts
included in the balance sheet captions "cash and due from
banks" and "federal funds sold". As permitted by Statement
of Financial Accounting Standards No. 104, the corporation
has elected to present the net increase or decrease in
deposits in banks, loans and time deposits in the statements
of cash flows.
Note 4. Federal Income Taxes
For financial reporting purposes the provision for loan
losses charged to operating expense is based on management's
judgment, whereas for federal income tax purposes, the amount
allowable under present tax law is deducted. Additionally,
certain expenses are charged to operating expense in the
period the liability is incurred for financial reporting
purposes, whereas for federal income tax purposes, these
expenses are deducted when paid. As a result of these timing
differences, deferred income taxes are provided in the
financial statements. Federal income taxes were computed
after reducing pretax accounting income for nontaxable
municipal and loan income.
Page 9 of 18 pages
Note 5. Other Commitments
In the normal course of business, the bank makes various
commitments and incurs certain contingent liabilities which
are not reflected in the accompanying financial statements.
These commitments include various guarantees and commitments
to extend credit and the bank does not anticipate any losses
as a result of these transactions.
Note 6. Earnings Per Share of Common Stock
Earnings per share of common stock were computed based on an
average of 493,524 shares for the quarter ended September 30,
2000 and 495,000 shares for the quarter ended September 30,
1999.
Note 7. Investment Securities
The carrying amounts of investment securities and their
approximate fair values at September 30, 2000 were as
follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains (Losses) Value
Debt securities available for sale:
FNMA/FHLMC non-
cumulative
preferred
stocks $ 5,489,344 $ 0 ($ 553,855) $ 4,935,489
State & municipal
securities 3,902,782 15,440 ( 140,299) 3,777,923
U.S. Government
agencies 10,250,507 0 ( 225,817) 10,024,690
Mortgage-backed
securities 4,346,390 1,217 ( 102,242) 4,245,365
Corporate bonds 499,260 9,825 0 509,085
Equity
securities 132,000 0 0 132,000
$ 24,620,283 $ 26,482 ($ 1,022,213) $ 23,624,552
There were no securities categorized "Held-to-maturity" or
"Trading" at September 30, 2000.
Note 8. Comprehensive Income
Statement of Financial Accounting Standards (SFAS) No. 130,
"Reporting of Comprehensive Income", became effective for
fiscal years and interim reporting periods beginning after
December 15, 1997.
Comprehensive income is defined as the change in equity from
transactions and other events from nonowner sources. It
includes all changes in equity except those resulting from
investments by owners and distributions to owners. The only
element of "other comprehensive income" that the Bank has is
the unrealized gain or loss on available for sale securities.
Consequently, a "Statement of Comprehensive Income" has been
included in this filing.
Page 10 of 18 pages
FULTON BANCSHARES CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
Net after tax income for the first nine months of 2000 was
$ 1,074,000 compared to $ 1,115,000 for the same period in 1999,
representing a decrease of $ 41,000, or 3.7%. Net income on an
adjusted per share basis for the first nine months of 2000 was
$ 2.17, a decrease of $ .08 from the $ 2.25 per share realized during
the nine months ended September 30, 1999.
RESULTS OF OPERATIONS
Third Quarter 2000 vs. Third Quarter 1999
Interest income for the third quarter of 2000 was $ 2,585,000
compared with $ 2,250,000 earned during the same period in 1999, for
an increase of $ 335,000, or 14.9%. The increase is due primarily to
a combination of a higher average balance of loans, which typically
produce higher yields than investments, and higher rates on loans, in
2000 compared with the same period in 1999. Management expects
average rates earned for the rest of 2000 to be higher than the
previous year since interest rates have increased.
Interest expense for the third quarter of 2000 was $ 1,377,000,
an increase of $ 285,000, or 26.1% over the $ 1,092,000 incurred for
the same period in 1999. The increase was due primarily to a
combination of higher average balances and higher interest rates of
time deposits and additional borrowings, which were used to fund loan
growth. Management expects interest expense to be higher for the rest
of 2000 because borrowed monies or more costly time deposits most
likely will be used to fund the loan growth.
Net interest income for the third quarter of 2000 totaled
$ 1,208,000, up $ 50,000, or 4.3%, from the third quarter of 1999.
Nine Months 2000 vs. Nine Months 1999
Interest income for the first nine months of 2000 was
$ 7,409,000 compared with $ 6,558,000 as of September 30, 1999, for an
increase of $ 851,000, or 13.0%. The increase was due primarily to a
combination of a higher average balance of loans, which typically
produce higher yields than investments, and higher rates on loans, in
2000 compared with the same period in 1999. Management expects
average rates earned for the rest of 2000 to be higher than the
previous year since interest rates have increased.
Interest expense for the first nine months of 2000 was
$ 3,782,000, an increase of $ 584,000, or 18.3% over the
$ 3,198,000 incurred for the same period in 1999. The increase was
due primarily to a combination of higher average balances and higher
interest rates of time deposits and additional borrowings, which were
used to fund loan growth. Management expects interest expense to be
higher for the rest of 2000 because borrowed monies or more costly
time deposits most likely will be used to fund the loan growth.
Page 11 of 18 pages
Net interest income for the first nine months of 2000 totaled
$ 3,627,000, up $ 267,000, or 7.9%, from September 30, 1999.
Liquidity and interest rate risk are continuously monitored through
Asset-Liability Committee reports. Management plans to protect its
net interest margin by competitively pricing loans and deposits and by
structuring interest-earning assets and liabilities in such a way that
they can be repriced in response to changes in market interest rates.
NONINTEREST INCOME
Third Quarter 2000 vs. Third Quarter 1999
Third quarter 2000 noninterest income decreased to $ 126,000 from
$ 136,000, or 7.4%. Service charges on deposit accounts increased
$ 7,000, or 18.4%, and securities gains of $ 2,000 were reported.
Other fee income and other noninterest income decreased $ 10,000, or
30.3%, and $ 9,000, or 13.8%, respectively.
Nine Months 2000 vs. Nine Months 1999
Noninterest income for the first nine months of 2000 and the same
period in 1999 was $ 357,000 and $ 443,000, respectively. Service
charges on deposit accounts increased $ 9,000, or 8.1%, while other
fee income decreased $ 8,000, or 8.6%. Other noninterest income
decreased $ 92,000, or 38.8%, primarily due to director life insurance
benefit income of $ 114,000 reported during the first and third
quarters of 1999. Securities gains of $ 7,000 were reported for the
first nine months of 2000 compared with $ 2,000 for the same period in
1999.
NET INTEREST MARGIN
The net interest margin for the first nine months of both 2000
and 1999 was 4.06%. Management plans to protect its net interest
margin by competitively pricing its loans and deposits and by
structuring interest-earning assets and liabilities so they can be
repriced in response to changes in market interest rates.
NONINTEREST EXPENSES
Third Quarter 2000 vs. Third Quarter 1999
Noninterest expenses for the third quarter of 2000 totaled
$ 866,000, an increase of $ 123,000, or 16.6%, over the $ 743,000
for the third quarter of 1999. Salaries and employee-related expenses
were up $ 57,000, or 16.4%, primarily due to the addition of two
branch offices in July and November, 1999, and merit pay increases.
Fixed asset expenses increased $ 28,000, or 17.9%, primarily due to
increased equipment and building maintenance costs and depreciation
for the additional branch offices. Other noninterest expenses
increased by $ 38,000, or 16.0%, due to increases in advertising and
promotion costs, telephone, transportation, and other operating
expenses.
Page 12 of 18 pages
Nine Months 2000 vs. Nine Months 1999
Noninterest expenses for the first nine months of 2000 and the
same period in 1999 were $ 2,519,000 and $ 2,206,000, respectively.
Salaries and employee-related expenses were up $ 165,000, or 16.8%,
primarily due to the addition of two branch offices in July and
November, 1999, and merit pay increases. Fixed asset expenses
increased $ 89,000, or 19.9%, primarily due to increased equipment and
building maintenance costs and depreciation for the additional branch
offices. Other noninterest expenses increased $ 51,000, or 6.6%,
primarily due to increases in advertising and promotion costs,
telephone, transportation, and other operating expenses.
INCOME TAXES
The income tax provision for the third quarter of 2000 was
$ 106,000 compared with $ 96,000 for the third quarter of 1999. The
effective income tax rate for the first nine months of 2000 was 23.4%
compared with 20.3% for the same period in 1999. The increase was
primarily due to a 33% decrease in tax-exempt interest on obligations
of state and political subdivisions, and the 1999 receipt of
nontaxable director life insurance benefits.
PROVISION FOR LOAN LOSSES
A $ 45,000 provision for loan losses was made for the first
nine months of 2000 compared with $ 180,000 for the first nine months
of 1999. The provisions were made based on management's evaluation
of the reserve for possible loan losses at September 30, 2000 and
1999.
A summary of the allowance for loan losses for the nine months
ended September 30, 2000 and 1999 is as follows:
ANALYSIS OF ALLOWANCE FOR LOAN LOSSES
(In 000's)
September 30, September 30,
2000 1999
Allowance for loan losses
Beginning of period $ 800 $ 580
Loans charged-off during the period:
Real estate loans 0 0
Installment loans 23 25
Commercial and all other loans 3 13
Total charge-offs 26 38
Recoveries of loans previously
charged-off:
Real estate loans 0 0
Installment loans 3 7
Commercial and all other
loans 2 61
Total recoveries 5 68
Net loans (charged-off) received ( 21) 30
Provision for loan losses charged to
operations 45 180
Allowance for loan losses - end of
period $ 824 $ 790
Page 13 of 18 pages
Loans 90 days or more past due (still accruing interest) and
those on nonaccrual status were as follows at September 30:
NONPERFORMING LOANS
(In 000's)
90 Days or More
Past Due Nonaccrual Status
2000 1999 2000 1999
Real estate loans $ 293 $ 785 $ 0 $ 0
Installment loans 15 7 0 0
Demand and time loans 42 4 0 0
Total loans $ 350 $ 796 $ 0 $ 0
There were no restructured loans for any of the time periods set
forth above.
FINANCIAL CONDITION
Assets
Total assets on September 30, 2000 were $ 138,751,000, compared
with $ 128,478,000, on December 31, 1999 for an increase of 8.0%.
Management intends to contain growth and concentrate on maintaining
adequate profit margins. Net loans on September 30, 2000 stood at
$ 100,208,000, an increase of 10.1% from $ 90,995,000 on December 31,
1999. The loan loss reserve at September 30, 2000 was $ 824,000 and
is considered adequate, in management's judgment, to absorb possible
loan losses on existing loans.
Liabilities
Total deposits increased 0.6% to $ 103,938,000 as of
September 30, 2000 compared with $ 103,311,000 at December 31, 1999.
Noninterest-bearing demand deposits and time deposits increased 4.2%
and 3.0%, respectively, while interest-bearing savings deposits
decreased 5.7%.
Capital
Total equity capital as of September 30, 2000 was $ 13,469,000
representing 9.7% of total assets, an increase of $ 716,000 from the
$ 12,753,000 reported on December 31, 1999. Accumulated earnings for
the first nine months of 2000 and a $ 28,000 decrease in net
unrealized holding losses (net of tax effect) were partially offset by
dividends declared and paid of $ 292,000. On July 20, 2000, the Board
of Directors announced the approval of a plan to purchase, in open and
privately negotiated transactions, up to 2% of its shares of
outstanding common stock. As of September 30, 2000, the company had
repurchased 2,300 shares, representing 0.46% of its shares of
outstanding common stock. It is the intention of management and the
Board of Directors to continue to pay a fair return on the
stockholders' investment while retaining adequate earnings to allow
for continued growth.
Page 14 of 18 Pages
REGULATORY CAPITAL
The company maintains capital ratios that are well above the
minimum total capital levels required by federal regulatory
authorities, including risk-based capital guidelines. A comparison of
Fulton Bancshares Corporation's capital ratios to regulatory minimum
requirements at September 30, 2000 is as follows:
Fulton Bancshares Regulatory Minimum
Corporation Requirements
Leverage ratio 10.1% 4.0%
Risk based capital ratios:
Tier I (core capital) 13.8% 4.0%
Combined tier I and tier
II (core capital plus
allowance for loan losses) 14.5% 8.0%
BALANCE SHEET ANALYSIS
The following table highlights the changes in the balance
sheet. Since quarter-end balances can be distorted by one-day
fluctuations, an analysis of changes in the quarterly averages is
provided to give a better indication of balance sheet trends.
AVERAGE BALANCE SHEETS
(In 000's)
Third Quarter
2000 1999
ASSETS
Securities available for sale $ 23,602 $ 24,121
Other investments 1,036 863
Loans 99,766 89,472
Total interest-earning assets 124,404 114,456
Cash and due from banks 3,488 3,197
Bank premises and equipment 3,599 3,187
All other assets 5,132 4,322
Allowance for loan losses ( 815) ( 713)
Total assets $ 135,808 $ 124,449
LIABILITIES
Interest-bearing deposits in domestic
offices $ 90,814 $ 86,887
Federal funds purchased 0 39
Other borrowings 18,574 12,947
Total interest-earning
liabilities 109,388 99,873
Noninterest-bearing deposits 12,627 11,274
All other liabilities 491 588
Total liabilities 122,506 111,735
Page 15 of 18 Pages
Third Quarter
2000 1999
STOCKHOLDERS' EQUITY
Common stockholders' equity $ 13,944 $ 13,002
Net unrealized holding gains (losses),
net of tax ( 642) ( 288)
Total stockholders' equity 13,302 12,714
Total liabilities and stockholders'
equity $ 135,808 $ 124,449
Page 16 of 18 pages
PART II - OTHER INFORMATION
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
None
Item 3 - Defaults Upon Senior Securities
Not applicable
Item 4 - Submission of Matters to a Vote of Security Holders
None
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit Number Referred to Description
Item 601 of Regulation S-K of Exhibit
27 Financial Data Schedule
99 Report of Independent
Accountant's on Interim
Financial Statements
(b) Reports on Form 8-K:
None
Page 17 of 18 pages
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
/s/
Clyde H. Bookheimer,
President and Chief Executive
Officer
Date /s/
Doriann Hoffman, Vice
President (Principal Financial
Officer)
Page 18 of 18 pages
9-MOS
DEC-31-2000
SEPT-30-2000
4,043
0
0
0
0
23,624
23,624
101,032
824
138,751
103,938
20,225
1,119
0
0
0
309
13,160
138,751
6,267
847
295
7,409
3,150
3,782
3,627
45
7
2,519
1,420
1,074
0
0
1,074
2.17
2.17
4.06
0
350
0
0
800
26
5
824
824
0
0
EXHIBIT 99
INDEPENDENT ACCOUNTANT'S REPORT
Board of Directors
Fulton Bancshares Corporation and Subsidiaries
McConnellsburg, Pennsylvania
We have reviewed the accompanying consolidated balance sheet
of Fulton Bancshares Corporation and Subsidiaries as of September 30,
2000 and the related consolidated statements of income, comprehensive
income, and cash flows for the interim periods ended September 30,
2000 and 1999. These consolidated financial statements are the
responsibility of the corporation's management.
We conducted our reviews in accordance with standards
established by the American Institute of Certified Public Accountants.
A review of interim financial information consists principally of
applying analytical procedures to financial data and making inquiries
of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the consolidated financial
statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our reviews, we are not aware of any material
modifications that should be made to the accompanying consolidated
financial statements for them to be in conformity with generally
accepted accounting principles.
/s/ Smith Elliott Kearns & Company, LLC
SMITH ELLIOTT KEARNS & COMPANY, LLC
Chambersburg, Pennsylvania
November 13, 2000
