<PAGE> 1
U.S. 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, 1998
------------------
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: 33-31093-A
----------
WAYNE BANCORP, INC.
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Georgia 58-1858246
---------------------- ---------------------------------
(State of incorporation) (I.R.S. Employer Identification No.)
818 South First Street, Jesup, Georgia 31545
--------------------------------------------
(Address of principal executive offices)
(912) 427-2265
-------------------------
(Issuer's telephone number)
Not Applicable
--------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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
--- ---
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
On November 9, 1998, 523,648 shares of the issuer's common stock, par
value $1.00 per share, were issued and outstanding.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
WAYNE BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
------------- ------------
ASSETS
<S> <C> <C>
Cash and due from banks $ 1,487,732 $ 3,075,396
Interest-bearing deposits 37,580 124,003
Federal funds sold 2,340,000 11,970,000
Investment securities:
Held-to-maturity 6,852,109 5,514,009
Available-for-sale 1,529,513 535,451
Loans, less allowances for loan losses of
$342,711 and $273,405, respectively 33,296,385 28,397,905
Premises and equipment, net 1,098,286 907,405
Deferred income taxes 79,379 45,536
Other assets 550,398 488,837
----------- -----------
Total assets $47,271,382 $51,058,542
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Noninterest-bearing deposits $ 6,978,297 $13,779,191
Interest-bearing deposits 32,743,222 30,775,238
----------- -----------
Total deposits 39,721,519 44,554,429
Accrued interest expense 285,405 258,185
Accrued income taxes 3,622 19,300
Other liabilities 74,172 182,572
----------- -----------
Total liabilities 40,084,718 45,014,486
----------- -----------
Commitments and contingencies
Stockholders' equity:
Common stock, $1 par value; authorized 10,000,000
shares; 458,888 and 424,888 shares issued and
outstanding, respectively 458,888 424,888
Surplus 4,084,020 3,778,020
Retained earnings 2,627,295 1,807,771
Unrealized gain (loss) net - AFS investments 16,461 33,377
----------- -----------
Total stockholders' equity 7,186,664 6,044,056
----------- -----------
Total liabilities and stockholders' equity $47,271,382 $51,058,542
=========== ===========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
1
<PAGE> 3
WAYNE BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ---------------------------
1998 1997 1998 1997
---------- -------- ---------- -----------
<S> <C> <C> <C> <C>
Interest income:
Loans, including fees $ 889,682 $803,083 $2,513,957 $ 2,222,402
Interest-bearing deposits 522 1,945 1,544 6,074
Federal funds sold 15,077 42,774 134,884 123,853
Investment securities:
Taxable 20,643 14,402 50,064 101,623
Nontaxable 83,565 68,505 242,528 180,523
Dividends 3,605 2,870 16,059 14,554
---------- -------- ---------- -----------
Total interest income 1,013,094 933,579 2,959,036 2,649,029
---------- -------- ---------- -----------
Interest expense:
Deposits 360,696 337,672 1,069,375 944,394
Federal funds purchased 461 0 461 118
---------- -------- ---------- -----------
Total interest expense 361,157 337,672 1,069,836 944,512
---------- -------- ---------- -----------
Net interest income 651,937 595,907 1,889,200 1,704,517
Provision for loan losses 45,000 36,000 135,000 108,000
---------- -------- ---------- -----------
Net interest income after
provision for loan losses 606,937 559,907 1,754,200 1,596,517
---------- -------- ---------- -----------
Other income:
Service charges on deposits 126,989 120,490 344,010 345,182
Other operating income 55,528 46,865 157,865 118,385
Securities gains (losses), net 0 0 26,244 (27,332)
---------- -------- ---------- -----------
Total other income 182,517 167,355 528,119 436,235
---------- -------- ---------- -----------
Other expenses:
Salaries and employee benefits 180,095 154,397 503,995 454,037
Net occupancy and equipment expense 55,443 49,736 158,080 149,238
Other operating expenses 142,219 126,065 437,640 411,412
---------- -------- ---------- -----------
Total other expenses 377,757 330,198 1,099,715 1,014,687
---------- -------- ---------- -----------
Profit before income taxes 411,697 397,064 1,182,604 1,018,065
Income tax expense 125,023 115,246 363,080 288,221
---------- -------- ---------- -----------
Net Profit $ 286,674 $281,818 $ 819,524 $ 729,844
========== ======== ========== ===========
Earnings per common share $ 0.62 $ 0.71 $ 1.79 $ 1.85
========== ======== ========== ===========
Weighted average shares outstanding 458,888 397,900 457,931 394,763
========== ======== ========== ===========
Earnings per common share fully diluted $ 0.56 $ 0.64 $ 1.64 $ 1.63
========== ======== ========== ===========
Weighted average fully diluted shares outstanding 511,918 440,341 500,231 447,568
========== ======== ========== ===========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
2
<PAGE> 4
WAYNE BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------
1998 1997
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net profit $ 819,524 $ 729,844
Adjustments to reconcile net profit to net cash provided by
operating activities:
Depreciation, amortization, and accretion, net 80,040 71,575
Provision for loan losses 135,000 108,000
Securities (gains) losses, net (26,244) 27,332
Net decrease (increase) in available-for-sale securities 25,631 (50,560)
Net decrease (increase) in deferred taxes (33,843) 1,900
Net decrease (increase) in other assets (61,561) (108,192)
Net increase (decrease) in accrued interest payable 27,220 43,963
Net increase (decrease) in accrued income taxes (15,678) (325,895)
Net increase (decrease) in other liabilities (108,400) (31,031)
Net increase (decrease) in unrealized gain (loss) AFS
investments (16,916) 33,370
------------ -----------
Net cash provided by operating activities 824,773 500,306
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment securities held-to-maturity (1,336,719) (1,754,154)
Purchase of investment securities available-for-sale (1,139,275) (371,617)
Proceeds from maturities of interest-bearing time deposits 86,424 98,864
Proceeds from maturities of securities held-to-maturity 0 135,000
Proceeds from maturities of securities available-for-sale 0 1,500,000
Proceeds from sales of securities available-for-sale 145,928 3,200,776
Net increase in loans (5,033,480) (5,675,670)
Purchase of fixed assets (272,405) (8,623)
------------ -----------
Net cash used by investing activities (7,549,527) (2,875,424)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in deposits (4,832,910) (2,604,115)
Proceeds from issuance of common stock 340,000 266,020
------------ -----------
Net cash used by financing activities (4,492,910) (2,338,095)
------------ -----------
Net decrease in cash and cash equivalents (11,217,664) (4,713,213)
Cash and cash equivalents at beginning of period 15,045,396 9,665,896
------------ -----------
Cash and cash equivalents at end of period $ 3,827,732 $ 4,952,683
============ ===========
SUPPLEMENTAL DISCLOSURES OF CASH PAID FOR:
Interest $ 1,042,155 $ 900,431
Income taxes $ 521,997 $ 633,409
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
3
<PAGE> 5
WAYNE BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310 (b)
of Regulation S-B of the Securities and Exchange Commission. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. However, in
the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
Operating results for the nine months ended September 30, 1998, are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1998. For further information, please refer to the consolidated
financial statements and footnotes thereto for the Company's fiscal year ended
December 31, 1997, included in the Company's Form 10-KSB for the year ended
December 31, 1997.
Note 2. Adoption of New Accounting Principles
During the fourth quarter of 1997, the Company adopted Financial
Accounting Standards Board Statement No. 128, "Earnings Per Share." SFAS 128
replaces the presentation of primary earnings per share with a presentation of
basic earnings per share and it requires a dual presentation of basic and
diluted earnings per share on the face of the income statement. SFAS 128 was
effective for financial statements issued for periods ending after December 15,
1997. The adoption of this pronouncement by the Company in 1997 resulted in the
restatement of the Company's prior period earnings per share disclosures.
4
<PAGE> 6
This Report contains statements which constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These statements appear in a
number of places in this Report and include all statements regarding the intent,
belief or current expectations of the Company, its directors or its officers
with respect to, among other things: (i) the Company's financing plans; (ii)
trends affecting the Company's financial condition or results of operations;
(iii) the Company's growth strategy and operating strategy; and (iv) the
declaration and payment of dividends. Investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of various factors
discussed herein and those factors discussed in detail in the Company's filings
with the Securities and Exchange Commission.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Wayne Bancorp, Inc. (the "Company") was organized under the Georgia
Business Corporation Code on September 5, 1989, to become a one-bank holding
company by acquiring all the capital stock of Wayne National Bank (the "Bank")
upon its formation. The Bank commenced business on September 26, 1990, and the
only activity of the Company since then has been the ownership and operation of
the Bank. The Bank is engaged in a general commercial and retail banking
business from its main office in Jesup, Georgia.
The following discussion of the financial condition and results of
operations of the Company should be read in conjunction with the Company's
unaudited consolidated financial statements and related notes and other
statistical information included elsewhere herein.
Results of Operations
The Company experienced a net profit during the quarter ended September
30, 1998, of $286,674, compared to $281,818 during the same period of 1997. This
brings net profits for the nine months ended September 30, 1998, to $819,524,
compared to $729,844 for the nine months ended September 30, 1997. The
improvement in earnings for the third quarter is attributed to higher net
interest income which is up 9.4% from the third quarter of 1997. The improvement
in net interest income can be attributed to a 9.8% increase in earning assets to
$42.4 million as of September 30, 1998, from $38.6 million as of September 30,
1997. The segment of earning assets showing the most significant increase was
loans which grew $4.7 million, or 16.2%, during the twelve months ending
September 30, 1998. The Company's net interest margin was unchanged at 6.4% for
the quarter ended September 30, 1998, compared to 6.4% for the same period of
1997.
Noninterest income for the quarter ended September 30, 1998, was
$182,517, up 9.1% from $167,355 for the same quarter of 1997. For the nine
months ended September 30, 1998, noninterest income increased $91,884, or 21.1%,
to $528,119 from $436,235 for the same period of 1997. The increase was
primarily the result of improved mortgage origination fees which were up 93.7%
to $87,218 for the nine months ended September 30, 1998, compared to $45,026 for
the same period of 1997. This increase is primarily attributable to an increase
in mortgage loan activity resulting from falling mortgage loan interest rates.
Noninterest expenses for the quarter ended September 30, 1998, was
$377,757, an increase of $47,559, or 14.4%, from $330,198 for the same period of
1997. Salaries and benefits were up $25,698, or 16.6%, to $180,095 for the
quarter ended September 30, 1998, from $154,397 for the same period of 1997,
primarily as a result of increases in staffing levels at the Bank, and overtime
pay.
5
<PAGE> 7
Other operating expenses were up $16,154, or 12.8%, to $142,219 for the
quarter ended September 30, 1998, from $126,065 for the same period of 1997.
This increase is primarily a result of data processing expenditures associated
with the Bank's efforts to prepare for the year 2000. For the nine month period
ended September 30, 1998, noninterest expense increased $85,028, or 8.4%, to
$1,099,715 from $1,014,687 for the same period of 1997. This increase in
noninterest expense can also be attributed to increases in staffing levels at
the Bank and year 2000 expenditures.
Loan losses, net of recoveries, during the quarter ended September 30,
1998, were $34,895 compounded to $37,480 for the same period one year ago. Loan
losses, net of recoveries, amounted to $65,695 for the nine months ended
September 30, 1998, compounded to $87,480 for the nine months ended September
30, 1997. The majority of loan losses continue to be the result of consumer
bankruptcies on secured loans. Past due loans amounted to 1.02% of total loans
as of September 30, 1998, well below the national average of our peer group of
2.99%.
During the nine month period ended September 30, 1998, the loan loss
reserve increased by $69,305, bringing the allowance for loan losses to 1.03% of
loans, compared to .81% of loans at September 30, 1997. Based on its review,
management believes the allowances for loan losses is adequate at this time.
However, there can be no assurance that charge-offs in future periods will not
exceed the allowance for loan losses or that additional increases in the loan
loss allowance will not be required.
Return on average assets and average equity, on an annualized basis,
for the quarter ended September 30, 1998, were 2.51% and 16.10%, respectively,
compared to 2.76% and 20.43%, respectively, for the same quarter of 1997. Return
on average assets and average equity, on an annualized basis, for the nine
months ended September 30, 1998, were 2.43% and 16.15%, respectively, compared
to 2.49% and 18.98%, respectively, for the same period of 1997. Earnings per
share, on a fully diluted basis, for the nine and three month periods ended
September 30, 1998, amounted to $1.64 and $.56, respectively, compared to $1.63
and $.64, respectively, for the same periods of 1997.
The Company's assets ended the third quarter of 1998 at $47.3 million,
down 7.4% from $51.1 million at December 31, 1997. This decrease can be
attributed to the reduction in seasonal local government tax deposits of
approximately $7.7 million at December 31, 1997, which deposits were
subsequently withdrawn by mid-January 1998. Total deposits ended the quarter at
$39.7 million, down 11.0% from $44.6 million at December 31, 1997, which
decrease is also related to the reduction in seasonal local government tax
deposits, offset by normal growth in Bank deposits. At September 30, 1998, the
Company's loan to deposit ratio was 83.8%, compared to 63.7% at December 31,
1997.
Management expects earnings to improve slightly during the final
quarter of 1998 over that experienced in the quarter just ended, contingent upon
no deterioration within the loan portfolio which would require excessive
provisions to the loan loss reserve. Although such expectations are based on
management's best judgment, actual results will depend upon a number of factors
that cannot be predicted with certainty and fulfillment of management's
expectations cannot be assured.
Liquidity and Sources of Capital
The $4.8 million reduction in deposits during the nine month period
ended September 30, 1998, is primarily reflected in federal funds sold which
decreased $9.6 million, offset by the $4.9 million increase in loans. The
reduction in federal funds sold is primarily attributed to the seasonal local
government tax deposits of approximately $7.7 million at December 31, 1997,
which deposits were
6
<PAGE> 8
withdrawn by mid-January 1998. During the first nine months of 1998, management
has expanded the held-to-maturity portion of the investment portfolio by
approximately $1.3 million through the purchase of municipal bonds. The
available-for-sale portion of the portfolio has increased approximately $1.0
million through the purchase of U.S. Treasury securities and equities. During
the first nine months of 1998, loans have increased by approximately $4.9
million, meeting management's expectations. The Company's liquid assets at
September 30, 1998, represented 11.4% of total assets, compared to 30.8% at
December 31, 1997.
During the first quarter of 1998, three directors of the Company
exercised warrants for the Company's common stock, par value $1.00 per share
(the "Common Stock"), resulting in the issuance of 34,000 shares of the Common
Stock. The exercise price was $10.00 per share, resulting in an injection of
$340,000 into the Company's capital during the first quarter of 1998. At
September 30, 1998, the Company's risk based capital ratio was 20.9% and its
leverage ratio was 15.8%, compared to 20.2% and 14.8%, respectively, at December
31, 1997. Both the Company and the Bank are, at this time, in compliance with
the Federal Reserve Board's and the OCC's capital requirements. Management
expects asset growth to continue at a deliberate and controllable pace during
the coming months and capital should continue to be adequate. However, no
assurances can be given in this regard, as rapid growth, deterioration in loan
quality and poor earnings, or a combination of these factors, could change the
Company's capital position in a relatively short period of time.
Year 2000 Issues
The Company utilizes an in-house data processing system for most of its
accounting functions. Management is in the process of upgrading the systems
which it has determined are not prepared for the year 2000 ("Year 2000").
Testing should be completed by the end of 1998. The Company also has a number of
personal computers, some of which, due to their age, are not Year 2000
compliant. Management budgeted approximately $180,000 to get all of its systems
Year 2000 compliant. To date, approximately $200,000 in capital expenditures has
been incurred and an additional $20,000 has been expensed. Management estimates
that it has completed approximately 90% of its Year 2000 efforts. The largest
Year 2000 exposure to most banks is the preparedness of the customers of the
banks. Management is addressing with its customers the possible consequences of
not being prepared for Year 2000. Should large borrowers not sufficiently
address this issue, the Company may experience an increase in loan defaults. The
amount of potential loss from this issue is not quantifiable. Management is
attempting to reduce this exposure by educating its customers.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the Company or
the Bank is a party or of which any of their property is the subject.
ITEM 2. CHANGES IN SECURITIES.
In January 1998, three directors of the Company exercised warrants for
the Common Stock, resulting in the issuance of 34,000 shares of the Common
Stock. The warrants had an exercise price of $10.00 per share and thus the
Company received $340,000. The Common Stock issued pursuant to the exercise of
the warrants represent unregistered securities, which issuance was considered to
be exempt
7
<PAGE> 9
from registration under the Securities Act of 1933 pursuant to Section 4(2) as a
transaction by an issuer not involving any public offering.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of security holders during
the quarter ended September 30, 1998.
ITEM 5. OTHER INFORMATION.
On October 21, 1998, the Company and First Banking Company of Southeast
Georgia, a Georgia corporation ("FBCG"), announced that they had signed a letter
of intent for FBCG to acquire the Company. The combination as proposed will be
effected by a merger in which FBCG common stock will be issued for the Company's
shares in a tax-free exchange, to be accounted for as a pooling of interests.
Pursuant to the proposed transaction, each shareholder of the Company will
receive 1.56837 shares (revised from 1.55 shares originally provided in the
letter of intent) of FBCG common stock for each share of Common Stock of the
Company held. Consummation of the proposed combination is subject to mutually
satisfactory due diligence, negotiation and execution of a definitive merger
agreement, approval by the shareholders of the Company, and approval of the
appropriate federal and state regulatory agencies.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
3(a) Articles of Incorporation and Articles of Amendment
of Company (incorporated by reference to Exhibit 3(a)
of Registration Statement on Form S-18, File No.
33-31093-A).
3(b) Bylaws of Company (incorporated by reference to
Exhibit 3(b) of Registration Statement on Form S-18,
File No. 33-31093-A).
10(a) Form of Stock Warrant Agreement (incorporated by
reference to Exhibit 10(c) of Registration Statement
on Form S-18, File No. 33-31093-A).
10(b) 1990 Employee Incentive Stock Option Plan
(incorporated by reference to Exhibit 10(d) of the
Annual Report on Form 10-K filed by the Company for
the fiscal year ended December 31, 1990).
10(c) Form of Employment Agreement for Executive Officers
(incorporated by reference to Exhibit 10(f) of the
Annual Report on Form 10-KSB filed by the Company for
the fiscal year ended December 31, 1992).
27(a) Financial Data Schedule (for SEC use only).
8
<PAGE> 10
27(b) Restated Financial Data Schedule For Nine Months
ended September 30, 1996 (for SEC use only).
27(c) Restated Financial Data Schedule For Nine Months
ended September 30, 1997 (for SEC use only).
99(a) Press Release dated October 21, 1998.
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed by the Company during
the quarter ended September 30, 1998.
9
<PAGE> 11
SIGNATURES
In accordance with 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.
WAYNE BANCORP, INC.
--------------------------------------------
(Registrant)
Date: November 11, 1998 By: /s/ Douglas R. Harper
------------------ ----------------------------------------
Douglas R. Harper
President, Chief Executive Officer &
Principal Financial Officer
10
<PAGE> 12
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page Number
- ------ ----------- -----------
<S> <C> <C>
3(a) Articles of Incorporation and Articles of Amendment of Company
(incorporated by reference to Exhibit 3(a) of Registration Statement on
Form S-18, File No. 33-31093-A).
3(b) Bylaws of Company (incorporated by reference to Exhibit 3(b) of
Registration Statement on Form S-18, File No. 33-31093-A).
10(a) Form of Stock Warrant Agreement (incorporated by reference to Exhibit
10(c) of Registration Statement on Form S-18, File No. 33-31093-A).
10(b) 1990 Employee Incentive Stock Option Plan (incorporated by reference to
Exhibit 10(d) of the Annual Report on Form 10-K filed by the Company
for the fiscal year ended December 31, 1990).
10(c) Form of Employment Agreement for Executive Officers (incorporated by
reference to Exhibit 10(f) of the Annual Report on Form 10-KSB filed by
the Company for the fiscal year ended December 31, 1992).
27(a) Financial Data Schedule (for SEC use only).
27(b) Restated Financial Data Schedule For Nine Months ended September 30,
1996 (for SEC use only).
27(c) Restated Financial Data Schedule For Nine Months ended September 30,
1997 (for SEC use only).
99(a) Press Release dated October 21, 1998.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 1,487,732
<INT-BEARING-DEPOSITS> 37,580
<FED-FUNDS-SOLD> 2,340,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,529,513
<INVESTMENTS-CARRYING> 6,852,109
<INVESTMENTS-MARKET> 7,312,281
<LOANS> 33,639,096
<ALLOWANCE> 342,711
<TOTAL-ASSETS> 47,271,382
<DEPOSITS> 39,721,519
<SHORT-TERM> 0
<LIABILITIES-OTHER> 363,199
<LONG-TERM> 0
0
0
<COMMON> 458,888
<OTHER-SE> 6,727,776
<TOTAL-LIABILITIES-AND-EQUITY> 7,186,664
<INTEREST-LOAN> 2,513,957
<INTEREST-INVEST> 310,195
<INTEREST-OTHER> 134,884
<INTEREST-TOTAL> 2,959,036
<INTEREST-DEPOSIT> 1,069,375
<INTEREST-EXPENSE> 1,069,836
<INTEREST-INCOME-NET> 1,889,200
<LOAN-LOSSES> 135,000
<SECURITIES-GAINS> 26,244
<EXPENSE-OTHER> 1,099,715
<INCOME-PRETAX> 1,182,604
<INCOME-PRE-EXTRAORDINARY> 1,182,604
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 819,524
<EPS-PRIMARY> 1.79
<EPS-DILUTED> 1.64
<YIELD-ACTUAL> 5.99
<LOANS-NON> 119,254
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 818,911
<ALLOWANCE-OPEN> 273,406
<CHARGE-OFFS> 104,821
<RECOVERIES> 39,126
<ALLOWANCE-CLOSE> 342,711
<ALLOWANCE-DOMESTIC> 342,711
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS FINANCIAL DATA SCHEDULE IS RESTATED FROM 9/30/96.
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,473,887
<INT-BEARING-DEPOSITS> 156,276
<FED-FUNDS-SOLD> 2,160,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 5,316,627
<INVESTMENTS-CARRYING> 2,435,955
<INVESTMENTS-MARKET> 2,456,768
<LOANS> 22,715,453
<ALLOWANCE> 203,054
<TOTAL-ASSETS> 35,493,236
<DEPOSITS> 30,630,558
<SHORT-TERM> 0
<LIABILITIES-OTHER> 471,231
<LONG-TERM> 0
0
0
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<LEGEND>
THIS FINANCIAL DATA SCHEDULE IS RESTATED FROM 9/30/97.
</LEGEND>
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<S> <C>
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0
0
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</TABLE>
<PAGE> 1
EXHIBIT 99(A)
FIRST BANKING COMPANY TO ACQUIRE WAYNE NATIONAL
STATESBORO, Ga.--(BUSINESS WIRE)--Oct. 21, 1998--First Banking Company of
Southeast Georgia (Nasdaq: FBCG news), Statesboro, Ga., and Wayne Bancorp, Inc.,
the parent company of Wayne National Bank, Jesup, Ga., today announced that they
have signed a letter of intent to combine.
The combination will be effected by a merger in which First Banking Company
common stock will be issued for shares of Wayne Bancorp in a tax-free exchange,
to be accounted for as a pooling of interests. Pursuant to the proposed
transaction, each holder of Wayne Bancorp shares will receive 1.55 shares of
First Banking Company stock for each share of Wayne Bancorp common stock.
Consummation of the proposed combination is subject to mutually satisfactory due
diligence, negotiation and execution of a definitive merger agreement, approval
by the shareholders of Wayne Bancorp, and approval of the appropriate federal
and state regulatory agencies. The combination is projected to be completed
during the first quarter of 1999 and it is not anticipated to be dilutive to
First Banking's earnings per share.
James Eli Hodges, Chief Executive Officer of First Banking Company, stated: "We
are delighted to welcome Doug Harper and the management team of Wayne National
Bank as part of the First Banking Company family. They have done an outstanding
job in building Wayne National, which has been a regional and state-wide leader
in high-performance banking."
J. Ashley Dukes, Chairman of Wayne Bancorp, Inc., stated: "We have spent some
time considering our best strategic alternatives. We wanted a partner with a
proven track record, a partner that would understand our marketplace and would
help both our bank and our marketplace continue to grow in the future, and a
partner with the potential to bring long-term value to our shareholders. First
Banking Company brings all of this to the table, and more. Apart from the
addition of new services, our customers will not know a transaction has taken
place. For our shareholders and our bankers, however, the combination with First
Banking Company will bring greater share liquidity and a vast array of new
products and services. We have known First Banking Company well for a number of
years, so working together in the future will not be a new challenge for us."
First Banking Company is a three-bank holding company headquartered in
Statesboro. At September 30, 1998, it had $380,000,000 in total assets,
$44,000,000 in capital, and net income of $4,384,000. It has 11 banking offices
in 5 cities in southeast Georgia. Shares of First Banking Company trade on the
Nasdaq National Market System under the symbol "FBCG." Its closing price on
October 21 was $25.50.
Wayne Bancorp has one subsidiary bank, Wayne National Bank, in Jesup, which had
total assets of September 30, 1998 of $46,000,000, total capital of $5,900,000,
and net income of $820,000. For the year ended December 31, 1997, Wayne National
earned over $1 million, had a return on average assets of over 2%, had a return
on average equity of over 20%, and achieved an operating efficiency ratio of
just over 50%. It has approximately 900 shareholders of record.
