<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________to___________________
Commission File Number: 0-18187
BANKERS CORP.
______________________________________________________
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-3257724
________________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
210 SMITH STREET, PERTH AMBOY, NEW JERSEY 08861
________________________________________________
Not Applicable
________________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
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 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
____ ____
SHARES OUTSTANDING ON November 12, 1996
COMMON STOCK, $.01 PAR VALUE - 12,378,184 SHARES
Page 1 of 14
Exhibit Index appears on page 11
<PAGE> 2
BANKERS CORP.
INDEX TO FORM 10-Q
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Statements of Condition at September 30, 1996
and December 31, 1995 (Unaudited). . . . . . . . . . . . . . . 3
Consolidated Statements of Income for the Three and
Nine Months Ended September 30, 1996 and 1995 (Unaudited). . . 4
Consolidated Statements of Changes in Stockholders' Equity
for the Nine Months Ended September 30, 1996 (Unaudited) . . . 5
Consolidated Statements of Cash Flows for the Nine
Months Ended September 30, 1996 and 1995 (Unaudited). . . . . 6
Notes to Unaudited Consolidated Financial Statements . . . . . 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . . . . 7
PART II. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . .11
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . .12
<PAGE> 3
<TABLE>
<CAPTION>
BANKERS CORP AND SUBSIDIARY
Consolidated Statements of Condition
(In Thousands)
At
September 30, December 31,
1996 1995
<S> <C> <C>
Assets: (unaudited)
Cash on hand and due from banks . . . . . . . . . . . $ 15,093 $ 23,337
Federal funds sold. . . . . . . . . . . . . . . . . . 1,100 0
___________ ____________
Cash and cash equivalents . . . . . . . . . . . . 16,193 23,337
Securities available for sale . . . . . . . . . . . . 33,790 0
Investment securities, held to maturity, estimated
market value of $28,028 and $67,735 at September
30, 1996 and December 31, 1995, respectively. . . 27,967 66,831
Mortgage and asset-backed securities, held to
maturity, estimated market value of $577,712 and
$463,116 at September 30, 1996 and Dec. 31, 1995,
respectively. . . . . . . . . . . . . . . . . . . 576,782 460,574
Loans net of unearned income and premiums . . . . . . 1,641,576 1,321,396
Less: Allowance for loan losses . . . . . . . . . 7,120 8,137
___________ ____________
Net loans . . . . . . . . . . . . . . . . . 1,634,456 1,313,259
Banking premises, furniture and equipment, net. . . . 11,102 11,357
Accrued interest receivable . . . . . . . . . . . . . 15,082 13,090
Intangible assets, net of accumulated amortization of
$8,523 and $7,931 at September 30, 1996 and
December 31,1995, respectively . . . . . . . . . 3,518 4,110
Other Real Estate Owned, net (OREO) . . . . . . . . . 5,960 6,057
Other assets. . . . . . . . . . . . . . . . . . . . . 5,300 3,300
___________ ____________
Total assets . . . . . . . . . . . . . . . . 2,330,150 1,901,915
___________ ____________
___________ ____________
Liabilities and Stockholders' Equity:
Due to depositors:
Interest bearing. . . . . . . . . . . . . . . . . 1,575,519 1,581,094
Non-interest bearing. . . . . . . . . . . . . . . 49,825 50,160
__________ ____________
Total deposits . . . . . . . . . . . . . . . 1,625,344 1,631,254
Short-term borrowings . . . . . . . . . . . . . . . . 487,781 67,245
Mortgage escrow deposits. . . . . . . . . . . . . . . 12,278 10,078
Income taxes payable. . . . . . . . . . . . . . . . . 1,007 869
Other liabilities. .. . . . . . . . . . . . . . . . . 16,211 5,531
___________ ____________
Total liabilities. . . . . . . . . . . . . . $2,142,621 $1,714,977
___________ ____________
Stockholders' equity:
Preferred stock, authorized 10,000,000 shares
None issued
Common stock, par value $.01: 20,000,000 shares
authorized, 14,269,200 shares issued . . . . 143 143
Additional paid-in capital . . . . . . . . . 101,138 101,138
Retained earnings. . . . . . . . . . . . . . . . . . 112,547 101,592
Less:
Unallocated Common stock held by the ESOP . . . . 421 621
Common stock in treasury, at cost: 1,891,016
shares and 1,347,043 shares, respectively. . 25,060 15,314
Net unrealized losses on securities available
for sale, net of tax . . . . . . . . . . . . 818 0
___________ ___________
Total stockholders' equity. . . . . . 187,529 186,938
___________ ___________
Total liabilities and stockholders' equity . $2,330,150 $ 1,901,915
___________ ___________
___________ ___________
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
BANKERS CORP AND SUBSIDIARY
Consolidated Statements of Income
(In Thousands, Except Per Share Data)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
(Unaudited) (Unaudited)
Interest income:
Real estate loans . . . . . . . . . . $29,079 $23,093 $ 80,202 $67,337
Other loans . . . . . . . . . . . . . 1,191 1,262 3,480 3,744
Mortgage and asset-backed securities. 7,856 6,741 22,681 19,658
Investment securities-taxable . . . . 1,104 1,252 4,020 4,233
Municipals-nontaxable . . . . . . . . 15 15 45 46
Short-term investments. . . . . . . . 0 119 73 173
Federal funds sold . . . . . . . . . 9 39 58 130
________ ________ _________ _________
Total interest income. . . . . . . 39,254 32,521 110,559 95,321
________ ________ _________ _________
Interest expense:
Interest on deposits . . . . . . . . 18,301 18,377 55,070 50,926
Short-term borrowings . . . . . . . . 5,285 637 9,379 2,826
________ ________ _________ _________
Total interest expense . . . . . . 23,586 19,014 64,449 53,752
________ ________ _________ _________
Net interest income . . . . . . . . . 15,668 13,507 46,110 41,569
Provision for loan losses . . . . . . 900 1,500 3,050 3,500
________ ________ _________ _________
Net interest income after provision
for loan losses . . . . . . . . . . . 14,768 12,007 43,060 38,069
________ ________ _________ _________
Other income:
Fees and service charges. . . . . . . 491 510 1,458 1,596
Gains (losses) on securities
transactions. . . . . . . . . . . . . 0 0 0 (10)
Gains(losses) on loans . . . . . . . . 5 12 15 13
Other income . . . . . . . . . . . . . 38 51 118 163
________ ________ _________ _________
Total other income. . . . . . . . . 534 573 1,591 1,762
________ ________ _________ _________
Other expense:
Salaries and employee benefits . . . . 2,104 2,183 6,619 6,605
Occupancy expense. . . . . . . . . . . 711 704 2,113 2,105
FDIC insurance premium . . . . . . . . 3,187 267 3,883 1,898
Amortization of intangibles. . . . . . 193 234 592 703
Net losses and expenses on OREO. . . . 192 (3) 579 484
Other operating expense. . . . . . . . 1,303 1,124 3,961 3,411
________ ________ _________ _________
Total other expenses. . . . . . . . 7,690 4,509 17,747 15,206
________ ________ _________ _________
Income before income tax expense. . . . 7,612 8,071 26,904 24,625
Income tax expense. . . . . . . . . . . 2,590 2,890 9,537 8,843
________ ________ _________ _________
Net income . . . . . . . . . . . . . . $ 5,022 $ 5,181 $ 17,367 $15,782
________ ________ _________ _________
________ ________ _________ _________
Primary earnings per share. . . . . . . $ 0.40 $ 0.39 $ 1.35 $ 1.19
Fully diluted earnings per share. . . . 0.40 0.39 1.35 1.19
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
BANKERS CORP AND SUBSIDIARY
Consolidated Statements of Changes in Stockholders' Equity
Nine Months Ended September 30, 1996
(Unaudited)
(In Thousands)
Net Unrealized
Unallocated Losses on Total
Additional Common Securities Stock-
Common Paid-In Retained Stock Held Treasury Available Holders'
Stock Capital Earnings by the ESOP Stock For Sale Equity
------ ---------- -------- ---------- -------- -------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at Dec. 31, 1995 $ 143 $101,138 $101,592 $ (621) $(15,314) $ 0 $186,938
Net Income --- --- 17,367 --- --- --- 17,367
Cash Dividends --- --- (5,762) --- --- --- (5,762)
Exercise of Stock Options --- --- (650) --- 912 --- 262
Treasury Stock acquired, net --- --- --- --- (10,658) --- (10,658)
Allocation of ESOP shares --- --- --- 200 --- --- 200
Increase in unrealized losses
on securities available for
sale, net of tax --- --- --- --- --- (818) (818)
______________________________________________________________________________________________________________________
Balance at Sept. 30, 1996 $ 143 $101,138 $112,547 $ (421) $(25,060) $(818) $187,529
______________________________________________________________________________________________________________________
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE> 6
<TABLE>
<CAPTION>
BANKERS CORP AND SUBSIDIARY
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1996 and 1995
(In Thousands)
1996 1995
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,367 $ 15,782
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . 765 891
Provision for loan losses. . . . . . . . . . . . . . . . . 3,050 3,500
Provision for uncollectible interest receivable. . . . . . 1,655 2,203
Net amortization of deferred fees, discounts
and premiums on loans . . . . . . . . . . . . . . . . . . 251 349
Origination of loans available for sale. . . . . . . . . . (1,226) (1,291)
Proceeds from sale of loans available for sale . . . . . . 831 9,456
Net gains on sale of loans available for sale. . . . . . . (15) (13)
Net accretion of premiums and discounts on securities. . . (183) (622)
Net losses on the sale of securities available for sale. . 0 10
Net decrease in OREO from sales and losses . . . . . . . . 5,878 5,105
Amortization of ESOP & MRPs. . . . . . . . . . . . . . . . 200 397
Amortization of intangibles. . . . . . . . . . . . . . . . 592 704
Increase in accrued interest receivable. . . . . . . . . . (3,647) (3,862)
(Increase) decrease in other assets. . . . . . . . . . . . (1,521) 1,591
Increase in mortgage escrow deposits . . . . . . . . . . . 2,200 246
Increase (decrease)in other liabilities &
income taxes payable . . . . . . . . . . . . . . . . . . 10,645 (472)
___________ __________
Net cash provided by operating activities . . . . . . . 36,842 33,974
___________ __________
Cash flows from investing activities:
Purchase of loans. . . . . . . . . . . . . . . . . . . . . (423,977) (146,773)
Net decrease in loans. . . . . . . . . . . . . . . . . . . 94,108 43,214
Purchase of mortgage & asset-backed securities
held to maturity . . . . . . . . . . . . . . . . . . . . (204,337) (96,796)
Principal payments of mortgage & asset-backed securities . 88,330 45,837
Purchase of investment securities held to maturity . . . . (1,991) (4,925)
Proceeds from maturities and calls of investment
securities held to maturity . . . . . . . . . . . . . . 40,850 20,167
Purchase of securities available for sale. . . . . . . . . (35,099) (1,929)
Proceeds from sale of securities available for sale. . . . 0 1,919
Banking premises, furniture & equipment expenditures . . . (510) (269)
__________ ___________
Net cash used in investing activities . . . . . . . . . (442,626) (139,555)
__________ ___________
Cash flows from financing activities:
Treasury stock purchases . . . . . . . . . . . . . . . . . (10,658) (925)
Net increase in demand and savings deposits. . . . . . . . 27,833 5,795
Net (decrease) increase in time deposits . . . . . . . . . (33,743) 126,922
Net increase (decrease) in short-term borrowings . . . . . 420,536 (25,520)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . (5,590) (4,900)
Exercise of stock options, net . . . . . . . . . . . . . . 262 164
__________ ___________
Net cash provided by financing activities. . . . . . . . . 398,640 101,536
__________ ___________
Decrease in cash and cash equivalents. . . . . . . . . . . (7,144) (4,045)
Cash and cash equivalents at beginning of year . . . . . . 23,337 18,460
__________ ___________
Cash and cash equivalents at end of period . . . . . . . . $ 16,193 $ 14,415
__________ ___________
__________ ___________
Cash paid during the year for:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . 61,047 53,829
Income taxes . . . . . . . . . . . . . . . . . . . . . . . 10,795 8,462
Supplemental schedule of noncash investing and financing
activities:
Real estate acquired in settlement of loans. . . . . . . . 5,781 6,898
Loans held to maturity reclassified as loans available
for sale . . . . . . . . . . . . . . . . . . . . . . . . 631 9,077
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE> 7
BANKERS CORP AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
----------------------------------------------------
Basis of Presentation
- ---------------------
The accompanying unaudited consolidated financial statements include the
accounts of Bankers Corp. (the Corporation) and its wholly-owned subsidiary
Bankers Savings (the Bank) and its inactive wholly-owned subsidiary, PASI
Development, Incorporated. All inter-company balances and transactions have
been eliminated in the consolidated financial statements. These financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. For further information refer
to the financial statements and notes for the year ended December 31, 1995
included in the Form 10-K, as filed with the SEC. In the opinion of
management, all adjustments (consisting of only normal recurring accruals)
necessary for a fair presentation have been included.
The results of operations for the nine months ended September 30, 1996 are not
necessarily indicative of results that may be expected for the entire fiscal
year ended December 31, 1996.
Primary and fully diluted earnings per share for the three and nine month
periods in 1996 and 1995 were calculated by dividing net earnings by weighted
average shares of common stock and common stock equivalents using the treasury
stock method. Stock options are regarded as common stock equivalents and are
therefore considered in both primary and fully diluted earnings per share
calculations.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
---------------------------------------------
Financial Condition
- -------------------
Beginning with the second quarter of 1996, the Bank was presented with the
opportunity to purchase packages of high quality adjustable rate mortgage
loans primarily with under one year to reset indexed to the one year constant
maturity treasury (CMT). Also, during the past two quarters, adjustable
mortgage loans came back in favor due to the increase in rates on long-term
fixed rate mortgage loans. With these opportunities, a decision was made to
leverage the Bank through short-term borrowings.
Total assets increased during the first nine months of 1996 by $428.2 million
or 22.5% to $2.330 billion.
Total loans during the first nine months of 1996 increased $320.2 million or
24.2% to $1.642 billion at September 30, 1996. The increase in loans came
from the purchase of adjustable rate mortgage loans totaling $424.0 million
for the first nine months of 1996.
During the first quarter of 1996, the Bank purchased, as available for sale,
U.S. Treasury Notes of $35.1 million. There were no securities available for
sale at December 31, 1995.
Total mortgage and asset-backed securities increased by $116.2 million or
25.2% to $576.8 million at September 30, 1996.
Total deposits excluding escrow deposits decreased by $5.9 million or .36% to
$1.625 billion at September 30, 1996.
<PAGE> 8
Management's Discussion and Analysis of
Financial Condition and Results of Operations (cont'd)
------------------------------------------------------
The short-term borrowings comprised of federal funds purchased and securities
sold under agreements to repurchase increased by $420.5 million or 625.4% to
$487.8 million at September 30, 1996.
Results of Operations
- ---------------------
Bankers Corp. net income for the three month period ended September 30, 1996
decreased $159,000, compared to the same period in 1995 and increased $1.6
million for the nine month period ended September 30, 1996, compared to the
same period in 1995. The decrease in earnings for the third quarter was
attributable to the one time FDIC assessment charge of $1.8 million, net of
tax, to recapitalize the Savings Association Insurance Fund ("SAIF"). This
charge reduced fully diluted earnings per share by $0.14. Earnings per share
(EPS) on a fully diluted basis increased 2.6% to $0.40 compared to $0.39 for
the same period last year. The result of treasury stock purchases of
approximately 621,000 shares during the past nine months under the
Corporation's last repurchase plan and increased earnings offset this onetime
charge. Excluding the effect of this onetime charge, EPS would have increased
38% compared to the third quarter of last year.
Total interest income increased by $6.7 million or 20.7% and $15.2 million or
16.0% for the three and nine month periods ended September 30, 1996,
respectively, compared to the same periods a year ago. This increase was
primarily due to the growth of earning assets.
Total interest expense increased $4.6 million or 24.0% and $10.7 million or
19.9% for the three and nine month periods ended September 30, 1996,
respectively, compared to the same periods a year ago. Interest expense on
deposits for the three month period ended September 30, 1996 decreased by
$76,000 or .41% and increased for the nine month period by $4.1 million or
8.1% compared to the same periods last year. The decrease for the three month
period is attributable to lower average rates paid in the third quarter of
1996 compared to 1995. The increase for the nine month period was
attributable to higher average balances and higher average rates paid in 1996
compared to 1995. Interest expense on borrowing for the three and nine month
periods ended September 30, 1996 increased $4.6 million and $6.6 million,
respectively, compared to the same periods last year, primarily due to
substantially increased borrowings.
Net interest income increased by $2.2 million or 16.0% and $4.5 million or
10.9% for the three and nine months ended September 30, 1996, respectively,
compared to the same periods last year. The increase in net interest income
for the three and nine month periods was primarily due to the growth in
earning assets partially offset by a decrease in the interest rate spread.
Fees, service charges and other income decreased $32,000 or 5.7% and $183,000
or 10.4% for the three and nine month periods ended September 30, 1996
compared to the same period last year. The decrease in fees, service charges
and other income is primarily due to the reduction of service charges on
demand deposit accounts and NOW accounts, along with the reduction of
commissions received on mortgage life and disability insurance. The reduction
of service charges is the result of waived fees for Relationship Banking
customers.
Total other expenses for the three and nine month periods ending September 30,
1996 increased $3.2 million or 70.5% and $2.5 million or 16.7%, respectively,
compared to the same period a year ago. The FDIC insurance premium for the
three and nine month periods ended September 30, 1996 increased $2.9 million
and $2.0 million, respectively, compared to the same periods in 1995. The
increase in the FDIC insurance premium was the result of a special assessment
levied by the FDIC to recapitalize the SAIF fund to a designated reserve ratio
of 1.25%. This special assessment totaled $2.8 million and was partially
offset by a reduced insurance premium on our deposits insured under the FDIC's
Bank Insurance Fund ("BIF") from 23 basis points during the first five months
<PAGE> 9
Management's Discussion and Analysis of
Financial Condition and Results of Operations (cont'd)
------------------------------------------------------
of 1995 to zero thereafter. Amortization of intangibles for the three and
nine month periods ended September 30, 1996, respectively, decreased $41,000
or 17.5% and $111,000 or 15.8% compared to the same periods last year. Net
losses and expenses on OREO increased $195,000 and $95,000, respectively, for
the three and nine month periods ended September 30, 1996 compared to the same
periods last year. Salaries and employee benefits for the three and nine month
periods ended September 30, 1996 decreased $79,000 or 3.6% and increased
$14,000 or .21%, respectively, compared to the same periods last year.
Non-Performing Assets
- ---------------------
Non-performing assets which include non-accrual loans, loans past due 90 days
or more and still accruing, and other real estate owned decreased to $27.9
million during the last twelve months reflecting a decrease of $5.9 million or
17.6% compared to $33.8 million at September 30, 1995.
The following table sets forth information with respect to certain
non-performing assets for the quarters ended September 30,1995 through
September 30, 1996:
<TABLE>
<CAPTION>
(In Thousands)
At
Sept. 30, June 30, Mar. 31, Dec. 31, Sept.30,
1996 1996 1996 1995 1995
________ ________ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Non-accrual loans . . . . . . . . . . $19,915 $20,774 $23,062 $24,947 $25,603
Loans 90 days or more past due and still
accruing . . . . . . . . . . . . . . . 1,997 2,411 2,050 1,446 1,708
_______ _______ _______ _______ _______
Total non-performing loans. . . . . . 21,912 23,185 25,112 26,393 27,311
_______ _______ _______ _______ _______
Other real estate owned . . . . . . . . 6,605 6,607 5,761 6,407 6,745
Less allowance for other real
estate owned . . . . . . . . . . . . 645 518 507 350 241
_______ _______ _______ _______ _______
Total other real estate owned . . . . 5,960 6,089 5,254 6,057 6,504
_______ _______ _______ _______ _______
Total non-performing assets . . . . . $27,872 $29,274 $30,366 $32,450 $33,815
_______ _______ _______ _______ _______
_______ _______ _______ _______ _______
Non-performing assets to total assets 1.20% 1.33% 1.59% 1.71% 1.80%
Non-performing loans to total loans 1.33% 1.42% 1.88% 2.00% 2.08%
</TABLE>
The following table provides a further breakdown of Bankers Savings
non-performing loans by type of property securing the loan for the quarters
ended September 30, 1995 through September 30, 1996.<PAGE>
<TABLE>
<CAPTION>
(In Thousands)
At
Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
1996 1996 1996 1995 1995
________ ________ ________ ________ _______
<S> <C> <C> <C> <C> <C>
Mortgage and Home Equity Loans:
1-4 Family residential. . . . . . . $ 21,130 $21,758 $22,819 $23,455 $24,453
Construction. . . . . . . . . . . . 0 596 822 578 563
Commercial and multi-family . . . . 770 810 1,439 2,326 2,278
Consumer and other loans. . . . . . . 12 21 32 34 17
_______ _______ _______ _______ _______
Total non-performing loans. . . . . $21,912 $23,185 $25,112 $26,393 $27,311
_______ _______ _______ _______ _______
_______ _______ _______ _______ _______
</TABLE>
Non-performing loans are primarily secured by 1-4 family residential
properties which represent $21.1 million or 96.4% of the total at September
30, 1996. The remainder of the non-performing loans include $560,000 and
$210,000 of loans secured by multi-family dwellings and non-residential
properties, respectively, and $12,000 in consumer loans. Non-performing
loans at September 30, 1996 secured by real estate totaled 208 loans for an
average balance of $105,000.
<PAGE> 10
Management's Discussion and Analysis of
Financial Condition and Results of Operations (cont'd)
------------------------------------------------------
Liquidity and Capital Resources
- -------------------------------
The Bank's liquidity is a measure of its ability to fund loans, withdrawals
of deposits, and other cash out flows in a cost-effective manner. The
Bank's principal sources of funds are deposits, scheduled amortization and
prepayments of loans and mortgage-backed securities, borrowings, maturities
of investment securities, and other funds provided by operations. While
scheduled loan payments and maturing investments are a relatively
predictable source of funds, deposit flows and loan prepayments are greatly
influenced by general interest rates, economic conditions and competition.
Significant sources of funds for the first nine months of 1996 and 1995 were
the return of principal on mortgage loans and mortgage-backed securities due
to loan prepayments. Other significant sources of funds during 1996 were the
net increase in short-term borrowings, the proceeds from maturities and
calls of investment securities held to maturity, and the net increase in
demand and savings deposits. Other significant sources of funds during 1995
were the net increase in time deposits.
The primary uses of funds during the first nine months of 1996 and 1995 were
the origination and purchase of mortgage loans and mortgage-backed
securities held to maturity. Other significant uses of funds during 1996
were the purchase of securities available for sale, a net decrease in time
deposits and the purchase of treasury stock. Other significant uses of funds
during 1995 were the net decrease in short-term borrowings.
The Bank anticipates that it will have sufficient funds to meet its unused
home equity lines and loan commitments totaling $108.3 million at September
30, 1996. Certificates of deposit maturing within one year or less totaled
$749.8 million. Management believes that a significant portion of such
deposits will remain with the Bank.
Early in 1996, Bankers Corp reactivated the repurchase program with the
repurchase of up to one million shares of common stock of the company. At
September 30, 1996, the remaining shares to be purchased were approximately
379,000.
Stockholders' equity during the first nine months of 1996 increased by
$591,000 to $187.5 million primarily due to the retention of earnings and
exercise of stock options totaling $912,000 offset by treasury stock
repurchases aggregating $10.7 million and the $818,000 increase in
unrealized losses on securities available for sale. The capital ratios of
Bankers Corp and Bankers Savings, its wholly owned subsidiary, are
comfortably in excess of those required by all regulatory authorities.
The following table sets forth the capital ratios of Bankers Corp. on a
consolidated basis, Bankers Savings and the current regulatory minimum
requirements at September 30, 1996.
<TABLE>
<CAPTION>
Bankers Bankers Minimum
Corp. Savings Requirement
------- ------- -----------
<S> <C> <C> <C>
Risk Based Capital Ratio:
Tier 1 (core) 17.14% 16.80% 4.00%
Total 17.44% 17.09% 8.00%
Leverage Ratio 8.48% 8.30% 3.00%
</TABLE>
<PAGE> 11
OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
The Corporation is not engaged in any legal proceedings of a material
nature at the present time. From time to time, the Bank is a party
to legal proceedings within the normal course of business wherein it
enforces its security interest in investment, and loans made by it.
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults Upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to Vote of Security Holders
-------------------------------------------------
None
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a) Exhibits
The following exhibits are filed as part of this report.
Exhibit Exhibit
Number Index
- ------ -------
3.1 Certificates of Incorporation of Bankers Corp.
as amended is incorporated herein and by reference to Annex A of the
Registrant's Proxy Statement for its 1995 Annual Meeting of Stockholders
held on April 28, 1995 and filed with the SEC on March 28, 1995.
3.2 By-Laws of Bankers Corp.
incorporated herein and by reference to this document from the previously
filed exhibits to the Form 10-Q for the period ending March 31, 1995,
filed on May 15, 1995.
4.0 Stock Certificate of Bankers Corp.
incorporated herein and by reference to this document from the previously
filed exhibits to the Annual Report on Form 10-K for the year ended
December 31, 1995.
11.0 Computation of earnings per share (filed herewith). Page 13
27.0 Financial Data Schedule (filed herewith). Page 14
b) There were no reports on Form 8-K filed during the nine months ended
September 30, 1996.
<PAGE> 12
SIGNATURE
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.
BANKERS CORP.
________________________________
Registrant
DATE: November 13, 1996 /s/Joseph P. Gemmell
_________________________________
Joseph P. Gemmell
Chairman of the Board, President
and Chief Executive Officer
DATE: November 13, 1996 /s/Howard S. Garfield, II
_________________________________
Howard S. Garfield, II
Senior Vice President
and Chief Financial Officer
<PAGE>
<TABLE>
<CAPTION>
Exhibit 11
Bankers Corp.
Computation of Earnings Per Share
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
(in thousands, except per share data) 1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary:
Average shares outstanding 12,384 12,898 12,615 12,898
Net effect of the assumed exercise of
stock options-based on the treasury
stock method using average market
price 244 325 252 324
------ ------ ------ ------
Total 12,628 13,223 12,867 13,222
====== ====== ====== ======
Net income $5,022 $5,181 $17,367 $15,782
Net income per share $0.40 $0.39 $1.35 $1.19
Fully Diluted:
Average shares outstanding 12,384 12,898 12,614 12,898
Net effect of the assumed exercise of
stock options-based on treasury
stock method using average market price
or period-end market price, whichever
is higher 245 328 258 337
------ ------ ------ ------
Total 12,629 13,226 12,872 13,235
====== ====== ====== ======
Net income $5,022 $5,181 $17,367 $15,782
Net income per share $0.40 $0.39 $1.35 $1.19
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This legend contains summary information extracted from the Form 10-Q and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000857450
<NAME> BANKERS CORP.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 15,093
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 1,100
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 33,790
<INVESTMENTS-CARRYING> 604,749
<INVESTMENTS-MARKET> 605,740
<LOANS> 1,641,576
<ALLOWANCE> 7,120
<TOTAL-ASSETS> 2,330,150
<DEPOSITS> 1,625,344
<SHORT-TERM> 487,781
<LIABILITIES-OTHER> 29,496
<LONG-TERM> 0
0
0
<COMMON> 143
<OTHER-SE> 187,386
<TOTAL-LIABILITIES-AND-EQUITY> 2,330,150
<INTEREST-LOAN> 83,682
<INTEREST-INVEST> 26,819
<INTEREST-OTHER> 58
<INTEREST-TOTAL> 110,559
<INTEREST-DEPOSIT> 55,070
<INTEREST-EXPENSE> 64,449
<INTEREST-INCOME-NET> 46,110
<LOAN-LOSSES> 3,050
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 17,747
<INCOME-PRETAX> 26,904
<INCOME-PRE-EXTRAORDINARY> 26,904
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,367
<EPS-PRIMARY> 1.35
<EPS-DILUTED> 1.35
<YIELD-ACTUAL> 0
<LOANS-NON> 19,915
<LOANS-PAST> 1,997
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 8,137
<CHARGE-OFFS> 4,244
<RECOVERIES> 177
<ALLOWANCE-CLOSE> 7,120
<ALLOWANCE-DOMESTIC> 7,120
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
