<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 June 30, 1997
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 August 8, 1997
COMMON STOCK, $.01 PAR VALUE - 12,395,688 SHARES
<PAGE> 2
BANKERS CORP.
INDEX TO FORM 10-Q
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Statements of Condition at June 30, 1997
and December 31, 1996 (Unaudited). . . . . . . . . . . . . 3
Consolidated Statements of Income for the Three and Six Months
Ended June 30, 1997 and 1996 (Unaudited) . . . . . . . . . 4
Consolidated Statements of Changes in Stockholders' Equity
for the Six Months Ended June 30, 1997 (Unaudited ). . . . 5
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1997 and 1996 (Unaudited) . . . . . 6
Notes to Unaudited Consolidated Financial Statements . . . 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . . 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk. 11
PART II. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . 12
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . 13
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
BANKERS CORP AND SUBSIDIARY
Consolidated Statements of Condition
(In Thousands)
At
June 30, December 31,
1997 1996
<S> <C> <C>
Assets: (unaudited)
Cash on hand and due from banks. . . . . . . . . . $ 15,126 $ 15,957
Federal funds sold . . . . . . . . . . . . . . . . 11,800 0
_________ __________
Cash and cash equivalents. . . . . . . . . . . 26,926 15,957
Securities available for sale. . . . . . . . . . . 34,100 34,181
Investment securities, held to maturity, estimated
market value of $40,245 and $26,036 at June 30,
1997 and December 31, 1996, respectively . . . 40,249 25,961
Mortgage and asset-backed securities, held to
maturity, estimated market value of $901,282
and $685,780 at June 30, 1997 and Dec. 31,
1996, respectively . . . . . . . . . . . . . . 896,662 681,518
Loans net of unearned income and premiums. . . . . 1,540,362 1,672,234
Less: Allowance for loan losses. . . . . . . . 7,689 6,596
__________ __________
Net loans. . . . . . . . . . . . . . . . 1,532,673 1,665,638
Banking premises, furniture and equipment, net . . 10,449 10,846
Accrued interest receivable. . . . . . . . . . . . 16,885 15,181
Intangible assets, net of accumulated amortization
of $9,032 and $8,712 at June 30, 1997 and
December 31,1996, respectively . . . . . . . . 3,009 3,329
Other Real Estate Owned, net (OREO). . . . . . . . 3,191 4,662
Other assets . . . . . . . . . . . . . . . . . . . 2,691 2,511
__________ __________
Total assets. . . . . . . . . . . . . . . 2,566,835 2,459,784
__________ __________
__________ __________
Liabilities and Stockholders' Equity:
Due to depositors:
Interest bearing . . . . . . . . . . . . . . . 1,602,723 1,578,452
Non-interest bearing . . . . . . . . . . . . . 54,204 50,610
__________ __________
Total deposits. . . . . . . . . . . . . . 1,656,927 1,629,062
Borrowings . . . . . . . . . . . . . . . . . . . . 678,806 614,090
Mortgage escrow deposits . . . . . . . . . . . . . 13,262 12,203
Income taxes payable . . . . . . . . . . . . . . . 435 1,348
Other liabilities. . . . . . . . . . . . . . . . . 13,869 10,204
__________ __________
Total liabilities . . . . . . . . . . . .$ 2,363,299 $ 2,266,907
__________ __________
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 . . . . . . . . . . . . . . . . . 127,747 117,525
Less:
Unallocated Common stock held by the ESOP . . . 0 301
Common stock in treasury, at cost: 1,877,352
shares and 1,891,016 shares, respectively. . . 24,879 25,060
Net unrealized losses on securities available
for sale, net of tax . . . . . . . . . . . 613 568
_________ _________
Total stockholders' equity. . . . . 203,536 192,877
_________ _________
Total liabilities and stockholders'
equity . . . . . . . . . . . . . . . . . $2,566,835 $2,459,784
_________ _________
_________ _________
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 Six Months Ended
June 30, June 30,
1997 1996 1997 1996
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Interest income:
Real estate loans . . . . . . . . . . $27,680 $26,908 $56,370 $51,122
Other loans . . . . . . . . . . . . . 1,273 1,129 2,485 2,290
Mortgage and asset-backed securities. 15,489 7,340 27,630 14,825
Investment securities-taxable . . . . 1,227 1,402 2,352 2,916
Municipals-nontaxable . . . . . . . . 15 15 30 30
Short-term investments. . . . . . . . 0 73 350 73
Federal funds sold. . . . . . . . . . 119 28 181 49
_______ _______ _______ _______
Total interest income. . . . . . . 45,803 36,895 89,398 71,305
_______ _______ _______ _______
Interest expense:
Interest on deposits. . . . . . . . . 18,672 18,168 36,770 36,769
Interest on borrowings. . . . . . . . 10,124 3,296 18,778 4,094
______ _______ _______ _______
Total interest expense . . . . . . 28,796 21,464 55,548 40,863
Net interest income . . . . . . . . . . . 17,007 15,431 33,850 30,442
Provision for loan losses . . . . . . . . 1,150 1,250 2,300 2,150
_______ _______ _______ ______
Net interest income after provision
for loan losses . . . . . . . . . . . 15,857 14,181 31,550 28,292
_______ _______ _______ _______
Other income:
Fees and service charges. . . . . . . 466 483 916 966
Gains(losses) on loans. . . . . . . . 0 5 136 10
Other income. . . . . . . . . . . . . 72 41 170 80
_______ _______ _______ _______
Total other income . . . . . . . . 538 529 1,222 1,056
_______ _______ _______ _______
Other expense:
Salaries and employee benefits. . . . 2,432 2,254 4,999 4,516
Occupancy expense . . . . . . . . . . 668 674 1,290 1,401
FDIC insurance premium. . . . . . . . 115 348 230 696
Amortization of intangibles . . . . . 160 199 320 399
Net losses and expenses on OREO . . . 186 157 437 387
Other operating expense . . . . . . . 1,510 1,486 3,002 2,657
_______ _______ ________ _______
Total other expenses . . . . . . . 5,071 5,118 10,278 10,056
_______ _______ ________ _______
Income before income tax expense. . . . . 11,324 9,592 22,494 19,292
Income tax expense. . . . . . . . . . . . 4,115 3,453 8,172 6,947
_______ _______ ________ _______
Net income. . . . . . . . . . . . . . . . $ 7,209 $ 6,139 $ 14,322 $12,345
_______ _______ ________ _______
_______ _______ ________ _______
Primary earnings per share. . . . . . . . $ 0.57 $ 0.48 $ 1.13 $ 0.95
Fully diluted earnings per share. . . . . 0.57 0.48 1.13 0.95
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
BANKERS CORP AND SUBSIDIARY
Consolidated Statements of Changes in Stockholders' Equity
Six Months Ended June 30, 1997
(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, 1996 $143 $101,138 $117,525 $ (301) $(25,060) $ (568) $192,877
Net Income --- --- 14,322 --- --- --- 14,322
Cash Dividends --- --- (3,966) --- --- --- (3,966)
Exercise of Stock Options --- --- (134) --- 181 --- 47
Treasury Stock acquired, net --- --- --- --- --- --- ---
Allocation of ESOP shares --- --- --- 301 --- --- 301
Increase in unrealized losses
on securities available for
sale, net of tax --- --- --- --- --- (45) (45)
______________________________________________________________________________________________________________________
Balance at June 30, 1997 $143 $101,138 $127,747 $ 0 $(24,879) $ (613) $203,536
______________________________________________________________________________________________________________________
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE> 6
<TABLE>
BANKERS CORP AND SUBSIDIARY
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1997 and 1996
(In Thousands)
1997 1996
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . . $ 14,322 $ 12,345
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . 457 501
Provision for loan losses. . . . . . . . . . . . . 2,300 2,150
Provision for uncollectible interest receivable. . 1,119 1,134
Net amortization of deferred fees, discounts
and premiums on loans . . . . . . . . . . . . . . 1,004 135
Origination of loans available for sale. . . . . . 0 (1,226)
Proceeds from sale of loans available for sale . . 7,465 588
Net gains on sale of loans available for sale. . . (136) (10)
Net accretion of premiums and discounts
on securities. . . . . . . . . . . . . . . . . . (5) (84)
Net decrease in OREO from sales and losses . . . . 4,157 4,081
Amortization of ESOP & MRPs. . . . . . . . . . . . 301 200
Amortization of intangibles. . . . . . . . . . . . 320 399
Increase in accrued interest receivable. . . . . . (2,823) (3,213)
Increase in other assets . . . . . . . . . . . . . (154) (3)
Increase in mortgage escrow deposits . . . . . . . 1,059 2,276
Increase in other liabilities &
income taxes payable . . . . . . . . . . . . . . 2,751 4,319
________ ________
Net cash provided by operating activities. . . 32,137 23,592
________ ________
Cash flows from investing activities:
Purchase of loans. . . . . . . . . . . . . . . . . (49,654) (381,408)
Net decrease in loans. . . . . . . . . . . . . . . 169,299 60,312
Purchase of mortgage & asset-backed securities
held to maturity . . . . . . . . . . . . . . . . (285,673) (51,215)
Principal payments of mortgage & asset-backed
securities . . . . . . . . . . . . . . . . . . . 70,547 63,093
Purchase of investment securities held to maturity (25,000) (1,991)
Proceeds from maturities and calls of investment
securities held to maturity . . . . . . . . . . 10,708 27,100
Purchase of securities available for sale. . . . . 0 (35,099)
Banking premises, furniture & equipment expenditures (60) (282)
________ ________
Net cash used in investing activities . . . . . (109,833) (319,490)
________ ________
Cash flows from financing activities:
Treasury stock purchases . . . . . . . . . . . . . 0 (10,302)
Net increase in demand and savings deposits. . . . 10,088 29,043
Net increase(decrease) in time deposits. . . . . . 17,777 (20,547)
Net increase in borrowings . . . . . . . . . . . . 64,716 293,505
Dividends paid . . . . . . . . . . . . . . . . . . (3,963) (3,606)
Exercise of stock options, net . . . . . . . . . . 47 262
________ _________
Net cash provided by financing activities. . . . . 88,665 288,355
________ _________
Increase (decrease) in cash and cash equivalents . 10,969 (7,543)
Cash and cash equivalents at beginning of year . . 15,957 23,337
________ _________
Cash and cash equivalents at end of period . . . . $ 26,926 $ 15,794
________ _________
________ _________
Cash paid during the year for:
Interest . . . . . . . . . . . . . . . . . . . . . 51,872 39,291
Income taxes . . . . . . . . . . . . . . . . . . . 9,085 7,595
Supplemental schedule of noncash investing and financing
activities:
Real estate acquired in settlement of loans. . . . 2,687 4,112
Loans held to maturity reclassified as loans available
for sale . . . . . . . . . . . . . . . . . . . . 713 607
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, 1996 included in the Form 10-K, as filed with the SEC on
March 28, 1997. 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 six months ended June 30, 1997 are not
necessarily indicative of results that may be expected for the entire fiscal
year ended December 31, 1997.
Primary and fully diluted earnings per share for the six month periods ending
June 30, 1997 and 1996 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.
<PAGE> 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
---------------------------------------------
On February 5, 1997 the Corporation entered into an Agreement and Plan of Merger
(the "Merger Agreement") with Sovereign Bancorp, Inc., a Pennsylvania corpor-
ation ("Sovereign"). The Merger Agreement provides, among other things, that
the Corporation will be merged with and into Sovereign, with Sovereign being the
surviving corporation. Consummation of the Merger is subject to, among other
things, approval of the Merger Agreement by the Corporation's shareholders at
the Annual Meeting of Shareholders to be held on August 28, 1997 (the "Annual
Meeting"). On or about July 22, 1997, a Joint Proxy Statement/Prospectus was
mailed to the Corporation's shareholders in connection with the solicitation
of Proxies by the Corporation for use at the Annual Meeting. The Merger is
expected to be consummated shortly after the Bankers Annual Meeting. For a
more detailed discussion of the Merger agreement, refer to the Corporation's
Annual Report on Form 10-K, as filed with the SEC on March 28, 1997.
Financial Condition
- -------------------
Total assets increased during the first six months of 1997 by $107.1 million or
4.4% to $2.567 billion.
Total loans during the first six months of 1997 decreased $131.9 million or 7.9%
to $1.540 billion at June 30, 1997.
Total mortgage and asset-backed securities increased by $215.1 million or 31.6%
during the first six months of 1997 to $896.7 million at June 30, 1997. The
increased investment in mortgage-backed securities and decrease in the amount of
total loans was due primarily to the reinvestment of cash-flow from prepayments
on one year adjustable rate mortgage loans as they reached their first reset
date.
Total deposits excluding escrow deposits increased during the first six months
of 1997 by $27.9 million or 1.7% to $1.657 billion at June 30, 1997.
The borrowings comprised of federal funds purchased and securities sold under
agreements to repurchase increased during the first six months of 1997 by $64.7
million or 10.5% to $678.8 million at June 30, 1997.
<PAGE> 9
Management's Discussion and Analysis of
Financial Condition and Results of Operations (cont'd)
------------------------------------------------------
Results of Operations
- ---------------------
Bankers Corp.'s net income for the three and six month periods ended
June 30, 1997, compared to the same period a year ago, increased $1,070,000 or
17.4% and $1,977,000 or 16.0%, respectively. Earnings per share (EPS)on a fully
diluted basis increased 18.8% to $0.57 for the second quarter of 1997
compared with $0.48 for the second quarter of 1996. The increase in EPS was
due to an increase in earnings and partially the result of stock re-purchases
under the Corporation's last repurchase plan.
Total interest income increased by $8.9 million or 24.1% and $18.1 million or
25.4%, respectively, for the three and six month periods ended June 30, 1997
compared to the same period a year ago. This increase was primarily due to the
growth of earning assets partially offset by decreased yields.
Total interest expense increased $7.3 million or 34.2% and $14.7 million or
35.9%, respectively, for the three and six month periods ended June 30, 1997,
compared to the same periods a year ago. Interest expense on deposits for the
three month period ended June 30, 1997 increased by $504,000 or 2.8% compared to
the same period last year. This increase was primarily due to an increase in
rates. Interest expense on borrowings for the three and six month periods
ended June 30, 1997 increased $6.8 million or 207.2% and $14.7 million or
358.7%, respectively, compared to the same periods last year due to higher
average balances.
Net interest income increased by $1.6 million or 10.2% and $3.4 million or
11.2%, respectively, for the three and six month periods ended June 30, 1997
compared to the same periods last year. The increase in net interest income for
the six month period was primarily due to the growth in interest earning assets
partially offset by a decrease in the interest rate spread. The interest
rate spread for the six month periods ended June 30, 1997 and 1996 were 2.24%
and 2.61 %, respectively. The net yield on average interest earning assets
for the six month periods ended June 30, 1997 and 1996 were 2.72% and 3.12%,
respectively.
The provision for loan losses increased by $150,000 to $2.3 million for the
first six months of 1997, compared to $2.2 million for the first six months of
1996. The increase in the provision resulted from an increase in the general
valuation allowance for performing loans based upon a review by management of
the loan portfolio and other economic factors.
Gains on the sale of loans decreased $5,000 and increased $126,000,
respectively, for the three and six month periods ended June 30, 1997, compared
to the three and six month periods ended June 30, 1996. Fees, service charges
and other income increased $14,000 or 2.7% and $40,000 or 3.8%, respectively,
for the three and six month periods ended June 30, 1997, compared to the same
periods last year.
Total other expenses for the three and six month periods ending June 30, 1997
decreased $47,000 or 0.9% and increased $222,000 or 2.2%, respectively, compared
to the same periods a year ago. Salaries and employee benefits for the three
and six month periods ended June 30, 1997 increased $178,000 or 7.9% and
$483,000 or 10.7%, respectively, compared to the same periods last year.
These increases are primarily due to cost of living and merit increases.
Also the contributions made to the ESOP during the first six months of 1997
were larger than the contributions made in the first six months of 1996.
The FDIC insurance premium for the three and six month periods ended
June 30, 1997 decreased $233,000 or 67.0% and $466,000 or 67.0%, respectively,
compared to the same periods in 1996. The decrease in the FDIC insurance
premium resulted primarily from the decrease in the assessment rates
following the recapitalization of the Savings Association Insurance Fund,
("SAIF"). Amortization of intangibles for the three and six month periods
ended June 30, 1997 decreased $39,000 or 19.6% and $79,000 or 19.8%,
<PAGE> 10
respectively, compared to the same periods last year. Net losses and expenses
on OREO increased $29,000 or 18.5% and $50,000 or 12.9%, respectively,
compared to the same periods last year. Other operating expenses increased
$24,000 or 1.6% and $345,000 or 13.0%, respectively, during the three and six
month periods ended June 30, 1997, compared to the same periods in 1996. These
increases are primarily due to mortgage servicing fees paid on the Company's
portfolio of mortgage loans serviced by others and costs relating to the
Merger Agreement.
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 totaled $29.2 million at
June 30, 1997 compared to $29.3 million at June 30, 1996.
The following table sets forth information with respect to non-performing assets
for the quarters ended June 30, 1996 through June 30, 1997:
<TABLE>
(In Thousands)
At
June 30, March 31, Dec.31, Sept.30, June 30,
1997 1997 1996 1996 1996
________ ________ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Non-accrual loans . . . . . . . . . . $23,378 $22,866 $21,345 $19,915 $20,774
Loans 90 days or more past due and
still accruing . . . . . . . . . . . 2,598 3,371 3,014 1,997 2,411
_______ _______ _______ _______ _______
Total non-performing loans. . . . . 25,976 26,237 24,359 21,912 23,185
_______ _______ _______ _______ _______
Other real estate owned . . . . . . . 3,686 4,765 5,267 6,605 6,607
Less allowance for other real
estate owned . . . . . . . . . . . 495 628 605 645 518
_______ _______ _______ _______ _______
Total other real estate owned . . . 3,191 4,137 4,662 5,960 6,089
_______ _______ _______ _______ _______
Total non-performing assets . . . . $29,167 $30,374 $29,021 $27,872 $29,274
_______ _______ _______ _______ _______
_______ _______ _______ _______ _______
Non-performing assets to total assets 1.14% 1.20% 1.18% 1.20% 1.33%
Non-performing loans to total loans 1.69% 1.66% 1.46% 1.33% 1.42%
</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
June 30, 1996 through June 30, 1997.
<TABLE>
(In Thousands)
At
June 30, March 31, Dec. 31, Sept.30, June 30,
1997 1997 1996 1996 1996
________ _________ _______ ________ _______
<S> <C> <C> <C> <C> <C>
Mortgage and Home Equity Loans:
1-4 Family residential. . . . . . . $22,000 $22,262 $22,880 $21,130 $21,758
Construction. . . . . . . . . . . . 0 0 0 0 596
Commercial and multi-family . . . . 3,967 3,971 1,470 770 810
Consumer and other loans. . . . . . . 9 4 9 12 21
_______ _______ _______ _______ _______
Total non-performing loans $25,976 $26,237 $24,359 $21,912 $23,185
_______ _______ _______ _______ _______
_______ _______ _______ _______ _______
</TABLE>
Non-performing loans are primarily secured by 1-4 family residential properties
which represent $22 million or 84.7% of the total amount of non-performing loans
at June 30, 1997. The remainder of the non-performing loans include $252,000
and $3.7 million of loans secured by multi-family dwellings and
non-residential properties, respectively, and $9,000 in consumer loans.
Non-performing loans at June 30, 1997 secured by real estate totaled 220
loans for an average balance of $118,000.
<PAGE> 11
<PAGE>
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 prepay-
ments of loans and mortgage backed securities, sales of loans available for
sale, borrowings, maturities of investment securities and short-term invest-
ments 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.
The most significant sources of funds for the first six months of 1997 and 1996
were the return of principal on mortgage loans and mortgage backed securities
due to loan prepayments and a net increase in borrowings.
The primary uses of funds during the first six months of 1997 and 1996 were the
origination and purchase of mortgage loans and the purchase of mortgage backed
securities held to maturity. Another significant use of funds during the first
six months of 1997 was the purchase of investment securities held to maturity.
Another significant use during 1996 was the purchase of investment securities
available for sale.
The Bank anticipates that it will have sufficient funds to meet its unused home
equity lines and loan commitments totaling $75.8 million at June 30, 1997.
Certificates of deposit maturing within one year or less totaled $774.0 million.
Management believes that a significant portion of such deposits will remain with
the Bank.
Stockholders' equity during the first six months of 1997 increased by $10.7
million to $203.5 million primarily due to the retention of earnings offset by
cash dividends totaling $4.0 million. The regulatory 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 June 30, 1997.
<TABLE>
Bankers Bankers Minimum
Corp. Savings Requirement
<S> <C> <C> <C>
Risk Based Capital Ratio:
Tier 1 (core) 18.38% 18.15% 4.0%
Total 18.84% 18.61% 8.0%
Leverage Ratio 7.93% 7.82% 3.0%
</TABLE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
Not Applicable
<PAGE> 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
None
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
Number
-------
11.0 Computation of earnings per share (filed herewith).
27.0 Financial Data Schedule (filed herewith).
b) Reports on Form 8-K.
There were no reports on Form 8-K filed during the three
months ended June 30, 1997.
<PAGE> 13
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.
BANKERS CORP.
________________________________
Registrant
DATE: August 11, 1997 /s/Joseph P. Gemmell
_______________ ____________________
Joseph P. Gemmell
Chairman of the Board, President
and Chief Executive Officer
DATE: August 11, 1997 /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 Six Months Ended
June 30, June 30,
----------------- -----------------
(in thousands, except per share data) 1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary:
Average shares outstanding 12,390 12,560 12,384 12,731
Net effect of the assumed exercise of
stock options-based on the treasury
stock method using average market
price 266 252 268 256
------ ------ ------ ------
Total 12,656 12,812 12,652 12,987
====== ====== ====== ======
Net income $7,209 $6,139 $14,322 $12,345
Net income per share $0.57 $0.48 $1.13 $0.95
Fully Diluted:
Average shares outstanding 12,390 12,560 12,384 12,731
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 274 254 279 259
------ ------ ------ ------
Total 12,664 12,814 12,663 12,990
====== ====== ====== ======
Net income $7,209 $6,139 $14,322 $12,345
Net income per share $0.57 $0.48 $1.13 $0.95
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000857450
<NAME> BANKERS CORP.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 15,126
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 11,800
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 34,100
<INVESTMENTS-CARRYING> 936,911
<INVESTMENTS-MARKET> 941,527
<LOANS> 1,540,362
<ALLOWANCE> 7,689
<TOTAL-ASSETS> 2,566,835
<DEPOSITS> 1,656,927
<SHORT-TERM> 678,806
<LIABILITIES-OTHER> 27,566
<LONG-TERM> 0
0
0
<COMMON> 143
<OTHER-SE> 203,393
<TOTAL-LIABILITIES-AND-EQUITY> 2,566,835
<INTEREST-LOAN> 58,855
<INTEREST-INVEST> 30,362
<INTEREST-OTHER> 181
<INTEREST-TOTAL> 89,398
<INTEREST-DEPOSIT> 36,770
<INTEREST-EXPENSE> 55,548
<INTEREST-INCOME-NET> 33,850
<LOAN-LOSSES> 2,300
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 10,278
<INCOME-PRETAX> 22,494
<INCOME-PRE-EXTRAORDINARY> 22,494
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,322
<EPS-PRIMARY> 1.13
<EPS-DILUTED> 1.13
<YIELD-ACTUAL> 0
<LOANS-NON> 23,378
<LOANS-PAST> 2,598
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 6,596
<CHARGE-OFFS> 1,258
<RECOVERIES> 51
<ALLOWANCE-CLOSE> 7,689
<ALLOWANCE-DOMESTIC> 7,689
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
