<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 March 31, 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 MAY 12, 1997
COMMON STOCK, $.01 PAR VALUE - 12,391,848 SHARES
Page 1 of 15
Exhibit Index appears on page 12
<PAGE> 2
BANKERS CORP.
INDEX TO FORM 10-Q
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Statements of Condition at March 31, 1997
and December 31, 1996 (Unaudited). . . . . . . . . . . . 3
Consolidated Statements of Income for the Three Months
Ended March 31, 1997 and 1996 (Unaudited) . . . . . . . . . 4
Consolidated Statements of Changes in Stockholders' Equity
for the Three Months Ended March 31, 1997 (Unaudited) . . . 5
Consolidated Statements of Cash Flows for the Three
Months Ended March 31, 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
March 31, December 31,
1997 1996
<S> <C> <C>
Assets: (unaudited)
Cash on hand and due from banks. . . . . . . . . . . $ 12,964 $ 15,957
Securities available for sale. . . . . . . . . . . . 33,600 34,181
Investment securities, held to maturity, estimated
market value of $44,214 and $26,036 at March 31,
1997 and December 31, 1996, respectively . . . . 44,411 25,961
Mortgage and asset-backed securities, held to maturity,
estimated market value of $840,539 and $685,780 at
March 31, 1997 and Dec. 31, 1996, respectively. . 842,309 681,518
Loans net of unearned income and premiums . . . . . . 1,577,988 1,672,234
Less: Allowance for loan losses . . . . . . . . . 7,237 6,596
___________ ___________
Net loans. . . . . . . . . . . . . . . . . . 1,570,751 1,665,638
Banking premises, furniture and equipment, net. . . . 10,665 10,846
Accrued interest receivable . . . . . . . . . . . . . 16,482 15,181
Intangible assets, net of accumulated amortization of
$8,872 and $8,712 at March 31, 1997 and
December 31,1996, respectively. . . . . . . . . . 3,169 3,329
Other Real Estate Owned, net (OREO) . . . . . . . . . 4,137 4,662
Other assets. . . . . . . . . . . . . . . . . . . . . 3,184 2,511
___________ ___________
Total assets . . . . . . . . . . . . . . . . 2,541,672 2,459,784
___________ ___________
___________ ___________
Liabilities and Stockholders' Equity:
Due to depositors:
Interest bearing . . . . . . . . . . . . . . . . 1,592,954 1,578,452
Non-interest bearing. . . . . . . . . . . . . . . 49,277 50,610
___________ ____________
Total deposits . . . . . . . . . . . . . . . . 1,642,231 1,629,062
Borrowings . . . . . . . . . . . . . . . . . . . . . 668,805 614,090
Mortgage escrow deposits. . . . . . . . . . . . . . . 12,807 12,203
Income taxes payable. . . . . . . . . . . . . . . . . 4,805 1,348
Other liabilities . . . . . . . . . . . . . . . . . . 15,228 10,204
___________ ___________
Total liabilities. . . . . . . . . . . . . . $ 2,343,876 $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 . . . . . . . . . . . . . . . . . . 122,657 117,525
Less:
Unallocated Common stock held by the ESOP. . . . . 150 301
Common stock in treasury, at cost: 1,891,016
shares. . . . . . . . . . . . . . . . . . . . . . 25,060 25,060
Net unrealized losses on securities available
for sale, net of tax. . . . . . . . . . . . . 932 568
___________ ___________
Total stockholders' equity . . . . . . 197,796 192,877
___________ ___________
Total liabilities and stockholders' equity. .$2,541,672 $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
March 31,
1997 1996
(Unaudited)
<S> <C> <C>
Interest income:
Real estate loans . . . . . . . . . . . . . . . . . $28,690 $ 24,214
Other loans . . . . . . . . . . . . . . . . . . 1,212 1,161
Mortgage and asset-backed securities. . . . . . 12,141 7,485
Investment securities-taxable . . . . . . . . . 1,125 1,514
Municipals-nontaxable . . . . . . . . . . . . . 15 15
Short-term investments. . . . . . . . . . . . . 350 0
Federal funds sold. . . . . . . . . . . . . . . 62 21
________ ________
Total interest income . . . . . . . . . . . . . 43,595 34,410
________ ________
Interest expense:
Interest on deposits. . . . . . . . . . . . . . 18,098 18,602
Borrowings. . . . . . . . . . . . . . . . . . . 8,654 798
________ ________
Total interest expense. . . . . . . . . . . . . 26,752 19,400
________ ________
Net interest income . . . . . . . . . . . . . . . . 16,843 15,010
Provision for loan losses . . . . . . . . . . . . . 1,150 900
________ ________
Net interest income after provision
for loan losses . . . . . . . . . . . . . . . 15,693 14,110
________ ________
Other income:
Fees and service charges. . . . . . . . . . . . 450 483
Gains(losses) on loans. . . . . . . . . . . . . 136 5
Other income. . . . . . . . . . . . . . . . . . 98 39
_______ ________
Total other income. . . . . . . . . . . . . . . 684 527
_______ ________
Other expense:
Salaries and employee benefits. . . . . . . . . 2,567 2,262
Occupancy expense . . . . . . . . . . . . . . . 622 727
FDIC insurance premium. . . . . . . . . . . . . 115 348
Amortization of intangibles . . . . . . . . . . 160 199
Net losses and expenses on OREO . . . . . . . . 251 230
Other operating expense . . . . . . . . . . . . 1,492 1,170
_______ ________
Total other expenses. . . . . . . . . . . . . . 5,207 4,936
_______ ________
Income before income tax expense. . . . . . . . . . 11,170 9,701
Income tax expense. . . . . . . . . . . . . . . . . 4,057 3,494
_______ ________
Net income. . . . . . . . . . . . . . . . . . . . . $ 7,113 $ 6,207
_______ ________
_______ ________
Primary earnings per share. . . . . . . . . . . . . $ 0.56 $ 0.47
Fully diluted earnings per share. . . . . . . . . . 0.56 0.47
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
BANKERS CORP AND SUBSIDIARY
Consolidated Statements of Changes in Stockholders' Equity
Three Months Ended March 31, 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 --- --- 7,113 --- --- --- 7,113
Cash Dividends --- --- (1,981) --- --- --- (1,981)
Exercise of Stock Options --- --- --- --- --- --- ---
Treasury Stock acquired, net --- --- --- --- --- --- ---
Allocation of ESOP shares --- --- --- 151 --- --- 151
Increase in unrealized losses
on securities available for
sale, net of tax --- --- --- --- --- (364) (364)
______________________________________________________________________________________________
Balance at March 31, 1997 $143 $101,138 $122,657 $(150) $(25,060) $(932) $197,796
______________________________________________________________________________________________
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE> 6
<TABLE>
<CAPTION>
BANKERS CORP AND SUBSIDIARY
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996
(In Thousands)
1997 1996
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . $ 7,113 $ 6,207
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation . . . . . . . . . . . . . . . . . . 228 244
Provision for loan losses. . . . . . . . . . . . 1,150 900
Provision for uncollectible interest receivable. 607 617
Net amortization of deferred fees, discounts
and premiums on loans . . . . . . . . . . . . . 504 3
Origination of loans available for sale. . . . . 0 (495)
Proceeds from sale of loans available for sale . 7,465 360
Net gains on sale of loans available for sale. . (136) (5)
Net accretion of premiums and discounts on
securities. . . . . . . . . . . . . . . . . . . (71) (31)
Net decrease in OREO from sales and losses . . . 1,733 2,508
Amortization of ESOP & MRPs. . . . . . . . . . . 151 119
Amortization of intangibles. . . . . . . . . . . 160 199
Increase in accrued interest receivable. . . . . (1,908) (1,373)
Increase in other assets . . . . . . . . . . . . (460) (122)
Increase in mortgage escrow deposits . . . . . . 604 1,149
Increase in other liabilities &
income taxes payable . . . . . . . . . . . . . 8,481 3,893
_________ _________
Net cash provided by operating activities . . 25,621 14,173
_________ _________
Cash flows from investing activities:
Purchase of loans. . . . . . . . . . . . . . . . (13,962) (45,636)
Net decrease in loans. . . . . . . . . . . . . . 98,657 29,722
Purchase of mortgage & asset-backed securities
held to maturity . . . . . . . . . . . . . . . . (196,053) (6,153)
Principal payments of mortgage & asset-backed
securities . . . . . . . . . . . . . . . . . . . 35,340 28,968
Purchase of investment securities held to
maturity . . . . . . . . . . . . . . . . . . . . (25,000) (1,991)
Proceeds from maturities and calls of investment
securities held to maturity . . . . . . . . . . 6,548 3,050
Purchase of securities available for sale . . . . 0 (35,099)
Banking premises, furniture & equipment
expenditures . . . . . . . . . . . . . . . . . . (47) (125)
_________ _________
Net cash used in investing activities. . . . . (94,517) (27,264)
_________ _________
Cash flows from financing activities:
Treasury stock purchases . . . . . . . . . . . . 0 (3,147)
Net increase in demand and savings deposits. . . 10,344 22,362
Net increase(decrease) in time deposits. . . . . 2,825 (19,951)
Net increase in borrowings . . . . . . . . . . . 54,715 5,212
Dividends paid . . . . . . . . . . . . . . . . . (1,981) (1,816)
Exercise of stock options, net . . . . . . . . . 0 194
_________ _________
Net cash provided by financing activities. . . . 65,903 2,854
_________ _________
Decrease in cash and cash equivalents. . . . . . (2,993) (10,237)
Cash and cash equivalents at beginning of year . 15,957 23,337
_________ _________
Cash and cash equivalents at end of period . . . $12,964 $13,100
_________ _________
_________ _________
Cash paid during the year for:
Interest . . . . . . . . . . . . . . . . . . . . 24,488 19,359
Income taxes . . . . . . . . . . . . . . . . . . 600 0
Supplemental schedule of noncash investing and
financing activities:
Real estate acquired in settlement of loans. . . 1,209 1,705
Loans held to maturity reclassified as loans
available for sale . . . . . . . . . . . . . . 484 501
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 three months ended March 31, 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 three month periods
ending March 31, 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 corporation ("Sovereign"). The Merger Agreement provides,
among other things, that the Corporation will be merged with and into
Sovereign, with Sovereign being the surviving corporation. 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. The
merger is expected to be consummated during the fourth quarter of 1997.
Copies of the Merger Agreement and the Stock Option Agreement between
Sovereign and Bankers Corp. entered into in connection with the Merger
Agreement are filed as Exhibits to this Report.
Financial Condition
- -------------------
Total assets increased during the first three months of 1997 by $81.9
million or 3.3% to $2.5 billion.
Total loans during the first three months of 1997 decreased $94.2 million
or 5.6% to $1.6 billion at March 31, 1997 compared to $1.7 billion at
December 31, 1996.
Total mortgage and asset-backed securities increased by $160.8 million or
23.6% to $842.3 million at March 31, 1997 compared to $681.5 million at
December 31, 1996. The increased investment in mortgage-backed securities
was due primarily to the reinvestment of heavy 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 three
months of 1997 by $13.2 million or 0.8% to $1.6 billion at March 31, 1997.
The borrowings comprised of federal funds purchased and securities sold
under agreements to repurchase increased by $54.7 million or 8.9% to
$668.8 million at March 31, 1997 compared to $614.1 at December 31, 1996.
<PAGE> 9
Management's Discussion and Analysis of
Financial Condition and Results of Operations (cont'd)
------------------------------------------------------
Results of Operations
- ---------------------
Bankers Corp. net income for the three month period ended March 31, 1997,
compared to the same period a year ago, increased $906,000 or 14.6%.
Earnings per share (EPS)on a fully diluted basis increased 19.1% to $0.56
for the first quarter of 1997 compared with $0.47 for the first quarter of
1996. The increase in EPS was due to an increase in earnings and
partially the result of treasury stock purchases under the Corporation's
last repurchase plan.
Total interest income increased by $9.2 million or 26.7% for the three
month period ended March 31, 1997 compared to the same period a year ago.
This increase was primarily due to the growth of earning assets offset by
decreased yields.
Total interest expense increased $7.4 million or 37.9% for the period
ended March 31, 1997 compared to the same period a year ago. Interest
expense on deposits for the three month period ended March 31, 1997
decreased by $504,000 or 2.7% compared to the same period last year. This
decrease was primarily due to a decrease in rates. Interest expense on
borrowing for the three month period ended March 31, 1997 increased $7.9
million compared to the same period last year due to higher average
balances.
Net interest income increased by $1.8 million or 12.2% for the three
months ended March 31, 1997 compared to the same period last year. The
increase in net interest income for the three 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
three month periods ended March 31, 1997 and 1996 were 2.27% and 2.69%,
respectively. The net yield on average interest earning assets for the
three month periods ended March 31, 1997 and 1996 were 2.76% and 3.23%,
respectively.
The provision for loan losses increased by $250,000 to $1.2 million for
the first three months of 1997 compared to $900,000 for the first three
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, other economic factors and discussions with
regulators after a recent regulatory examination.
Gains on the sale of loans increased $131,000 for the three month period
ended March 31, 1997, compared to the three month period ended March 31,
1996. Fees, service charges and other income increased $26,000 or 5.0%
for the three month period ended March 31, 1997 compared to the same
period last year.
Total other expenses for the three month period ending March 31, 1997
increased $271,000 or 5.5% compared to the same period a year ago.
Salaries and employee benefits for the three month period ended March 31,
1997 increased $305,000 or 13.5% compared to the same period last year.
This increase is primarily due to cost of living and merit increases.
Also the contributions made to the ESOP during the first three months of
1997 were larger than the contributions made in the first three months of
1996. The FDIC insurance premium for the three month period ended March
31, 1997 decreased $233,000 or 67.0% compared to the same period in 1996.
The decrease in the FDIC insurance premium resulted primarily from the
recapitalization of the Savings Association Insurance Fund, ("SAIF").
Amortization of intangibles for the three month period ended March 31,
1997 decreased $39,000 or 19.6% compared to the same period last year.
Net losses and expenses on OREO increased $21,000 or 9.1% for the three
month period ended March 31, 1997 compared to the same period last year.
Other operating expenses increased $322,000 or 27.5% compared to the same
period in 1996. This increase is primarily due to mortgage servicing fees
paid on our portfolio of mortgage loans serviced by others.
<PAGE> 10
Management's Discussion and Analysis of
Financial Condition and Results of Operations (cont'd)
------------------------------------------------------
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 $30.4
million compared to $29.0 million at December 31, 1996.
The following table sets forth information with respect to non-performing
assets for the quarters ended March 31, 1996 through March 31, 1997:
<TABLE>
<CAPTION>
(In Thousands)
At
March 31, Dec.31 , Sept.30, June 30, Mar.31,
1997 1996 1996 1996 1996
________ ________ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Non-accrual loans . . . . . . . . . . $22,866 $21,345 $19,915 $20,774 $23,062
Loans 90 days or more past due and
still accruing . . . . . . . . .. . 3,371 3,014 1,997 2,411 2,050
_______ _______ _______ _______ _______
Total non-performing loans. . . . . 26,237 24,359 21,912 23,185 25,112
_______ _______ _______ _______ _______
Other real estate owned . . . . . . . 4,765 5,267 6,605 6,607 5,761
Less allowance for other real estate
owned . . . . . . . . . . . . . . . 628 605 645 518 507
_______ _______ _______ _______ _______
Total other real estate owned . . . 4,137 4,662 5,960 6,089 5,254
_______ _______ _______ _______ _______
Total non-performing assets . . . . $30,374 $29,021 $27,872 $29,274 $30,366
_______ _______ _______ _______ _______
_______ _______ _______ _______ _______
Non-performing assets to total assets 1.20% 1.18% 1.20% 1.33% 1.59%
Non-performing loans to total loans 1.66% 1.46% 1.33% 1.42% 1.88%
</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 March 31, 1996 through March 31, 1997.
<TABLE>
<CAPTION>
(In Thousands)
At
March 31 ,Dec. 31, Sept 30,June 30, March 31,
1997 1996 1996 1996 1996
________ _______ _______ ________ _______
<S> <C> <C> <C> <C> <C>
Mortgage and Home Equity Loans:
1-4 Family residential. . . . . . . $22,262 $22,880 $21,130 $21,758 $22,819
Construction. . . . . . . . . . . . 0 0 0 596 822
Commercial and multi-family . . . . 3,971 1,470 770 810 1,439
Consumer and other loans. . . . . . . 4 9 12 21 32
_______ _______ _______ _______ _______
Total non-performing loans. . . . . $26,237 $24,359 $21,912 $23,185 $25,112
_______ _______ _______ _______ _______
_______ _______ _______ _______ _______
</TABLE>
Non-performing loans are primarily secured by 1-4 family residential
properties which represent $22.3 million or 84.8% of the total at March
31, 1997. The remainder of the non-performing loans include $255,000 and
$3.7 million of loans secured by multi-family dwellings and
non-residential properties, respectively, and $4,000 in consumer loans.
Non-performing loans at March 31, 1997 secured by real estate totaled 220
loans for an average balance of $119,000.
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, sales of loans available
for sale, borrowings, maturities of investment securities and short-term
investments and other funds provided by operations. While
<PAGE> 11
Management's Discussion and Analysis of
Financial Condition and Results of Operations (cont'd)
------------------------------------------------------
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 three months of 1997
and 1996 were the return of principal on mortgage loans and mortgage
backed securities due to loan prepayments. Another significant source of
funds during the first quarter of 1997 was a net increase in borrowing.
During the first three months of 1996 another significant source of funds
was a net increase in demand and savings deposits.
The primary uses of funds during the first three months of 1997 and 1996
were the origination and purchase of mortgage loans. The most
significant use of funds during the first three months of 1997 was the
purchase of mortgage and asset-backed securities held to maturity.
Another significant use during 1997 was the purchase of investment
securities held to maturity. Other significant uses of funds during the
first three months of 1996 were the purchase of securities available for
sale and a decrease in time deposits.
The Bank anticipates that it will have sufficient funds to meet its
unused home equity lines and loan commitments totaling $69.1 million at
March 31, 1997. Certificates of deposit maturing within one year or less
totaled $751.4 million. Management believes that a significant portion
of such deposits will remain with the Bank.
Stockholders' equity during the first three months of 1997 increased by
$4.9 million to $197.8 million primarily due to the retention of earnings
offset by the declaration of a cash dividend totaling $2.0 million and a
$364,000 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 March 31, 1997.
<TABLE>
<CAPTION>
Bankers Bankers Minimum
Corp. Savings Requirement
------- ------- -----------
<S> <C> <C> <C>
Risk Based Capital Ratio:
Tier 1 (core) 17.77% 17.52% 4.00%
Total 18.17% 17.92% 8.00%
Leverage Ratio 8.01% 7.88% 3.00%
</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 Page
------ ----
2.1 Agreement and Plan of Merger, dated February 5,
1997, between Sovereign Bancorp, Inc. and Bankers
Corp.(1)
2.2 Stock Option Agreement, dated February 5, 1997, by and
between Sovereign Bancorp, Inc. and Bankers Corp. (1)
11.0 Computation of earnings per share (filed herewith). 14
27.0 Financial Data Schedule (Edgar filing only).
(1) Incorporated by reference to the Corporation's
Current Report on Form 8-K filed on
February 11, 1997.
b) Reports on Form 8-K.
A report on Form 8-K was filed March 11, 1997 to announce
financial results for the year ended December 31, 1996. A
report on Form 8-K was filed February 11, 1997 to report an
Agreement and Plan of Merger, dated February 5, 1997, between
Sovereign Bancorp. Inc. and Bankers Corp.
<PAGE> 13
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: May 13, 1997 /s/Joseph P. Gemmell
------------ _________________________________
Joseph P. Gemmell
Chairman of the Board, President
and Chief Executive Officer
DATE: May 13, 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
March 31,
__________________
(in thousands, except per share data) 1997 1996
<S> <C> <C>
Primary:
Average shares outstanding 12,378 12,901
Net effect of the assumed exercise of
stock options-based on the treasury
stock method using average market
price 270 261
_______ _______
Total 12,648 13,162
====== ======
Net income $ 7,113 $ 6,207
======= =======
Net income per share $ 0.56 $ 0.47
Fully Diluted:
Average shares outstanding 12,378 12,901
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 275 261
_______ _______
Total 12,653 13,162
====== ======
Net income $ 7,113 $ 6,207
====== =====
Net income per share $ 0.56 $ 0.47
===== =====
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000857450
<NAME> BANKERS CORP.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 12,964
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 33,600
<INVESTMENTS-CARRYING> 886,720
<INVESTMENTS-MARKET> 884,753
<LOANS> 1,577,988
<ALLOWANCE> 7,237
<TOTAL-ASSETS> 2,541,672
<DEPOSITS> 1,642,231
<SHORT-TERM> 668,805
<LIABILITIES-OTHER> 32,840
<LONG-TERM> 0
0
0
<COMMON> 143
<OTHER-SE> 197,653
<TOTAL-LIABILITIES-AND-EQUITY> 2,541,672
<INTEREST-LOAN> 29,902
<INTEREST-INVEST> 13,631
<INTEREST-OTHER> 62
<INTEREST-TOTAL> 43,595
<INTEREST-DEPOSIT> 18,098
<INTEREST-EXPENSE> 26,752
<INTEREST-INCOME-NET> 16,843
<LOAN-LOSSES> 1,150
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 5,207
<INCOME-PRETAX> 11,170
<INCOME-PRE-EXTRAORDINARY> 11,170
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,113
<EPS-PRIMARY> 0.56
<EPS-DILUTED> 0.56
<YIELD-ACTUAL> 0
<LOANS-NON> 22,866
<LOANS-PAST> 3,371
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 6,596
<CHARGE-OFFS> 556
<RECOVERIES> 47
<ALLOWANCE-CLOSE> 7,237
<ALLOWANCE-DOMESTIC> 7,237
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</TABLE>
