<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 10-Q
[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
COMMISSION FILE NUMBER 0-19040
SOUTH FLORIDA BANK HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
FLORIDA 65-0221393
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2017 MCGREGOR BOULEVARD, FORT MYERS, FLORIDA 33901
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (941) 334-2020
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
------ ------
As of October 28, 1996, there were outstanding 1,210,975 shares of the
Registrant's Common Stock.
-1-
<PAGE> 2
SOUTH FLORIDA BANK HOLDING CORPORATION
FORM 10-Q - FOR THE QUARTER ENDED SEPTEMBER 30, 1996
INDEX
<TABLE>
<CAPTION>
PAGE
NO.
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
a) Consolidated Statements of Financial
Condition - September 30, 1996 (Unaudited)
and December 31, 1995......................................... 3
b) Unaudited Consolidated Income Statements - Nine
Months Ended September 30, 1996 and 1995...................... 4
c) Unaudited Consolidated Income Statements - Three
Months Ended September 30, 1996 and 1995...................... 5
d) Unaudited Consolidated Statements of Cash Flows
- Nine Months Ended September 30, 1996 and 1995............... 6
e) Notes to Unaudited Consolidated
Financial Statements.......................................... 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................. 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K................................ 23
SIGNATURES............................................................... 24
</TABLE>
-2-
<PAGE> 3
PART I. - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
SOUTH FLORIDA BANK HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
- ------
Cash and due from banks............. $ 3,000,356 $ 2,744,597
Federal funds sold.................. 2,608,000 5,337,000
Investments available-for-sale...... 5,449,375 11,477,830
Investments held-to-maturity
(market value of $9,696,000
and $6,358,000).................... 9,767,038 6,389,222
Loans, net of allowance for loan
losses of $936,471 and $852,270.... 42,405,444 35,693,367
Premises and equipment, net......... 439,527 502,514
Accrued interest receivable......... 443,493 496,157
Other real estate owned............. 548,500 582,500
Other assets........................ 467,004 366,932
----------- -----------
Total assets................... $65,128,737 $63,590,119
=========== ===========
LIABILITIES
- -----------
Deposits:
Demand deposits.................... $11,142,465 $10,390,053
NOW accounts....................... 7,717,539 8,467,512
Money market accounts.............. 9,064,682 8,352,581
Savings deposits................... 2,225,914 2,206,716
Time deposits under $100,000....... 23,937,102 23,440,999
Time deposits $100,000 and over.... 3,536,998 3,132,975
----------- -----------
Total deposits................. 57,624,700 55,990,836
Securities sold under
agreements to repurchase........... 921,912 1,623,320
Accrued interest payable............ 381,942 522,471
Other liabilities................... 82,851 67,407
----------- -----------
Total liabilities.............. 59,011,405 58,204,034
----------- -----------
SHAREHOLDERS' EQUITY
- --------------------
Common stock, $.01 par value,
10,000,000 shares authorized,
1,210,975 and 1,195,975 shares
outstanding........................ 12,110 11,960
Additional paid-in capital.......... 10,366,378 10,291,528
Net unrealized securities
gains (losses)..................... (55,925) 20,655
Retained deficit.................... (4,205,231) (4,938,058)
----------- -----------
Total shareholders' equity......... 6,117,332 5,386,085
----------- -----------
Total liabilities and
shareholders' equity.......... $65,128,737 $63,590,119
=========== ===========
</TABLE>
The accompanying Notes to Unaudited Consolidated Financial
Statements are an integral part of these financial statements.
-3-
<PAGE> 4
SOUTH FLORIDA BANK HOLDING CORPORATION
CONSOLIDATED INCOME STATEMENTS
<TABLE>
<CAPTION>
FOR THE NINE
MONTHS ENDED SEPTEMBER 30,
--------------------------
1996 1995
---------- ----------
(Unaudited)
<S> <C> <C>
INTEREST AND FEE INCOME
FROM EARNING ASSETS:
Loans............................... $2,744,455 $2,411,604
Federal funds sold.................. 124,092 146,307
Investment securities............... 732,320 766,830
---------- ----------
Total interest income............ 3,600,867 3,324,741
---------- ----------
INTEREST EXPENSE:
Deposits:
NOW accounts....................... 94,297 99,744
Money market accounts.............. 177,771 217,290
Savings deposits................... 38,414 43,264
Time deposits under $100,000....... 961,600 964,706
Time deposits $100,000 and over.... 120,746 119,476
Other............................... 31,694 28,890
---------- ----------
Total interest expense............ 1,424,522 1,473,370
---------- ----------
NET INTEREST INCOME............... 2,176,345 1,851,371
PROVISION FOR LOAN LOSSES............ --- 28,000
---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES........ 2,176,345 1,823,371
--------- ---------
NON-INTEREST INCOME:
Service charge income............... 328,970 362,659
Realized securities gains........... 3,828 ---
Other............................... 133,233 53,814
---------- ----------
Total non-interest income......... 466,031 416,473
---------- ----------
NON-INTEREST EXPENSES:
Personnel expense................... 917,144 925,734
Occupancy expense................... 397,805 442,685
Legal expenses...................... 84,007 70,274
Supplies............................ 49,161 40,413
Loan collection expenses............ 45,118 75,735
Advertising......................... 42,166 43,741
FDIC insurance...................... 21,296 83,963
Other .............................. 397,852 370,565
---------- ----------
Total non-interest expenses....... 1,954,549 2,053,110
---------- ----------
INCOME BEFORE INCOME TAXES........... 687,827 186,734
BENEFIT FOR INCOME TAXES............. 45,000 ---
---------- ----------
NET INCOME........................... $ 732,827 $ 186,734
========== ==========
NET INCOME PER SHARE................. $ .60 $ .19
========== ==========
Weighted average number of
common shares and common share
equivalents outstanding............. 1,218,065 1,002,875
========= =========
</TABLE>
The accompanying Notes to Unaudited Consolidated Financial
Statements are an integral part of these financial statements.
-4-
<PAGE> 5
SOUTH FLORIDA BANK HOLDING CORPORATION
CONSOLIDATED INCOME STATEMENTS
<TABLE>
<CAPTION>
FOR THE THREE
MONTHS ENDED SEPTEMBER 30,
--------------------------
1996 1995
---------- ----------
(Unaudited)
<S> <C> <C>
INTEREST AND FEE INCOME
FROM EARNING ASSETS:
Loans............................... $ 939,798 $ 851,067
Federal funds sold.................. 30,294 70,263
Investment securities............... 219,883 270,255
---------- ----------
Total interest income............ 1,189,975 1,191,585
---------- ----------
INTEREST EXPENSE:
Deposits:
NOW accounts....................... 29,564 33,254
Money market accounts.............. 58,175 68,419
Savings deposits................... 12,653 13,874
Time deposits under $100,000....... 320,754 377,404
Time deposits $100,000 and over.... 38,211 46,076
Other............................... 9,966 9,634
---------- ----------
Total interest expense............ 469,323 548,661
---------- ----------
NET INTEREST INCOME............... 720,652 642,924
PROVISION FOR LOAN LOSSES............ --- 6,000
---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES........ 720,652 636,924
---------- ----------
NON-INTEREST INCOME:
Service charge income............... 101,592 114,600
Realized securities gains........... --- ---
Other............................... 90,276 16,577
---------- ----------
Total non-interest income......... 191,868 131,177
---------- ----------
NON-INTEREST EXPENSES:
Personnel expense................... 305,700 309,772
Occupancy expense................... 125,078 146,955
Legal expenses...................... 16,796 11,384
Advertising......................... 11,867 7,067
Supplies............................ 11,348 13,117
FDIC insurance...................... 4,626 9,691
Loan collection expenses............ 1,693 18,164
Other .............................. 156,991 128,287
---------- ----------
Total non-interest expenses....... 634,099 644,437
---------- ----------
INCOME BEFORE INCOME TAXES........... 278,421 123,664
BENEFIT FOR INCOME TAXES............. 15,000 ---
---------- ----------
NET INCOME........................... $ 293,421 $ 123,664
========== ==========
NET INCOME PER SHARE................. $ .24 $ .13
========== ==========
Weighted average number of
common shares and common share
equivalents outstanding............. 1,215,520 1,002,875
========= =========
</TABLE>
The accompanying Notes to Unaudited Consolidated Financial
Statements are an integral part of these financial statements.
-5-
<PAGE> 6
SOUTH FLORIDA BANK HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
---------------------------------------
1996 1995
----------- -----------
(Unaudited)
<S> <C> <C>
CASH FLOWS PROVIDED BY (USED
IN) OPERATING ACTIVITIES:
Interest received............... $ 3,653,531 $ 3,196,821
Non-interest income............. 466,031 416,473
Interest paid................... (1,565,051) (1,264,553)
Personnel expenses.............. (917,144) (925,734)
Other operating expenditures.... (923,140) (1,036,593)
----------- -----------
Net cash provided by (used in)
operating activities......... 714,227 386,414
----------- -----------
CASH FLOWS PROVIDED BY (USED
IN) INVESTING ACTIVITIES:
Investments available-for-sale:
Purchases..................... (3,049,983) (8,983,547)
Maturities.................... 7,000,000 4,500,000
Sales......................... 1,954,923 ---
Investments held-to-maturity:
Purchases..................... (4,239,999) ---
Maturities.................... 862,183 170,090
Proceeds from the sales of
other real estate owned........ 31,665 1,532,318
Increase in loans............... (6,709,742) (3,299,472)
Increase in premises and
equipment...................... (43,971) (28,775)
----------- -----------
Net cash provided by (used
in) investing activities..... (4,194,924) (6,109,386)
----------- -----------
CASH FLOWS PROVIDED BY (USED
IN) FINANCING ACTIVITIES:
Increase (Decrease) in:
Demand deposits................ 752,412 (275,595)
NOW accounts................... (749,973) 1,250,640
Money market accounts.......... 712,101 (778,042)
Savings deposits............... 19,198 (239,472)
Time deposits.................. 900,126 8,481,553
Securities sold under
agreements to repurchase..... (701,408) 512,842
Exercise of stock options....... 75,000 ---
----------- -----------
Net cash provided by (used
in) financing activities..... 1,007,456 8,951,926
----------- -----------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS........ (2,473,241) 3,228,954
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD........... 8,081,597 4,331,235
----------- -----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD................. $ 5,608,356 $ 7,560,189
=========== ===========
</TABLE>
The accompanying Notes to Unaudited Consolidated Financial
Statements are an integral part of these financial statements.
-6-
<PAGE> 7
SOUTH FLORIDA BANK HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
Reconciliation of net income to net cash
provided by (used in) operating activities
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
---------------------------------------
1996 1995
----------------- --------------
(Unaudited)
<S> <C> <C>
Net income .......................... $ 732,827 $ 186,734
Adjustments:
Provision for loan losses........... --- 28,000
Depreciation and
amortization....................... 106,958 158,663
Decrease (Increase) in accrued
interest receivable................ 52,664 (127,920)
Increase in other assets............ (53,137) (90,378)
Increase (Decrease) in accrued
interest payable................... (140,529) 208,817
Increase (Decrease) in other
liabilities........................ 15,444 22,498
--------- ---------
Net cash provided by
operating activities............ $ 714,227 $ 386,414
========= =========
Supplemental schedule
of non-cash activities:
Loans transferred to
other real estate
owned............................. $ 29,140 $ 69,100
Net unrealized securities
gains (losses).................... (76,580) (78,307)
</TABLE>
The accompanying Notes to Unaudited Consolidated Financial
Statements are an integral part of these financial statements.
-7-
<PAGE> 8
SOUTH FLORIDA BANK HOLDING CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements include the accounts of the South Florida
Bank Holding Corporation ("Holding Corporation"), its wholly-owned subsidiary
South Florida Bank ("Bank"), and the Bank's two wholly-owned subsidiaries, New
Town Properties, Inc. and Valu Prop, Inc. (collectively, the "Company") after
elimination of all material intercompany balances and transactions.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete consolidated financial statements. In the opinion of the Company,
the consolidated financial statements reflect all adjustments which are of a
normal recurring nature and which are necessary to present fairly the
consolidated financial position of the Company as of September 30, 1996 and
December 31, 1995, and the results of its operations for the nine and three
months ended September 30, 1996 and 1995, and its cash flows for the nine
months ended September 30, 1996 and 1995. The results of operations for the
nine and three months ended September 30, 1996 are not necessarily indicative
of the results which may be expected for the entire fiscal year.
NOTE B-INVESTMENTS AVAILABLE-FOR-SALE AND INVESTMENTS HELD-TO-MATURITY
At September 30, 1996 and December 31, 1995, the carrying value, gross
unrealized gains and losses, and estimated market value of investments
available-for-sale and investments held-to-maturity were as follows:
<TABLE>
<CAPTION>
GROSS UNREALIZED CARRYING
AMORTIZED ----------------- VALUE
COST GAINS LOSSES (FAIR VALUE)
---------- ------ --------- ------------
(Unaudited)
<S> <C> <C> <C> <C>
INVESTMENTS
AVAILABLE-FOR-SALE:
1996
- ----
U.S. Agency
obligations due:
In one year or less..... $1,500,417 $ --- $( 3,542) $1,496,875
After one year
through five years..... 4,039,159 --- (86,659) 3,952,500
---------- ------ -------- ----------
Total investments
available-
for-sale............. $5,539,576 $ --- $(90,201) $5,449,375
========== ====== ======== ==========
</TABLE>
-8-
<PAGE> 9
<TABLE>
<S> <C> <C> <C> <C>
1995
- ----
U.S. Agency
obligations due:
In one year or less...... $ 5,992,046 $32,466 $ (1,232) $ 6,023,280
After one year
through five years...... 5,452,470 6,020 (3,940) 5,454,550
----------- ------- -------- -----------
Total investments
available-
for-sale.............. $11,444,516 $38,486 $ (5,172) $11,477,830
=========== ======= ======== ===========
</TABLE>
<TABLE>
<CAPTION>
CARRYING
VALUE GROSS UNREALIZED ESTIMATED
(AMORTIZED --------------------- MARKET
COST) GAINS LOSSES VALUE
---------- ------ -------- ----------
(Unaudited)
<S> <C> <C> <C> <C>
INVESTMENTS
HELD-TO-MATURITY:
1996
- ----
U.S. Agency
obligations due:
In one year or less........ $ 999,538 $ 1,932 $ --- $1,001,470
After one year
through five years........ 6,003,765 --- (30,769) 5,972,996
Collateralized mortgage
obligations due
after ten years............ 2,763,735 402 (42,689) 2,721,448
---------- ------- -------- ----------
Total investments
held-to-maturity......... $9,767,038 $ 2,334 $(73,458) $9,695,914
========== ======= ======== ==========
1995
- ----
U.S. Agency
obligations due:
In one year or less........ $ 995,380 $17,120 $ --- $1,012,500
After one year
through five years........ 3,050,945 2,175 (42,500) 3,010,620
Collateralized mortgage
obligations due
after ten years............ 2,342,897 1,426 (9,497) 2,334,826
---------- ------- -------- ----------
Total investments
held-to-maturity.......... $6,389,222 $20,721 $(51,997) $6,357,946
========== ======= ======== ==========
</TABLE>
Expected maturities for the collateralized mortgage obligations will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
During the three months ended June 30, 1996, the Bank sold $1,955,000 of
investments available-for-sale realizing a gain of $4,831 and losses of $1,003.
-9-
<PAGE> 10
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Consolidated total assets of South Florida Bank Holding Corporation (the
"Holding Corporation"), its subsidiary South Florida Bank (the "Bank"), and the
Bank's wholly-owned subsidiaries, New Town Properties, Inc. and Valu Prop, Inc.
(collectively, the "Company") increased to $65.1 million as of September 30,
1996 from $63.6 million as of December 31, 1995, an increase of $1.5 million or
2.42%. During the nine months ended September 30, 1996, the Bank offered a new
15- month time deposit, which, coupled with an officers' calling program,
resulted in a $1.6 million increase in deposits. The proceeds of these
deposits, along with liquid assets, were used to fund the increase in loans
receivable.
Earning assets, comprised of loans and the investment portfolio (which in turn
is comprised of investments held-to- maturity, investments available-for-sale,
and federal funds sold) increased, as discussed below, to $60.2 million at
September 30, 1996 from $58.9 million at December 31, 1995, an increase of $1.3
million or 2.26%. Non-earning assets (comprised of cash and due from banks,
premises and equipment, accrued interest receivable, other real estate owned
and other assets) increased to $4.9 million at September 30, 1996 from $4.7
million at December 31, 1995, an increase of $206,000 or 4.39%.
Net loans increased to $42.4 million at September 30, 1996 from $35.7 million
at December 31, 1995, an increase of $6.7 million or 18.80%. Mortgage loans
which increased $3.6 million were the primary components of outstanding loans.
Commercial loans increased $1.2 million and installment loans increased $1.8
million. Management's strategy is to lend to small-to-medium sized businesses.
For a discussion of the $317,000 loans on non-accrual status at September 30,
1996, and the increase in the allowance for loan losses to $936,000 at
September 30, 1996 from $852,000 at December 31, 1995, see "--Allowance for
Loan Losses".
The investment portfolio decreased to $17.8 million at September 30, 1996 from
$23.2 million at December 31, 1995, a decrease of $5.4 million or 23.18%. The
decrease in the investment portfolio was primarily used to fund the increase in
loans.
Deposits increased to $57.6 million at September 30, 1996 from $56.0 million at
December 31, 1995, an increase of $1.6 million or 2.92%. Core deposits
increased to $54.1 million at September 30, 1996 from $52.9 million at December
31, 1995, an increase of $1.2 million or 2.33%. This increase in core deposits
primarily resulted from the new 15-month time deposits and deposits generated
from the officers' calling program. At September 30, 1996 and December 31,
1995, the ratio of net loans to deposits was 73.59%
-10-
<PAGE> 11
and 63.75%, respectively.
Securities sold under agreements to repurchase ("Sweep Accounts") decreased to
$922,000 at September 30, 1996 from $1.6 million at December 31, 1995, a
decrease of $701,000 or 43.21%. This decrease resulted from Sweep Accounts
closing as originally contracted with the customers.
The Holding Corporation's shareholders' equity increased to $6.1 million at
September 30, 1996 from $5.4 million at December 31, 1995, an increase of
$731,000 or 13.58%. This increase was primarily the result of net income of
$733,000 during 1996 and the exercise of 15,000 stock options for $75,000,
partially offset with the $77,000 decrease resulting from unrealized securities
losses. See "--Results of Operations". See "--Capital Resources" for
additional information regarding the Bank's capital ratios.
-11-
<PAGE> 12
For the nine months ended September 30, 1996 and 1995, the Bank's average
statements of financial condition, interest income and expense, and yields
earned and rates paid were as follows:
<TABLE>
<CAPTION>
AVERAGE BALANCES, INTEREST YIELDS AND RATES
1996 1995
-------------------------------- --------------------------------
AVERAGE YIELD/ AVERAGE YIELD/
ASSETS: BALANCE INTEREST RATE BALANCE INTEREST RATE
- ------- ----------- ---------- ------ ----------- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
Loans (including non-accruing loans):
Commercial.......................... $ 7,415,756 $ 573,993 10.34% $ 6,136,455 $ 473,555 10.32%
Mortgage (a)........................ 26,425,175 1,803,749 9.12 23,469,665 1,642,154 9.35
Installment......................... 2,324,535 154,234 8.86 1,462,571 106,943 9.78
Other............................... 2,812,373 212,479 10.09 2,447,581 188,952 10.32
----------- ---------- ----- ----------- ---------- -----
Total loans, net of unearned income.. 38,977,839 2,744,455 9.41 33,516,272 2,411,604 9.62
Investment securities - all taxable.. 16,572,891 732,320 5.89 16,475,044 766,830 6.21
Federal funds sold................... 3,109,390 124,092 5.33 3,301,329 146,307 5.93
----------- ---------- ----- ----------- ---------- -----
Total earning assets - all taxable... 58,660,120 $3,600,867 8.20% 53,292,645 $3,324,741 8.34%
========== ===== ========== =====
Cash and due from banks.............. 2,742,840 2,441,439
Other assets......................... 1,866,105 2,912,679
Allowance for loan losses............ (929,147) (1,015,486)
----------- -----------
Total assets......................... $62,339,918 $57,631,277
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
- -------------------------------------
Interest-bearing deposits:
NOW accounts........................ $ 7,650,822 $ 94,297 1.65% $ 6,881,077 $ 99,744 1.94%
Money market accounts............... 9,504,685 186,564 2.62 9,393,031 217,290 3.09
Savings deposits.................... 2,312,747 38,414 2.22 2,266,678 43,264 2.55
Time deposits:
Under $100,000..................... 22,154,076 961,600 5.80 21,892,611 964,706 5.89
$100,000 and over.................. 2,917,907 120,746 5.53 2,775,633 119,476 5.76
----------- ---------- ----- ----------- ---------- -----
Total interest-bearing deposits...... 44,540,237 1,401,621 4.20 43,209,030 1,444,480 4.47
Securities sold under agreements to
repurchase.......................... 1,307,390 31,694 3.24 892,952 28,890 4.33
----------- ---------- ----- ----------- ---------- -----
Total interest-bearing liabilities... 45,847,627 $1,433,315 4.18% 44,101,982 $1,473,370 4.47%
========== ===== ========== =====
Demand deposits...................... 10,758,786 9,370,625
Other liabilities.................... 434,291 427,128
Shareholders' equity................. 5,299,214 3,731,542
----------- -----------
Total liabilities and
shareholders' equity................ $62,339,918 $57,631,277
=========== ===========
SPREAD AND INTEREST DIFFERENTIAL:
- ---------------------------------
Interest rate spread................. 4.02% 3.87%
===== =====
Excess of total earning assets over
total interest-bearing liabilities.. $12,812,493 $ 9,190,663
=========== ===========
Net yield on interest-earning assets. $2,167,552 4.94% $1,851,371 4.64%
========== ==== ========== =====
</TABLE>
(a) Interest income on mortgage loans included loan fees recognized as income
of $10,000 and $13,000 during the nine months ended September 30, 1996 and
1995, respectively.
-12-
<PAGE> 13
For the three months ended September 30, 1996 and 1995, the Bank's average
statements of financial condition, interest income and expense, and yields
earned and rates paid were as follows:
<TABLE>
<CAPTION>
AVERAGE BALANCES, INTEREST YIELDS AND RATES
1996 1995
-------------------------------- --------------------------------
AVERAGE YIELD/ AVERAGE YIELD/
ASSETS: BALANCE INTEREST RATE BALANCE INTEREST RATE
- ------- ----------- ---------- ------ ----------- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
Loans (including non-accruing loans):
Commercial.......................... $ 7,726,260 $ 182,605 9.40% $ 5,948,212 $ 169,615 11.31%
Mortgage (a)........................ 27,809,654 621,272 8.89 24,642,114 590,890 9.51
Installment......................... 2,877,287 61,817 8.55 1,414,270 35,347 9.92
Other............................... 2,969,566 74,104 9.93 2,545,136 55,215 8.61
----------- ---------- ----- ----------- ---------- -----
Total loans, net of unearned income.. 41,382,767 939,798 9.03 34,549,732 851,067 9.77
Investment securities - all taxable.. 15,034,726 219,883 5.85 17,582,217 270,255 6.15
Federal funds sold................... 2,268,244 30,294 5.31 4,820,708 70,263 5.78
----------- ---------- ----- ----------- ---------- -----
Total earning assets - all taxable... 58,685,737 $1,189,975 8.07% 56,952,657 $1,191,585 8.30%
========== ===== ========== =====
Cash and due from banks.............. 2,680,664 2,505,294
Other assets......................... 1,860,748 2,391,500
Allowance for loan losses............ (933,419) (881,357)
----------- -----------
Total assets......................... $62,293,730 $60,968,094
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
- -------------------------------------
Interest-bearing deposits:
NOW accounts........................ $ 7,333,599 $ 29,564 1.60% $ 7,021,900 $ 33,254 1.88%
Money market accounts............... 9,427,588 61,235 2.58 9,477,062 68,419 2.86
Savings deposits.................... 2,299,707 12,653 2.19 2,304,259 13,874 2.39
Time deposits:
Under $100,000..................... 22,262,983 320,754 5.73 24,522,765 377,404 6.11
$100,000 and over.................. 2,867,226 38,211 5.30 3,088,599 46,076 5.92
----------- ---------- ----- ----------- ---------- -----
Total interest-bearing deposits...... 44,191,103 462,417 4.16 46,414,585 539,027 4.61
Securities sold under agreements to
repurchase.......................... 1,203,599 9,966 3.29 969,815 9,634 3.94
----------- ---------- ----- ----------- ---------- -----
Total interest-bearing liabilities... 45,394,702 $ 472,383 4.14% 47,384,400 $ 548,661 4.59%
========== ===== ========== =====
Demand deposits...................... 10,940,056 9,233,908
Other liabilities.................... 426,387 515,442
Shareholders' equity................. 5,532,585 3,834,344
----------- -----------
Total liabilities and
shareholders' equity................ $62,293,730 $60,968,094
=========== ===========
SPREAD AND INTEREST DIFFERENTIAL:
- ---------------------------------
Interest rate spread................. 3.93% 3.71%
===== =====
Excess of total earning assets over
total interest-bearing liabilities.. $13,291,035 $ 9,568,257
=========== ===========
Net yield on interest-earning assets. $ 717,592 4.86% $ 642,924 4.48%
========== ==== ========== =====
</TABLE>
(a) Interest income on mortgage loans included loan fees recognized as income
of $6,000 and $2,000 during the three months ended September 30, 1996 and 1995,
respectively.
-13-
<PAGE> 14
LOAN PORTFOLIO
The Bank's loan portfolio is primarily concentrated in commercial, mortgage,
and installment loans. At September 30, 1996 and December 31, 1995, the
composition of the Bank's loan portfolio was as follows:
<TABLE>
<CAPTION>
1996 1995
------------------ ------------------
% OF % OF
TOTAL TOTAL
AMOUNT LOANS AMOUNT LOANS
----------- ----- ----------- -----
<S> <C> <C> <C> <C>
Commercial......... $ 8,233,234 19.00% $ 7,081,642 19.38%
Mortgage: (a)
Construction..... 1,283,610 2.96 1,331,809 3.64
Non-construction. 27,571,678 63.61 23,909,249 65.42
Installment (b).... 3,268,216 7.54 1,490,577 4.08
Other loans (c).... 2,985,177 6.89 2,732,360 7.48
----------- ------ ----------- ------
Total loans, net of
unearned income.. 43,341,915 100.00% 36,545,637 100.00%
====== ======
Allowance for loan
losses........... (936,471) 2.16% (852,270) 2.33%
----------- ====== ----------- ======
Loans, net......... $42,405,444 $35,693,367
=========== ===========
</TABLE>
___________________
(a) In addition to loans for the purchase, construction, improvement of or
investment in real estate, the Bank's real estate loans include all loans for
various other consumer or business purposes which are secured by real estate
mortgages.
(b) Installment loans generally include loans secured with mobile homes,
automobiles, trucks, boats, and equipment.
(c) Other loans generally include credit card loans, equity lines to
individuals, deposit overdraft protection and deposit overdrafts.
New loans and loan renewals are reviewed by management and the Directors,
including the potential created for possible credit concentrations. Management
reviews the loan portfolio on a quarterly basis for potential credit
concentrations. Loan concentrations are defined as amounts loaned to a number
of borrowers engaged in similar activities, which would cause them to be
similarly impacted by economic or other conditions. At September 30, 1996 and
December 31, 1995, no concentration of loans within any portfolio category to
any group of borrowers engaged in similar activities or in a similar business,
exceeded 10% of total loans, except that as of such date loans collateralized
with mortgages on real estate represented 66.57% and 69.06%, respectively, of
the loan portfolio and were to borrowers in varying activities and businesses.
-14-
<PAGE> 15
ALLOWANCE FOR LOAN LOSSES
For the nine months ended September 30, 1996 and 1995, the Bank's loan loss
experience and its provision for loan losses were as follows:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Average loans outstanding........... $38,977,839 $33,516,272
=========== ===========
Net loans at end of period.......... $42,405,444 $34,950,018
=========== ===========
Allowance for loan losses at
beginning of period............... $ 852,270 $ 1,342,763
Loans charged-off:
Commercial........................ 27,535 228,732
Mortgage.......................... 17,348 465,226
Installment....................... 3,303 6,092
Other loans....................... 8,687 50,952
----------- -----------
Total loans charged-off............. 56,873 751,002
----------- -----------
Recoveries of loans
previously charged-off:
Commercial...................... 115,993 142,474
Mortgage........................ 20,302 89,890
Installment..................... 3,097 6,956
Other loans..................... 1,682 4,000
----------- -----------
Total recoveries.................... 141,074 243,320
----------- -----------
Net loan charge-offs (recoveries)... (84,201) 507,682
Provision charged to expense........ --- 28,000
----------- -----------
Allowance for loan losses at
end of period..................... $ 936,471 $ 863,081
=========== ===========
Ratio of net charge-offs during
period to average net
loans outstanding................. (.29)% 2.02%
Allowance for loan losses as a
percentage of loans, net of
unearned income at end of period.. 2.16 % 2.41%
</TABLE>
During 1996, eleven loans were charged-off. During 1996, the two largest loan
recoveries were $48,000 and $31,000, or 55.59% of total recoveries. The
remaining recoveries which totaled $62,000 encompassed 24 loans, none of which
exceeded $16,000.
At September 30, 1996 and December 31, 1995, the Bank's non-
-15-
<PAGE> 16
performing loans and repossessed assets were as follows:
<TABLE>
<CAPTION>
1996 1995
------------------ ------------------
% OF % OF
AMOUNT LOANS AMOUNT LOANS
---------- ----- ---------- -----
<S> <C> <C> <C> <C>
Non-accruing loans:
Under 90 days delinquent... $ 122,909 .28% $ 262,855 .72%
90 or more days delinquent. 194,063 .45 413,477 1.13
---------- ---- ---------- ----
Total non-accruing loans.... $ 316,972 .73% $ 676,332 1.85%
========== ==== ========== ====
Total real estate owned..... $ 548,500 1.27% $ 582,500 1.59%
---------- ---- ---------- ----
Total non-performing assets. $ 865,472 2.00% $1,258,832 3.44%
========== ==== ========== ====
Loans delinquent and
accruing:
30 to 59 days.............. $ 34,820 .08% $ 145,495 .40%
60 to 89 days.............. 25,482 .06 82,371 .22
---------- ---- ---------- ----
Total.................... $ 60,302 .14% $ 227,866 .62%
========== ==== ========== ====
Total delinquencies
30 days and over........... $ 377,274 .87% $ 904,198 2.47%
========== ==== ========== ====
</TABLE>
Non-performing assets decreased to $865,000 at September 30, 1996 from $1.3
million at December 31, 1995, or a decrease of $393,000 or 31.25%. This
decrease occurred primarily due to loan repayments on certain loans allowing
the loans to be returned to accrual status, loan repayments on other loans
which remain on non-accrual status, and the Bank writing-down a certain piece
of other real estate owned by $34,000. The ratio of non-performing loans as a
percent of total loans, net of unearned income, was .73% and 1.85% at September
30, 1996 and December 31, 1995, respectively. The allowance for loan losses as
a percentage of non-performing loans was 295.44% and 126.01% at September 30,
1996 and December 31, 1995, respectively.
Non-accruing loans totaled $317,000 on September 30, 1996 compared to $676,000
on December 31, 1995, a decrease of $359,000 or 53.13%. The largest
non-accruing loan at September 30, 1996 was a $123,000 first mortgage loan
secured with commercial real estate. As of September 30, 1996, this loan was
current.
As of September 30, 1996, other real estate owned, all of which is located in
Lee County, Florida and which was recorded at the lower of fair value or the
loan balance, was comprised of two parcels of raw land with a carrying value of
$535,500 (and a fair value of $572,000) and two single-family residential lots
with a carrying value of $13,000 (and a fair value of $14,000).
SHORT-TERM BORROWINGS
The Bank has entered into short-term borrowing arrangements with certain of its
customers. These arrangements, entitled "Sweep Accounts", call for the Bank to
automatically transfer customer funds in excess of certain pre-defined amounts
from the customer's
-16-
<PAGE> 17
insured deposit account to the Sweep Account. The Sweep Accounts mature weekly
and were collateralized with U. S. Government agency securities totaling
$968,000 at September 30, 1996 and $1.7 million at December 31, 1995;
accordingly, they were classified on the Company's consolidated statements of
financial condition as securities sold under agreements to repurchase.
For the nine months ended September 30, 1996 and 1995, the Bank's short-term
borrowings were as follows:
<TABLE>
<CAPTION>
1996 1995
---------- --------
<S> <C> <C>
Period ended September 30:
Average indebtedness
outstanding............. $1,307,390 $892,952
Average rate paid........ 3.24% 4.33%
Maximum indebtedness
at any month-end....... $1,415,369 $1,186,000
At September 30:
Balance outstanding...... $ 921,912 $1,006,160
Rate paid................ 3.14% 3.84%
</TABLE>
CAPITAL RESOURCES
The Holding Corporation's total shareholders' equity was $6.1 million and $5.4
million at September 30, 1996 and December 31, 1995, respectively. This
increase was the result of 1996's net income of $733,000 and the $75,000
proceeds from the exercise of stock options, partially offset with the $77,000
decrease resulting from unrealized securities losses. The Bank's total
shareholder's equity was $5.7 million and $5.0 million at September 30, 1996
and December 31, 1995, respectively. The increase in the Bank's shareholder's
equity was the result of the Bank's net income of $742,000 partially offset
with the $77,000 decrease in the unrealized securities gains (losses) to
September 30, 1996 from December 31, 1995.
The Bank's total risk-based capital (total capital to risk-weighted assets),
Tier 1 risk-based capital (Tier 1 capital to risk-weighted assets) and leverage
(Tier 1 capital to total average assets during the three months ended September
30, 1996 and December 31, 1995) ratios as compared to the ratios mandated by
the FDIC were as follows:
<TABLE>
<CAPTION>
TOTAL TIER 1
RISK-BASED RISK-BASED LEVERAGE
CATEGORY CAPITAL RATIO CAPITAL RATIO RATIO
-------- ------------- ------------- --------
<S> <C> <C> <C>
Well capitalized per FDIC
(minimum ratios).............. 10.00% 6.00% 5.00%
Bank:
December 31, 1995............. 13.33 12.07 8.05
September 30, 1996............ 13.68 12.42 9.19
</TABLE>
-17-
<PAGE> 18
LIQUIDITY
During the nine months ended September 30, 1996 and 1995, investing activities
used $4.2 million and $6.1 million, respectively, of cash. During the nine
months ended September 30, 1996 and 1995, financing activities provided $1.0
million and $9.0 million, respectively, of cash. During the nine months ended
September 30, 1996, the Bank offered a new 15-month time deposit, which,
coupled with an officers' calling program, resulted in a $1.6 million increase
in deposits. The proceeds of these deposits, along with liquid assets, were
used to fund the increase in loans receivable.
RESULTS OF OPERATIONS
SUMMARY
The Company's net income was $733,000 and $293,000 for the nine and three
months ended September 30, 1996, or $.60 and $.24 per share, as compared to
$187,000 and $124,000 for the nine and three months ended September 30, 1995,
or $.19 and $.13 per share. The $546,000 increase in the Company's net income
during the nine months ended September 30, 1996 as compared to the nine months
ended September 30, 1995 primarily resulted from a $325,000 increase in net
interest income, a $50,000 increase in non-interest income, a $99,000 decrease
in non-interest expense and a $45,000 benefit for income taxes. The $169,000
increase in the Company's net income during the three months ended September
30, 1996 as compared to the three months ended September 30, 1995 primarily
resulted from a $78,000 increase in net interest income, a $61,000 increase in
non-interest income and a $15,000 benefit for income taxes.
In addition, the Bank made no provision for loan losses during 1996 as compared
to a provision for loan losses of $28,000 during the nine months ended
September 30, 1995. However, the loan loss allowance increased at September
30, 1996 from December 31, 1995 due to net loan recoveries of $84,000 during
the nine months ended September 30, 1996.
For the nine and three months ended September 30, 1996 and 1995, the Company's
performance ratios were as follows:
<TABLE>
<CAPTION>
1996 1995
------------- -------------
NINE THREE NINE THREE
------ ----- ------ -----
<S> <C> <C> <C> <C>
Return on average
assets (annualized)............. 1.57% 1.88% .43% .81%
Return on average
equity (annualized)............. 18.44 21.21 6.67 12.90
Average equity to average assets... 8.50 8.88 6.47 6.29
</TABLE>
NET INTEREST INCOME
The Bank's earnings are dependent primarily on its net interest
-18-
<PAGE> 19
income which is the excess of interest income earned on earning assets
(primarily loans and the investment portfolio - all of which are taxable) over
interest expense paid on deposits and short-term borrowings. Changes in net
interest income are caused by changes in the interest rates earned or paid and
by volume changes in loans, the investment portfolio, deposits and short-term
borrowings.
The increase (decrease) during the nine months ended September 30, 1996 from
the nine months ended September 30, 1995 in the Bank's interest income earned
and interest expense paid resulting from changes in volumes of, rates earned or
paid on, and the combined effect of changes in both volume and rate on, various
categories of interest-earning assets and interest-bearing liabilities were as
follows:
<TABLE>
<CAPTION>
VOLUME/
VOLUME RATE RATE TOTAL
--------- --------- --------- --------
<S> <C> <C> <C> <C>
ASSETS:
- -------
Loans:
Commercial............ $ 98,996 $ 984 $ 458 $100,438
Mortgage.............. 207,363 (41,732) (4,036) 161,595
Installment........... 63,200 (10,017) (5,892) 47,291
Other................. 28,239 (4,215) (497) 23,527
-------- -------- -------- --------
Total loans.......... 397,798 (54,980) (9,967) 332,851
Investment securities. 4,554 (38,834) (230) (34,510)
Federal funds sold.... (8,530) (14,716) 1,031 (22,215)
-------- -------- -------- --------
Total interest income.. 393,822 (108,530) (9,166) 276,126
-------- -------- -------- --------
LIABILITIES:
- ------------
Interest-bearing deposits:
NOW accounts.......... 11,188 (15,053) (1,582) (5,447)
Money market accounts. 2,590 (33,178) (138) (30,726)
Savings deposits...... 882 (5,665) (67) (4,850)
Time deposits:
Under $100,000....... 11,553 (15,371) 712 (3,106)
$100,000 and over.... 6,141 (4,736) (135) 1,270
-------- -------- -------- --------
Total interest-
bearing deposits..... 32,354 (74,003) (1,210) (42,859)
Securities sold under
agreements to
repurchase............ 13,445 (7,283) (3,358) 2,804
-------- -------- -------- --------
Total interest expense. 45,799 (81,286) (4,568) (40,055)
-------- -------- -------- --------
Net interest income.... $348,023 $(27,244) $ (4,598) $316,181
======== ======== ======== ========
</TABLE>
The Bank's net interest income increased to $2.2 million during the nine months
ended September 30, 1996 from $1.9 million during the nine months ended
September 30, 1995, an increase of $316,000 or 17.08%. The increase was
primarily due to the increase in the Bank's average total loans and the
increased net interest margin. The 16.50% volume increase in 1996 from 1995 in
loan interest
-19-
<PAGE> 20
income was primarily attributable to the 14.01% increase in average loans. The
.44% volume decrease in 1996 from 1995 in investment interest income was
primarily attributable to the .48% decrease in average investments. The 11.85%
volume increase in 1996 from 1995 in interest expense was primarily
attributable to the 9.15% increase in average interest- bearing liabilities.
The interest rate variance for loans primarily resulted from interest
recoveries during the nine months ended September 30, 1996 for interest
charged-off prior to December 31, 1995. The yield on the investment portfolio
decreased 37 basis points reflecting primarily the decrease in yields on
federal funds sold. The interest rates paid on interest-bearing liabilities
decreased 29 basis points as the Bank paid lower interest rates on new deposit
accounts than those maturing subsequent to 1995. The overall result was an
increase in the net interest margin to 4.94% during the nine months ended
September 30, 1996 from 4.64% during the nine months ended September 30, 1995.
The increase (decrease) during the three months ended September 30, 1996 from
the three months ended September 30, 1995 in the Bank's interest income earned
and interest expense paid resulting from changes in volumes of, rates earned or
paid on, and the combined effect of changes in both volume and rate on, various
categories of interest-earning assets and interest-bearing liabilities were as
follows:
<TABLE>
<CAPTION>
VOLUME/
VOLUME RATE RATE TOTAL
--------- --------- --------- --------
<S> <C> <C> <C> <C>
ASSETS:
- -------
Loans:
Commercial............ $ 50,288 $(28,414) $ (8,884) $ 12,990
Mortgage.............. 75,335 (38,556) (6,397) 30,382
Installment........... 36,267 (4,839) (4,958) 26,470
Other................. 9,133 8,403 1,353 18,889
-------- -------- -------- --------
Total loans.......... 171,023 (63,406) (18,886) 88,731
Investment securities. (39,157) (13,115) 1,900 (50,372)
Federal funds sold.... (36,900) (5,656) 2,587 (39,969)
-------- -------- -------- --------
Total interest income.. 94,966 (82,177) (14,399) (1,610)
-------- -------- -------- --------
LIABILITIES:
- ------------
Interest-bearing deposits:
NOW accounts.......... 1,464 (4,829) (325) (3,690)
Money market accounts. (354) (6,639) (191) (7,184)
Savings deposits...... (27) (1,152) (42) (1,221)
Time deposits:
Under $100,000....... (34,494) (22,936) 780 (56,650)
$100,000 and over.... (3,276) (4,763) 174 (7,865)
-------- -------- -------- --------
Total interest-
bearing deposits..... (36,687) (40,319) 396 (76,610)
Securities sold under
agreements to
repurchase............ 2,303 (1,569) (402) 332
-------- -------- -------- --------
Total interest expense. (34,384) (41,888) (6) (76,278)
-------- -------- -------- --------
Net interest income.... $129,350 $(40,289) $(14,393) $ 74,668
======== ======== ======== ========
</TABLE>
-20-
<PAGE> 21
The Bank's net interest income increased to $718,000 during the three months
ended September 30, 1996 from $643,000 during the three months ended September
30, 1995, an increase of $75,000 or 11.61%. The increase was primarily due to
the increase in the Bank's average total assets and the increased net interest
margin. The 20.10% volume increase in 1996 from 1995 in loan interest income
was primarily attributable to the 16.51% increase in average loans. The 22.34%
volume decrease in 1996 from 1995 in investment interest income was primarily
attributable to the 29.47% decrease in average investments. The 6.27% volume
decrease in 1996 from 1995 in interest expense was primarily attributable to
the 4.38% decrease in average interest-bearing liabilities. The yield on the
investment portfolio decreased 25 basis points reflecting primarily the
decrease in yields on federal funds sold. The interest rates paid on
interest-bearing liabilities decreased 45 basis points as the Bank paid lower
interest rates on new deposit accounts than those maturing subsequent to 1995.
The overall result was an increase in the net interest margin to 4.86% during
the three months ended September 30, 1996 from 4.48% during the three months
ended September 30, 1995.
As interest rates continue to change, the Bank's net interest margin will
continue to change by the repricing of the interest-earning assets at different
times than the repricing of interest-costing liabilities.
PROVISION FOR LOAN LOSSES
The Bank made no provision for loan losses during the nine and three months
ended September 30, 1996, as compared to $28,000 and $6,000 during the nine and
three months ended September 30, 1995. Net charge-offs (recoveries) during the
nine months ended September 30, 1996 were $(84,000) as compared to $508,000
during the nine months ended September 30, 1995. As of September 30, 1996 and
December 31, 1995, the allowance for loan losses as a percentage of loans net
of unearned income was 2.16% and 2.33%, respectively, and as a percentage of
non-accrual loans was 295.44% and 126.01%, respectively. See "--Financial
Condition -- Allowance for Loan Losses".
NON-INTEREST INCOME
Deposit service charge income decreased to $329,000 and $102,000 (or .79% and
.74% of average deposits) during the nine and three months ended September 30,
1996, from $363,000 and $115,000 (or .92% and .96% of average deposits) during
the nine and three months ended September 30, 1995, or respective decreases of
$34,000 or 9.29% and $13,000 or 11.35%. These decreases were primarily due to
the decreased volume in overdraft charges.
Other non-interest income increased to $133,000 and $90,000 during the nine and
three months ended September 30, 1996, from $54,000
-21-
<PAGE> 22
and $17,000 during the nine and three months ended September 30, 1995, or
respective increases of $79,000 or 147.58% and $73,000 or 444.59%. These
increases resulted from a $70,000 settlement with Lee County for business
damages resulting from the Mid-Point bridge construction in front of the
Colonial branch.
NON-INTEREST EXPENSE
Personnel expenses decreased to $917,000 and $306,000 during the nine and three
months ended September 30, 1996, respectively, from $926,000 and $310,000
during the nine and three months ended September 30, 1995, or respective
decreases of $9,000 or .93% and $4,000 or 1.31%. These decreases primarily
resulted from a decrease in the number of employees. The average of month-end
full-time equivalent employees during the nine and three months ended September
30, 1996 was 32.60 and 32.63, respectively, as compared to 33.95 and 32.25
employees during the nine and three months ended September 30, 1995,
respectively. As of September 30, 1996 and December 31, 1995, the Bank
employed 32 and 31 full-time and four and two part-time employees,
respectively.
Occupancy expense decreased to $398,000 and $125,000 during the nine and three
months ended September 30, 1996, respectively, from $443,000 and $147,000
during the nine and three months ended September 30, 1995, or respective
decreases of $45,000 or 10.14% and $22,000 or 14.89%. These decreases
primarily resulted from lower depreciation expense as assets became fully
depreciated.
Legal expenses increased to $84,000 and $17,000 during the nine and three
months ended September 30, 1996, respectively, from $70,000 and $11,000 during
the nine and three months ended September 30, 1995, or respective increases of
$14,000 or 19.54% and $6,000 or 47.54%. These increases reflected attorney's
costs for collection efforts on certain loans charged-off in prior years.
Loan collection expenses, excluding legal expenses but including real estate
taxes, insurance, gain (loss) on the sale of other real estate owned, and
appraisal costs on real estate in foreclosure, decreased to $45,000 and $2,000
during the nine and three months ended September 30, 1996, respectively, from
$76,000 and $18,000 during the nine and three months ended September 30, 1995,
or respective decreases of $31,000 or 40.43% and $16,000 or 90.68%. These
decreases primarily resulted from a reduction in write-downs and losses on
disposal of other real estate owned.
FDIC insurance expense decreased to $21,000 and $5,000 during the nine and
three months ended September 30, 1996, respectively, from $84,000 and $10,000
during the nine and three months ended September 30, 1995, or respective
decreases of $63,000 or 74.64% and $5,000 or 52.26%. These decreases were
primarily due to a decrease in FDIC insurance rates.
-22-
<PAGE> 23
Other operating expenses increased to $398,000 and $157,000 during the nine and
three months ended September 30, 1996, respectively, from $371,000 and $128,000
during the nine and three months ended September 30, 1995, or respective
increases of $27,000 or 7.36% and $29,000 or 22.37%. These increases resulted
primarily from increased intangible tax expense.
INCOME TAXES
During the nine and three months ended September 30, 1996, the Company recorded
a $45,000 and $15,000 deferred income tax asset, respectively, resulting from
the corresponding reduction in the valuation allowance associated with the
Company's tax loss carry forward. During the nine and three months ended
September 30, 1995, the Company recorded no net income tax expense or benefit.
PART II. - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Exhibits
27 Financial Data Schedule (FOR SEC USE ONLY)
Reports on Form 8-K
-23-
<PAGE> 24
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.
SOUTH FLORIDA BANK HOLDING CORPORATION
Date: October 28, 1996 By: /s/ William P. Valenti
--------------------------- ---------------------------------
William P. Valenti, President and
Chief Executive Officer
(Principal financial officer)
Date: October 28, 1996 By: /s/ Sharon Landel
--------------------------- ---------------------------------
Sharon Landel
Controller
(Principal accounting officer)
-24-
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 3,000,356
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,608,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 5,449,375
<INVESTMENTS-CARRYING> 9,767,038
<INVESTMENTS-MARKET> 9,696,000
<LOANS> 42,405,444
<ALLOWANCE> 936,471
<TOTAL-ASSETS> 65,128,737
<DEPOSITS> 57,624,700
<SHORT-TERM> 921,912
<LIABILITIES-OTHER> 0
<LONG-TERM> 464,793
0
0
<COMMON> 12,110
<OTHER-SE> 6,105,222
<TOTAL-LIABILITIES-AND-EQUITY> 65,128,737
<INTEREST-LOAN> 2,744,455
<INTEREST-INVEST> 732,320
<INTEREST-OTHER> 124,092
<INTEREST-TOTAL> 3,600,867
<INTEREST-DEPOSIT> 1,392,828
<INTEREST-EXPENSE> 31,694
<INTEREST-INCOME-NET> 2,176,345
<LOAN-LOSSES> 0
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<INCOME-PRETAX> 687,827
<INCOME-PRE-EXTRAORDINARY> 732,827
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<NET-INCOME> 732,827
<EPS-PRIMARY> .60
<EPS-DILUTED> .60
<YIELD-ACTUAL> 8.20
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<ALLOWANCE-OPEN> 852,270
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<RECOVERIES> 141,074
<ALLOWANCE-CLOSE> 936,471
<ALLOWANCE-DOMESTIC> 936,471
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
