SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
For Quarter Ended September 30, 1999 Commission File Number 0-20378
CENIT BANCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware 54-1592546
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
225 West Olney Road
Norfolk, Virginia 23510
(Address of principal executive (Zip code)
office)
Registrant's telephone number, including area code: (757) 446-6600
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
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock $.01 Par Value 4,813,644
- --------------------------- ----------------------------
Title of Class Number of Shares Outstanding
as of November 1, 1999
<PAGE>
CENIT BANCORP, INC. AND SUBSIDIARY
Contents
- --------------------------------------------------------------------------------
Page
----
PART I - FINANCIAL INFORMATION
Item 1
Financial Statements
Consolidated Statement of Financial Condition as of September 30, 1999
(Unaudited) and December 31, 1998............................................1
Unaudited Consolidated Statement of Operations for the Three Months and Nine
Months ended September 30, 1999 and September 30, 1998.......................2
Unaudited Consolidated Statement of Comprehensive Income for the Nine
Months Ended September 30, 1999 and September 30, 1998.......................3
Unaudited Consolidated Statement of Changes in Stockholders' Equity for the
Nine Months ended September 30, 1999.........................................4
Unaudited Consolidated Statement of Cash Flows for the Nine Months ended
September 30, 1999 and September 30, 1998....................................5
Notes to Unaudited Consolidated Financial Statements.........................6
Item 2
Management's Discussion and Analysis of Financial Condition and Results
of Operations.............................................................6
Item 3
Quantitative and Qualitative Disclosures About Market Risk...............19
PART II - OTHER INFORMATION
Item 1
Legal Proceedings........................................................20
Item 2
Changes in Securities....................................................20
Item 3
Defaults Upon Senior Securities..........................................20
Item 4
Submission of Matters to a Vote of Security Holders......................20
Item 5
Other Information........................................................20
Item 6
Exhibits and Reports on Form 8-K.........................................20
Signatures..................................................................20
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
CENIT BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(Dollars in thousands, except per share data)
ASSETS
<TABLE>
<CAPTION>
(Unaudited)
September 30, 1999 December 31, 1998
------------------ -----------------
<S> <C> <C>
Cash $ 19,377 $ 14,656
Federal funds sold 4,811 42,289
Securities available for sale at fair value (adjusted
cost of $132,215 and $64,327, respectively) 131,814 65,136
Loans, net:
Held for investment 466,140 484,783
Held for sale 1,000 3,878
Interest receivable 4,010 3,723
Real estate owned, net 200 377
Federal Home Loan Bank stock, at cost 5,450 5,066
Property and equipment, net 12,896 13,002
Goodwill and other intangibles, net 3,380 3,647
Other assets 3,712 4,499
---------- ---------
$ 652,790 $ 641,056
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing $ 67,974 $ 78,712
Interest-bearing 409,627 418,060
---------- ---------
Total deposits 477,601 496,772
Advances from the Federal Home Loan Bank 105,000 75,000
Securities sold under agreements to repurchase 14,926 13,084
Advance payments by borrowers for taxes and insurance 865 599
Other liabilities 3,240 5,525
---------- ---------
Total liabilities 601,632 590,980
---------- ---------
Stockholders' equity:
Preferred stock, $.01 par value; authorized 3,000,000
shares; none outstanding - -
Common stock, $.01 par value; authorized 7,000,000 shares;
issued and outstanding 4,813,644 and 4,808,806 shares,
respectively 48 48
Additional paid-in capital 14,051 14,177
Retained earnings - substantially restricted 41,360 39,600
Common stock acquired by Employee Stock Ownership Plan (ESOP) (3,910) (4,052)
Common stock acquired by Management Recognition
Plan (MRP) (142) (199)
Accumulated other comprehensive (loss) income,
net of income taxes (249) 502
---------- ---------
Total stockholders' equity 51,158 50,076
---------- ---------
$ 652,790 $ 641,056
========== =========
<FN>
The notes to unaudited consolidated financial statements are an integral part of this statement.
</FN>
</TABLE>
1
<PAGE>
CENIT BANCORP, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Three months Nine Months
Ended Ended
September 30, September 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest and fees on loans $ 8,857 $ 10,115 $ 27,500 $ 30,439
Interest on mortgage-backed certificates 731 378 1,263 2,884
Interest on investment securities 847 644 2,425 2,011
Dividends and other interest income 255 230 796 914
-------- --------- --------- ---------
Total interest income 10,690 11,367 31,984 36,248
-------- --------- --------- ---------
Interest on deposits 4,193 4,891 12,560 14,988
Interest on borrowings 1,255 1,115 3,591 5,209
-------- --------- --------- ---------
Total interest expense 5,448 6,006 16,151 20,197
-------- --------- --------- ---------
Net interest income 5,242 5,361 15,833 16,051
Provision for loan losses 39 100 75 440
-------- --------- --------- ---------
Net interest income after provision
for loan losses 5,203 5,261 15,758 15,611
-------- --------- --------- ---------
Other income:
Merchant processing fees 716 618 1,907 1,548
Deposit fees 603 602 1,886 1,822
Gains on sales of loans and securities, net 174 318 606 780
Commercial mortgage brokerage fees - 30 168 393
Other 398 235 979 694
-------- --------- --------- ---------
Total other income 1,891 1,803 5,546 5,237
-------- --------- --------- ---------
Other expenses:
Salaries and employee benefits 1,951 2,052 6,522 6,246
Equipment, data processing and supplies 730 690 2,221 2,168
Merchant processing 550 515 1,533 1,347
Net occupancy expense of premises 528 477 1,576 1,404
Professional fees 88 105 479 472
Expenses, gains/losses on sales and provision
for losses on real estate owned, net 11 11 46 91
Other 691 656 1,888 1,977
-------- --------- --------- ---------
Total other expenses 4,549 4,506 14,265 13,705
-------- --------- --------- ---------
Income before income taxes 2,545 2,558 7,039 7,143
Provision for income taxes 916 934 2,534 2,557
-------- --------- --------- ---------
Net income $ 1,629 $ 1,624 $ 4,505 $ 4,586
======== ========= ========= =========
Earnings per share:
Basic $ .35 $ .34 $ .98 $ .97
======== ========= ========= =========
Diluted $ .35 $ .33 $ .97 $ .94
======== ========= ========= =========
Dividends per common share paid $ .15 $ .10 $ .45 $ .30
======== ========= ========= =========
<FN>
The notes to unaudited consolidated financial statements are an integral part of this statement.
</FN>
</TABLE>
2
<PAGE>
CENIT BANCORP, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Dollars in thousands)
<TABLE>
<CAPTION>
Nine Months
Ended
September 30,
1999 1998
---- ----
<S> <C> <C>
Net income $ 4,505 $ 4,586
Other comprehensive loss, before income taxes:
Unrealized losses on securities available for sale:
Unrealized holding losses arising during the period (1,211) (246)
Less: reclassification adjustment for gains included in net income - (72)
-------- -------
Other comprehensive loss, before income taxes (1,211) (318)
Income tax benefit related to items of other comprehensive loss 460 88
-------- -------
Other comprehensive loss, net of income taxes (751) (230)
-------- -------
Comprehensive income $ 3,754 $ 4,356
======== =======
<FN>
The notes to unaudited consolidated financial statements are an integral part of this statement.
</FN>
</TABLE>
3
<PAGE>
CENIT BANCORP, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Nine Months Ended September 30, 1999
(Dollars in thousands)
<TABLE>
<CAPTION>
Accumulated
Common Other
Stock Comprehensive
Common Additional Acquired Income (Loss),
Common Stock Paid-In Retained by ESOP Net of Income
Stock Shares Amount Capital Earnings and MRP Taxes Total
------------ ------ ---------- -------- ------- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1998 4,808,806 $ 48 $14,177 $39,600 $(4,251) $ 502 $ 50,076
Comprehensive income - - - 4,505 - (751) 3,754
Cash dividends declared - - - (2,745) - - (2,745)
Exercise of stock options and
related tax benefits 23,168 - 198 - - - 198
Stock repurchases (18,330) - (373) - - - (373)
Other - - 49 - 199 - 248
--------- ---- ------- ------- ------- ------ --------
Balance, September 30, 1999 4,813,644 $ 48 $14,051 $41,360 $(4,052) $ (249) $ 51,158
========= ==== ======= ======= ======= ====== ========
<FN>
The notes to unaudited consolidated financial statements are an integral part of this statement.
</FN>
</TABLE>
4
<PAGE>
CENIT BANCORP, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Nine months ended September 30,
--------------------------------
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,505 $ 4,586
Add (deduct) items not affecting cash in the period:
Provision for loan losses 75 440
Provision for losses on real estate owned 22 14
Amortization of loan yield adjustments 569 399
Depreciation, amortization and accretion, net 1,279 1,536
Net (gains) losses on sales/disposals of:
Securities - (72)
Loans (606) (708)
Real estate, property and equipment (298) 36
Proceeds from sales of loans held for sale 46,171 57,140
Originations of loans held for sale (42,710) (57,651)
Change in assets/liabilities:
Decrease in interest receivable and other assets 577 538
(Decrease) increase in other liabilities (2,239) 809
--------- --------
Net cash provided by operating activities 7,345 7,067
--------- --------
Cash flows from investing activities:
Purchases of securities available for sale (86,762) (40,234)
Principal repayments on securities available for sale 6,494 32,566
Proceeds from maturities of securities available for sale 12,350 14,000
Proceeds from sales of securities available for sale - 66,660
Net decrease (increase) in loans held for investment 17,978 (11,051)
Net proceeds on sales of real estate owned 284 302
Additions to real estate owned (24) (83)
Purchases of Federal Home Loan Bank stock (2,500) (1,650)
Redemption of Federal Home Loan Bank stock 2,116 5,295
Proceeds from sale of property and equipment 326 70
Purchases of property and equipment (1,010) (1,126)
--------- --------
Net cash (used for) provided by investing activities (50,748) 64,749
--------- --------
Cash flows from financing activities:
Proceeds from exercise of stock options and warrants 138 150
Net decrease in deposits (19,171) (18,843)
Proceeds from Federal Home Loan Bank advances 83,000 556,000
Repayment of Federal Home Loan Bank advances (53,000) (633,000)
Repayments of other borrowings - (2,575)
Net increase in securities sold under agreement
to repurchase and federal funds purchased 1,842 2,539
Cash dividends paid (2,056) (1,424)
Common stock repurchase (373) (2,964)
Other, net 266 320
--------- --------
Net cash provided by (used for) financing activities 10,646 (99,797)
--------- --------
Decrease in cash and cash equivalents (32,757) (27,981)
Cash and cash equivalents, beginning of period 56,945 54,111
--------- --------
Cash and cash equivalents, end of period $ 24,188 $ 26,130
========= ========
Supplemental disclosures of cash flow information:
Cash paid during the period for interest $ 4,868 $ 7,359
Cash paid during the period for income taxes 2,347 2,085
Schedule of noncash investing and financing activities:
Real estate acquired in settlement of loans $ 302 $ 312
Loans to facilitate sale of real estate owned 281 470
<FN>
The notes to unaudited consolidated financial statements are an integral part of this statement.
</FN>
</TABLE>
5
<PAGE>
CENIT BANCORP, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
Note 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do not
include all of the disclosures and notes required by generally accepted
accounting principles. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. The results of operations for the three and nine month periods
ended September 30, 1999 and 1998 are not necessarily indicative of results that
may be expected for the entire year or any interim periods. Certain previously
reported amounts have been reclassified to agree with the current presentation.
The interim financial statements should be read in conjunction with the
December 31, 1998 consolidated financial statements of CENIT Bancorp, Inc. (the
"Company").
Note 2 - Per Share Data
Basic earnings per share is calculated using weighted average shares
outstanding. For the nine month period and three month period ended September
30, 1999, weighted average shares used to compute basic earnings per share were
4,578,034 and 4,592,926, respectively. For the nine months and three months
ended September 30, 1998, weighted average shares used to compute basic earnings
per share were 4,749,457 and 4,769,039, respectively.
Diluted earnings per share is calculated by adding common stock equivalents
to the weighted average shares outstanding. For the nine month period and three
month period ended September 30, 1999, weighted average shares used to compute
diluted earnings per share were 4,658,141 and 4,663,600, respectively. For the
nine months and three months ended September 30, 1998, weighted average shares
used to compute diluted earnings per share were 4,873,332 and 4,872,882,
respectively.
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
The Company's business currently consists of the business of its sole
subsidiary, CENIT Bank (the "Bank"). The principal business of the Bank consists
of attracting retail deposits from the general public in its market areas
through a variety of deposit products and investing these funds in commercial,
real estate and consumer loans. The Bank also invests in mortgage-backed
certificates, securities issued by the U.S. Treasury and U.S. Government
agencies, federal funds sold, Federal Home Loan Bank stock, and other
investments permitted by applicable laws and regulations.
Financial Condition Of The Company
Total Assets
At September 30, 1999, the Company had total assets of $652.8 million,
compared to $641.1 million at December 31, 1998.
Securities Available for Sale
Securities available for sale totaled $131.8 million at September 30, 1999
and are comprised of mortgage-backed certificates, U. S. Treasury and other U.
S. Government agency securities, and other debt securities. The net increase of
$66.7 million, or 102.5% from the December 31, 1998 balance of $65.1 million
resulted primarily from $86.8 million in purchases of available for sale
securities, partially offset by $12.4 million in proceeds from maturities, and
$6.5 million in principal repayments.
6
<PAGE>
In the third quarter of 1999, the Company purchased $51.8 million in
mortgage-backed securities. These securities consisted of $29.0 million of fixed
rate mortgage-backed securities with a weighted average maturity of eight years,
and $22.8 million of adjustable rate mortgage-backed securities with an average
interest rate reset of 28 months. The Company did not purchase any
mortgage-backed securities in the third quarter of 1998.
Loans
The balance of net loans held for investment decreased from $484.8 million
at December 31, 1998 to $466.1 million at September 30, 1999, a decrease of
$18.7 million or 3.9%. This decrease is primarily due to a decrease in
adjustable rate single-family mortgages of $29.8 million, offset by a $5.2
million increase in fixed rate single-family mortgages. The Company's core
banking loans (multi-family, commercial real estate, construction, land
acquisition and development, consumer lots, commercial business and consumer
loans) increased $5.8 million, or 2.4%, from December 31, 1998 to September 30,
1999. For the nine months ended September 30, 1999, loan originations totaled
$174.4 million and loan purchases totaled $24.2 million. Total principal
reductions totaled $222.8 million.
7
<PAGE>
The following table sets forth the composition of the Company's loans in
dollar amounts and as a percentage of the Company's total gross loans held for
investment at the dates indicated.
<TABLE>
<CAPTION>
September 30, 1999 December 31, 1998
------------------ -----------------
(Dollars in Thousands)
Amount Percent Amount Percent
------ ------- ------ -------
<S> <C> <C> <C> <C>
Real estate loans:
Residential permanent 1- to 4-family:
Adjustable rate $ 151,271 30.16% $ 181,104 34.63%
Fixed rate
Conventional 72,262 14.42 66,041 12.63
Guaranteed by VA or insured by FHA 2,973 .59 3,972 .76
---------- ----- ---------- -----
Total permanent 1- to 4-family 226,506 45.17 251,117 48.02
Residential permanent 5 or more family 8,737 1.74 7,874 1.51
---------- ----- ---------- -----
Total permanent residential loans 235,243 46.91 258,991 49.53
---------- ----- ---------- -----
Commercial real estate loans:
Hotels 10,483 2.09 9,208 1.76
Office and warehouse facilities 38,020 7.58 36,659 7.01
Retail facilities 23,118 4.61 22,823 4.37
Other 10,453 2.08 7,921 1.51
---------- ----- ---------- -----
Total commercial real estate loans 82,074 16.36 76,611 14.65
---------- ----- ---------- -----
Construction loans:
Residential 1- to 4-family 48,875 9.74 47,232 9.03
Residential 5 or more family 9,912 1.98 19,621 3.75
Nonresidential 1,720 .34 4,101 .79
---------- ----- ---------- -----
Total construction loans 60,507 12.06 70,954 13.57
---------- ----- ---------- -----
Land acquisition and development loans:
Consumer lots 3,598 .72 3,703 0.71
Acquisition and development 17,038 3.40 11,444 2.19
---------- ----- ---------- -----
Total land acquisition and development
loans 20,636 4.12 15,147 2.90
---------- ----- ---------- -----
Total real estate loans 398,460 79.45 421,703 80.65
---------- ----- ---------- -----
Consumer loans:
Boats 3,072 .61 4,275 .82
Home equity and second mortgage 56,082 11.18 52,845 10.11
Other 12,036 2.40 10,589 2.02
---------- ----- ---------- -----
Total consumer loans 71,190 14.19 67,709 12.95
---------- ----- ---------- -----
Commercial business loans 31,910 6.36 33,485 6.40
---------- ----- ---------- -----
Total loans 501,560 100.00% 522,897 100.00%
---------- ====== ---------- ======
Less:
Allowance for loan losses 3,882 4,024
Loans in process 32,957 35,463
Unearned discounts, premiums, and loan fees, net (1,419) (1,373)
---------- ----------
35,420 38,114
---------- ----------
Total loans, net $ 466,140 $ 484,783
========== ==========
</TABLE>
8
<PAGE>
The following table sets forth information about originations, purchases,
sales, and principal reductions for the Company's loans for the period
indicated.
Nine Months Ended
September 30, 1999
--------------------
(Dollars in Thousands)
Loans originated:
Real estate:
Permanent:
Residential 1- to 4-family $ 58,642
Residential 5 or more family 1,500
----------
Total 60,142
----------
Commercial real estate 15,827
----------
Construction:
Residential 1- to 4-family 15,054
Residential 5 or more family 1,218
Nonresidential 1,633
----------
Total 17,905
----------
Land acquisition:
Consumer lots 958
Acquisition and development 10,852
----------
Total 11,810
----------
Total real estate loans originated 105,684
----------
Consumer:
Home equity and second mortgage 28,015
Other 7,628
----------
Total 35,643
----------
Commercial business 33,065
----------
Total loans originated 174,392
Loans purchased 24,171
----------
Total loans originated and purchased 198,563
----------
Principal reductions:
Repayments and other principal reductions 178,672
Real estate loans sold 44,082
----------
Total principal reductions 222,754
----------
Net decrease in total loans $ (24,191)
==========
Net decrease in loans held for sale $ (2,855)
Net decrease in gross loans held for investment (21,336)
----------
$ (24,191)
==========
9
<PAGE>
Deposits
Total deposits decreased $19.2 million, or 3.9%, between September 30, 1999
and December 31, 1998. Noninterest-bearing and interest-bearing deposits
decreased $10.7 million and $8.5 million, respectively.
While the Company's overall noninterest-bearing deposits balance decreased
from $78.7 million at December 31, 1998 to $68.0 million at September 30, 1999,
its average balance increased for the three months and the nine months ended
September 30, 1999. The average noninterest-bearing deposits balance increased
$8.7 million to $66.8 million for the three months ended September 30, 1999 as
compared to the same period last year. The average noninterest- bearing deposits
balance for the first nine months of 1999 increased $11.7 million to $65.5
million as compared to the first nine months of 1998.
The $8.5 million decrease in interest-bearing deposits is primarily
attributed to customers seeking other investment alternatives offered in the
market as a result of current economic conditions.
Capital
The Company's and the Bank's capital ratios exceeded applicable regulatory
requirements at September 30, 1999.
In July 1999, the Board of Directors of the Company gave the Company's
management the discretion to initiate a repurchase of up to 150,000 of the
Company's shares. The Company is not obligated to conduct such a repurchase at
all, and the Company's decision to do so, as well as the timing of any
repurchase, will depend on a variety of factors. As of September 30, 1999, no
shares had been repurchased under this discretionary authority.
Asset Quality
Nonperforming Assets. Nonperforming assets consist of nonperforming loans,
real estate acquired in settlement of loans ("REO"), and other repossessed
assets. Generally the Company does not accrue interest on loans that are 90 days
or more past due, with the exception of certain VA-guaranteed or FHA insured
one- to four-family permanent mortgage loans, certain credit card loans, and
matured loans for which the borrowers are still making required monthly payments
of interest, or principal and interest, and with respect to which the Bank is
negotiating extensions or refinancings with the borrowers.
10
<PAGE>
The following table sets forth information about the Company's
nonperforming loans, REO, and other repossessed assets at the dates indicated.
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
(Dollars in Thousands)
<S> <C> <C>
Nonperforming loans:
Real estate loans:
Permanent residential 1- to 4-family
Nonaccrual $ 205 $ 359
Accruing loans 90 days or more past due 36 511
------ -------
Total 241 870
------ -------
Construction:
Accruing loans 90 days or more past due 369 -
------ -------
Land acquisition and development loans:
Accruing loans 90 days or more past due 48 -
------ -------
Consumer loans:
Nonaccrual:
Boats 12 37
Home equity and second mortgage 95 57
Other 52 46
Accruing 90 days or more past due - 2
------ -------
Total 159 142
------ -------
Commercial business loans:
Nonaccrual 31 64
------ -------
Total nonperforming loans:
Nonaccrual 395 563
Accruing loans 90 or more days past due 453 513
------ -------
Total 848 1,076
Real estate owned, net 200 377
Other repossessed assets, net - 21
------ -------
Total nonperforming assets, net $1,048 $ 1,474
====== =======
Total nonperforming assets, net, to total assets .16% .23%
====== =======
</TABLE>
11
<PAGE>
Allowance for Loan Losses. The following table sets forth activity of the
allowance for loan losses for the periods indicated.
Nine months ended September 30,
-------------------------------
1999 1998
---- ----
(Dollars in Thousands)
Balance at beginning of period $ 4,024 $ 3,783
Provision for loan losses 75 440
Losses charged to allowance (286) (340)
Recovery of prior losses 69 94
------- -------
Balance at end of period $ 3,882 $ 3,977
======= =======
The Company's provision for loan losses decreased to $75,000 for the nine
months ended September 30, 1999, as compared to $440,000 in the same period in
1998. The difference between the provision for loan losses and net loans
charged-off during the first nine months of 1999 relates primarily to loan types
in which the Bank is no longer active and for which provisions for loan losses
have previously been made. Management believes that these previous provisions
are adequate. At September 30, 1999, the Company's coverage ratio was 457.8%
based on a total allowance for loan losses of $3,882,000 and total nonperforming
loans of $848,000. This compares to a coverage ratio of 374.0% at December 31,
1998 and a coverage ratio of 454.5% at September 30, 1998.
Average Balance Sheets
The following tables set forth, for the periods indicated, information
regarding: (i) the total dollar amounts of interest income from interest-earning
assets and the resulting average yields; (ii) the total dollar amounts of
interest expense from interest-bearing liabilities and the resulting average
costs; (iii) net interest income; (iv) interest rate spread; (v) net interest
position; (vi) the net yield earned on interest-earning assets; and (vii) the
ratio of total interest-earning assets to total interest-bearing liabilities.
Average balances shown in the following tables have been calculated using daily
average balances.
12
<PAGE>
<TABLE>
<CAPTION>
For the Three Months For the Three Months
Ended Ended
September 30, 1999 September 30, 1998
---------------------------- ----------------------------
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------- -------- ----- ------- -------- -----
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans (1) $ 468,494 $ 8,857 7.56% $ 509,055 $ 10,115 7.95%
Mortgage-backed certificates 42,397 731 6.90 19,546 378 7.74
U.S. Treasury and other U.S.
Government agency securities 59,480 847 5.70 42,967 644 6.00
Federal funds sold 13,884 176 5.07 9,517 134 5.63
Federal Home Loan Bank and
Federal Reserve Bank stock 4,186 79 7.55 5,083 96 7.55
-------- ------ --------- ------
Total interest-earning assets 588,441 10,690 7.27 586,168 11,367 7.76
-------- ------ --------- ------
Noninterest-earning assets:
REO 298 595
Other 38,910 39,565
---------- ---------
Total noninterest-earning assets 39,208 40,160
---------- ---------
Total assets $ 627,649 $ 626,328
========== =========
Interest-bearing liabilities:
Passbook and statement savings $ 34,077 209 2.45% $ 38,059 314 3.30%
Checking accounts 41,938 147 1.40 35,363 158 1.79
Money market deposit accounts 75,718 660 3.49 66,312 649 3.91
Certificates of deposit 255,146 3,177 4.98 285,327 3,770 5.28
-------- ------ --------- ------
Total interest-bearing deposits 406,879 4,193 4.12 425,061 4,891 4.60
-------- ------ --------- ------
Advances from the Federal Home
Loan Bank 83,489 1,097 5.25 71,402 959 5.37
Securities sold under agreements
to repurchase 15,010 158 4.21 12,895 150 4.65
Other borrowings - - - 332 6 7.23
-------- ------ --------- ------
Total borrowings 98,499 1,255 5.10 84,629 1,115 5.27
-------- ------ --------- ------
Total interest-bearing liabilities 505,378 5,448 4.31 509,690 6,006 4.71
-------- ------ --------- ------
Noninterest-bearing liabilities:
Deposits 66,790 58,131
Other liabilities 4,671 6,782
---------- ---------
Total noninterest-bearing liabilities 71,461 64,913
---------- ---------
Total liabilities 576,839 574,603
---------- ---------
Stockholders' equity 50,810 51,725
---------- ---------
Total liabilities and stockholders' equity $ 627,649 $ 626,328
========== =========
Net interest income/interest rate spread $ 5,242 2.96% $ 5,361 3.05%
======= ==== ======== ====
Net interest position/net interest margin $ 83,063 3.56% $ 76,478 3.66%
========== ==== ========== ====
Ratio of average interest-earning assets to
average interest-bearing liabilities 116.44% 115.00%
========== =========
<FN>
(1) Includes nonaccrual loans and loans held for sale.
</FN>
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
For the Nine Months For the Nine Months
Ended Ended
September 30, 1999 September 30, 1998
----------------------------- ----------------------------
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------- -------- ------ ------- -------- ------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans (1) $ 485,138 $ 27,500 7.56% $ 511,506 $ 30,439 7.93%
Mortgage-backed certificates 23,726 1,263 7.10 57,035 2,884 6.74
U.S. Treasury and other U.S.
Government agency securities 56,350 2,425 5.74 44,463 2,011 6.03
Federal funds sold 15,274 552 4.82 11,714 486 5.53
Federal Home Loan Bank and
Federal Reserve Bank stock 4,357 244 7.47 7,756 428 7.36
-------- ------ -------- ------
Total interest-earning assets 584,845 31,984 7.29 632,474 36,248 7.64
-------- ------ -------- ------
Noninterest-earning assets:
REO 353 738
Other 38,064 42,112
-------- --------
Total noninterest-earning assets 38,417 42,850
-------- --------
Total assets $ 623,262 $ 675,324
======== ========
Interest-bearing liabilities:
Passbook and statement savings 35,041 640 2.44% $ 40,697 1,008 3.30%
Checking accounts 40,089 429 1.43 34,268 468 1.82
Money market deposit accounts 74,444 1,909 3.42 61,294 1,735 3.77
Certificates of deposit 256,543 9,582 4.98 299,194 11,777 5.25
-------- ------ -------- ------
Total interest-bearing deposits 406,117 12,560 4.12 435,453 14,988 4.59
-------- ------ -------- ------
Advances from the Federal Home
Loan Bank 80,110 3,107 5.17 115,938 4,739 5.45
Securities sold under agreements
to repurchase 16,177 484 3.99 11,355 393 4.61
Other borrowings - - - 1,348 77 7.62
-------- ------ -------- ------
Total borrowings 96,287 3,591 4.97 128,641 5,209 5.40
-------- ------ -------- ------
Total interest-bearing liabilities 502,404 16,151 4.29 564,094 20,197 4.77
-------- ------ -------- ------
Noninterest-bearing liabilities:
Deposits 65,530 53,786
Other liabilities 5,041 6,386
-------- --------
Total noninterest-bearing liabilities 70,571 60,172
-------- --------
Total liabilities 572,975 624,266
-------- --------
Stockholders' equity 50,287 51,058
-------- --------
Total liabilities and stockholders' equity $ 623,262 $ 675,324
======== ========
Net interest income/interest rate spread $ 15,833 3.00% $16,051 2.87%
======= ==== ======== ====
Net interest position/net interest margin $ 82,441 3.61% $ 68,380 3.38%
======== ==== ======== ====
Ratio of average interest-earning assets to
average interest-bearing liabilities 116.41% 112.12%
======== ========
<FN>
(1) Includes nonaccrual loans and loans held for sale.
</FN>
</TABLE>
14
<PAGE>
Comparison of Operating Results for the Three Months Ended September 30, 1999
and September 30, 1998.
General
The Company's pre-tax income remained substantially unchanged for the three
months ended September 30, 1999 as compared to the same period in 1998. A $119,
000 decrease in net interest income was offset by a $88,000 increase in other
income and a $61,000 decrease in the provision for loan losses.
Net Interest Income
The Company's net interest income before the provision for loan losses
decreased $119,000, or 2.2%, to $5.2 million for the quarter ended September 30,
1999 as compared to $5.4 million for the quarter ended September 30, 1998. A
$0.7 million decrease in interest income was partially offset by a $0.6 million
decrease in interest expense for the third quarter of 1999 as compared to the
same period in 1998.
Interest on loans decreased $1.2 million, or 11.9%, to $8.9 million for the
third quarter 1999 compared to $10.1 million for the same period in 1998. The
average loan balance for the third quarter of 1999 decreased $40.6 million, or
8.0%, to $468.5 million at September 30, 1999 compared to $509.1 million at
September 30, 1999. The yield on the loan portfolio for September 30, 1999 was
7.56% compared to 7.95%. Increased loan prepayments, caused primarily by the
declining market rates, primarily contributed to the lower average loan balances
and loan yields.
Interest on the Company's portfolio of mortgage-backed certificates
increased $353,000, or 93.4%, to $731,000 for the quarter ended September 30,
1999 from $378,000 for the comparable 1998 period. This increase was primarily
attributable to the purchase of $51.8 million in mortgage-backed securities in
the third quarter of 1999. The average balance of the portfolio increased from
$19.5 million in the third quarter of 1998 to $42.4 million in the third quarter
of 1999, an increase of 117.4%.
Interest on U.S. Treasury & other U.S. Government agency securities
(collectively, "investments") increased $203,000, or 31.5%, in the third quarter
of 1999 compared to the same quarter in 1998. This increase was primarily due to
a $16.5 million, or 38.4%, increase in the average balance of investments from
$43.0 million at September 30, 1998 to $59.5 million at September 30, 1999.
Interest on deposits decreased $698,000, or 14.3%, for the quarter ended
September 30, 1999 compared to the quarter ended September 30,1998. The decrease
was attributable to both a decrease in the average balance of interest-bearing
deposits, as well as a decrease in the average cost of these deposits. The
average balance of interest-bearing deposits and the average cost of these
deposits were $406.9 million and 4.12%, respectively, for the third quarter of
1999 as compared to $425.1 million and 4.60%, respectively, for the third
quarter of 1998.
Provision for Loan Losses
The Company's provision for loan losses decreased $61,000 to $39,000 for
the three months ended September 30, 1999 as compared to $100,000 for the same
period in 1998. Net loans charged off during the three months ended September
30, 1999 were $46,000 compared to $30,000 for the comparable 1998 period. The
difference between the provision for loan losses and net loans charged off
during the third quarter of 1999 relates primarily to loan types in which the
Bank is no longer active and for which provisions for loan losses have
previously been made. Management believes that these previous provisions are
adequate.
Other Income
Total other income increased by $88,000 for the third quarter of 1999
compared to the same period in 1998. The increase is primarily the result of a
$163,000 increase in other income and a $98,000 increase in merchant processing
fees, partially offset by a $144,000 decrease in gains on sales of loans and
securities. The increase in other income resulted primarily from the sale of a
land parcel held by the Company. The increase in merchant processing fees and
the decrease in gains on sales of loans and securities were volume generated
changes.
15
<PAGE>
Other Expenses
Total other expense remained substantially the same for the third quarter
of 1999 compared to the third quarter of 1998. Increases in net occupancy
expense and equipment and data processing expense were offset by a decrease in
salaries and employee benefits.
Comparison of Operating Results for the Nine Months Ended September 30, 1999 and
September 30, 1998.
General
The Company's pre-tax income decreased $0.1 million, or 1.4%, to $7.0
million for the nine months ended September 30, 1999 as compared to $7.1 million
for the nine months ended September 30, 1998. A $560,000 increase in other
expense was partially offset by a $147,000 increase in net interest income after
the provision for loan losses and a $309,000 increase in other income.
Net Interest Income
The Company's net interest income before provision for loan losses
decreased $0.2 million, or 1.4%, to $15.8 million for the nine months ended
September 30, 1999. A $4.3 million decrease in interest income was partially
offset by a $4.1 million decrease in interest expense for the first nine months
of 1999 as compared to the same period in 1998. Increased loan prepayments,
caused primarily by declining market rates, contributed to decreased interest
income on loans and loan yields. In addition, management used the proceeds from
the sale, maturity and principal repayment of certain securities, primarily
lower-yielding mortgage-backed certificates, to reduce advances from the Federal
Home Loan Bank ("FHLB") rather than seek alternative investment opportunities.
This strategy reduced both interest earning assets and interest bearing
liabilities during the first nine months of 1999 compared to the first nine
months of 1998. Total interest-earning assets decreased to an average balance of
$584.8 million at September 30, 1999 from $632.5 million at September 30, 1998,
while total interest-bearing liabilities decreased to $502.4 million at
September 30, 1999 from $564.1 million at September 30, 1998. Average
noninterest-bearing deposits increased $11.7 million from September 30, 1998 to
September 30, 1999 which also had a favorable impact on net interest margin. The
Company's net interest margin increased to 3.61% for the nine months ended
September 30, 1999 from 3.38% for the nine months ended September 30, 1998.
Interest on loans decreased $2.9 million, or 9.5%, to $27.5 million for the
nine months ended September 30, 1999 compared to $30.4 million the same period
in 1998. This decrease was attributable to both decreases in average balances,
as well as a decrease in the loan portfolio yield associated with the declining
market rates in 1998. The average loan balance for the first nine months of 1999
decreased $26.4 million, or 5.2%, to $485.1 million compared to $511.5 million
for the first nine months of 1998. The yield on the loan portfolio was 7.56% for
the nine months ended September 30, 1999 compared to 7.93% for the same period
in 1998, a decrease of 4.7%.
Interest on the Company's portfolio of mortgage-backed certificates
decreased $1.6 million , or 55.2%, to $1.3 million for the nine months ended
September 30, 1999 from $2.9 million for the comparable 1999 period. The
decrease was attributable to a $33.3 million decrease in the average balance of
the portfolio during the first nine months of 1999 compared to the first nine
months of 1998. The decrease in the portfolio average balance was attributable
to the sales and prepayments of mortgage-backed securities as a result of the
interest rate declines in 1998, partially offset by a substantial purchase of
mortgage-backed securities in the third quarter of 1999.
Interest on deposits decreased by $2.4 million, or 16.0%, for first nine
months of 1999 compared to the first nine months of 1998. The decrease was
attributable to both a decrease in the average balance of interest-bearing
deposits as well as a decrease in the average cost of these deposits. The
average balance of interest-bearing deposits and the average cost of these
deposits were $406.1 million and 4.12% respectively, for the first nine months
of 1999 as compared to $435.5 and 4.59%, respectively, for the first nine months
of 1998.
Interest on borrowings decreased $1.6 million, or 30.8%, for the nine
months ended September 30, 1999 compared to the same period in 1998. This
decrease was substantially due to a $35.8 million decrease in the average
balance of FHLB advances for the first nine of 1999 compared to the first nine
months of 1998. The decline in the average balance
16
<PAGE>
was primarily associated with the use of proceeds from the sale of
mortgage-backed certificates to significantly reduce the balance of FHLB
advances in 1998.
Provision for Loan Losses
The Company's provision for loan losses decreased $365,000 to $75,000 for
the nine months ended September 30, 1999 as compared to $440,000 for the same
period in 1998. Net loans charged off during the nine months ended September 30,
1999 were $217,000 compared to $246,000 for the comparable 1998 period. The
difference between the provision for loan losses and net loans charged off
during the first nine months of 1999 relates primarily to loan types in which
the Bank is no longer active and for which provisions for loan losses have
previously been made. Management believes that these previous provisions are
adequate.
Other Income
Total other income increased $309,000, or 5.9%, for the nine months ended
September 30,1999 as compared to the same period in 1998. The increase was
primarily attributable to a $285,000 increase in other income. This increase
resulted primarily from a $152,000 recognition of gain from the sale of a land
parcel held by the Company and a $135,000 recognition of the deferred gain from
the sale of the Company's headquarters building. Volume related increases in
merchant processing fees and deposit fees were offset by volume related
decreases in commercial mortgage brokerage fees and gains on sales of loans and
securities.
Other Expenses
Total other expenses increased $560,000, or 4.1%, from the first nine
months of 1999 compared to the first nine months of the previous year. The
increase is primarily the result of a $276,000 increase in salaries and employee
benefits, a $186,000 increase in merchant processing expense and a $172,000
increase in net occupancy expense. The increase in salaries and employee
benefits is partially attributed to the implementation of the Company's core
banking initiatives, which required additional lenders and retail bankers, as
well as salary increases. The increase in net occupancy expense is primarily
attributable to increased rent expense subsequent to the sale of the Company's
headquarters building. The increase in the merchant processing expense is
primarily volume generated.
Liquidity
The principal sources of funds for the Company for the nine months ended
September 30, 1999 included $46.2 million in proceeds from the sale of loans,
$18.8 million in proceeds from principal repayments and maturities of securities
available for sale, a $18.0 million decrease in loans held for investment, and a
$2.1 million redemption of Federal Home Loan Bank stock. Funds were used
primarily to fund purchases of securities available for sale of $86.8 million,
to originate loans held for sale of $42.7 million, as well as to compensate for
a $19.2 million decrease in deposits.
The Company's liquidity could be impacted by a decrease in the renewals of
deposits or general deposit runoff. However, the Company has the ability to
raise deposits by conducting deposit promotions. In the event the Company
requires funds beyond its ability to generate them internally, the Company could
obtain additional advances from the FHLB. The Company could also obtain funds
through the sale of investment securities from its available for sale portfolio.
All savings institutions, including the Bank, are required to maintain an
average daily balance of liquid assets equal to a certain percentage of the sum
of its average daily balance of net withdrawable deposit accounts and borrowings
payable in one year or less. The liquidity requirement may vary from time to
time (between 4% and 10%) depending upon economic conditions and savings flows
of all savings institutions. At September 30, 1999 and December 31, 1998, the
required liquid asset ratio was 4.0%. The Bank's liquid asset ratio exceeded
regulatory requirements at September 30, 1999 and December 31, 1998.
17
<PAGE>
Impact of the Year 2000 Issue
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. As a result, such
computer programs will not recognize the correct date after December 31, 1999.
Also, systems and equipment that are not typically thought of as "computer
related" (referred to as "non-IT") contain imbedded hardware or software that
may have a time element.
In 1997, the Company implemented a four phase project of inventory,
assessment, renovation and testing/implementation to address the Year 2000
Issue. The scope of the project included: determining the compliance of all
applications, operating systems and hardware on the mainframe, PC and LAN
systems; addressing issues related to non-IT embedded software and equipment;
and addressing the compliance of the Company's significant borrowers and third
party providers.
All four phases of the Company's Year 2000 project have been substantially
completed within the guidelines and timeframes set forth by the Federal
Financial Institution Examination Council. The Company will conduct additional
testing throughout the remainder of the year. The Company also completed its
Year 2000 Contingency Plan, designed to address situations including power
shortages, telephone communications failure and our customers' potential Year
2000 problems. This plan also contains two stand-alone plans to address the
Company's expected year-end cash requirements and an event plan to monitor
specific operations prior to and during the century rollover date. Successful
contingency planning is an ongoing process, and the plans will be revised from
time to time during the remainder of 1999 as events warrant.
The Company has determined, based primarily on communications with vendors,
that substantially all of the Company's non-IT related systems and equipment are
Year 2000 compliant. Testing of critical systems that the Company determined
needed to be conducted and compilation of written documentation regarding
compliance were substantially completed at the end of the first quarter of 1999.
The potential impact of Year 2000 will depend not only on the corrective
measures the Company undertook but also on other entities that provide data to
or receive data from the Company and on those whose operational capability or
financial conditions are important to the Company. The Company has received
assurances from all major third party vendors that they are in compliance. In
addition, management has reviewed significant lending and deposit relationships
and consulted with these customers as to their Year 2000 readiness. The plans of
such parties are being monitored and the Company is prepared to deal with any
fundamental impact on the Company.
The Company has established an internal review process to evaluate its Year
2000 testing results. Monthly progress reports are made to the Company's senior
management and Board of Directors. The Company's Customer Awareness Program,
established earlier this year, informs customers of Year 2000 issues and
provides status reports as to the Bank's Year 2000 efforts.
The Company estimates, based on current projections of allocations of
existing resources and known direct costs, that total costs related to the Year
2000 project from 1997 to 2000 will be approximately $1,100,000. The Company
estimates that approximately 81% of these costs will be related to the
redeployment of existing personnel to address Year 2000 Issues, while
approximately 19% of these costs will represent incremental expenses to the
Company since inception of the Year 2000 project. Since inception, the Company
has incurred approximately $885,000 of costs related to its Year 2000 project,
of which approximately $104,000 represents incremental expenses primarily for
software upgrades and outside consultant fees. Of the $885,000 of Year 2000
project costs incurred since inception, approximately $160,000, $340,000 and
$385,000 were incurred in 1997, 1998 and the first nine months of 1999,
respectively. The remaining estimated costs to complete the project include
additional testing, monitoring and contingency activities during the remainder
of 1999 and into the year 2000. Some computer-related initiatives have been
delayed due to the allocation of resources towards Year 2000 issues. Management
believes these delays have not had an adverse impact on the Company's financial
condition or day to day operations.
18
<PAGE>
Based on the results of the Company's testing program, it is the Company's
opinion that its critical systems are Year 2000 compliant. In the unlikely event
that a critical system does not perform as expected or if there is
non-compliance by a major third party provider, the above mentioned contingency
plan would be invoked. This plan is intended to guide the Company in responding
to possible failure of critical systems.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Information contained in the above discussion titled, "Management's
Discussion and Analysis of Financial Condition and Results of Operations," other
than historical information, may contain forward-looking statements that involve
risks and uncertainties including, but not limited to, the Company's and its
major vendors' and customers' Year 2000 readiness, and the estimated costs
related to Year 2000 issues. These statements are made pursuant to the safe
harbor provisions of the Private Litigation Reform Act of 1995, and are provided
to assist the reader in understanding anticipated future financial and
operational results. Although the Company believes that the assumptions
underlying the forward- looking statements contained herein are reasonable, any
of these assumptions could ultimately prove to be inaccurate. The Company's
actual results may differ materially from those projected in forward-looking
statements, particularly if market conditions or other factors prevent the
Company from achieving or sustaining the increases in loan production of fee
income that are the basis of many of the Company's assumptions.
Item 3 - Quantitative and Qualitative Disclosure About Market Risk
Market Risk Management
The Company's primary market risk exposure is interest rate risk.
Fluctuations in interest rates will impact both the level of interest income and
interest expense and the market value of the Company's interest-earning assets
and interest-bearing liabilities. There were no material changes in the
Company's market risk management strategy, as stated in the Company's 1998
annual report, during the first nine months of 1999.
19
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings - Inapplicable
Item 2 - Changes in Securities - Inapplicable
Item 3 - Defaults Upon Senior Securities - Inapplicable
Item 4 - Submission of Matters to a Vote of Security Holders - None
Item 5 - Other Information - None
Item 6 - Exhibits and Reports on Form 8-K - None
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.
CENIT BANCORP, INC.
DATE: November 9, 1999 /S/Michael S. Ives
Michael S. Ives
President and Chief Executive Officer
DATE: November 9, 1999 /S/ John O. Guthrie
John O. Guthrie
Senior Vice President and
Chief Financial Officer
20
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> SEP-30-1999
<CASH> 19,377
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 4,811
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 131,814
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 471,022
<ALLOWANCE> 3,882
<TOTAL-ASSETS> 652,790
<DEPOSITS> 477,601
<SHORT-TERM> 104,926
<LIABILITIES-OTHER> 4,105
<LONG-TERM> 15,000
0
0
<COMMON> 48
<OTHER-SE> 51,110
<TOTAL-LIABILITIES-AND-EQUITY> 652,790
<INTEREST-LOAN> 27,500
<INTEREST-INVEST> 3,688
<INTEREST-OTHER> 796
<INTEREST-TOTAL> 31,984
<INTEREST-DEPOSIT> 12,560
<INTEREST-EXPENSE> 16,151
<INTEREST-INCOME-NET> 15,833
<LOAN-LOSSES> 75
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 14,265
<INCOME-PRETAX> 7,039
<INCOME-PRE-EXTRAORDINARY> 4,505
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,505
<EPS-BASIC> .98
<EPS-DILUTED> .97
<YIELD-ACTUAL> 3.61
<LOANS-NON> 395
<LOANS-PAST> 453
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4,024
<CHARGE-OFFS> 286
<RECOVERIES> 69
<ALLOWANCE-CLOSE> 3,882
<ALLOWANCE-DOMESTIC> 3,882
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
