<PAGE>
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 the quarter ended: June 30, 1996 Commission file number: 33-42286
HENDERSON CITIZENS BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 6712 75-2371232
- ---------------------------- ------------------------- -------------------
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification No.)
organization) Code Number)
201 WEST MAIN STREET, P.O. BOX 1009
HENDERSON, TEXAS 75653
(903) 657-8521
(Address, including ZIP code, and telephone number, including
area code, of registrant's principal executive offices)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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.
X Yes No
------- -------
At June 30, 1996, 2,160,000 shares of Common Stock, $5.00 par value, were
outstanding.
1
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
HENDERSON CITIZENS BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(unaudited)
June 30, 1996 and December 31, 1995
(dollars in thousands)
<TABLE>
<CAPTION>
Assets 1996 1995
------ ------ ------
<S> <C> <C>
Cash and due from banks $ 8,914 8,916
Interest-bearing deposits with
financial institutions 3,353 2,642
Securities:
Held-to-maturity, approximate
market value of $82,148 82,836 82,750
in 1996 and $83,570 in 1995
Available-for-sale 129,250 143,700
--------- --------
212,086 226,450
Loans, net 86,939 80,499
Premises and equipment, net 3,212 3,144
Accrued interest receivable 3,230 3,911
Other assets 1,992 1,317
--------- --------
$ 319,726 326,879
========= ========
Liabilities and Stockholders' Equity
------------------------------------
Deposits:
Demand - non interest-bearing 28,229 28,435
NOW accounts 66,504 68,089
Money market and savings 42,502 46,206
Certificates of deposit and other 149,651 150,881
time deposits
--------- --------
Total deposits 286,886 293,611
--------- --------
Accrued interest payable 1,055 1,117
Other liabilities 766 945
--------- --------
288,707 295,673
Stockholders' equity:
Preferred stock, $5 par value;
2,000,000 shares authorized,
none issued or outstanding -- --
Common stock, $5 par value;
10,000,000 shares authorized,
2,160,000 issued and outstanding 10,800 10,800
Capital surplus 5,400 5,400
Undivided profits 16,073 14,859
Net unrealized gains (losses) on
securities available
for sale, net of income taxes (1,254) 147
--------- --------
Total stockholders' equity 31,019 31,206
Commitments and contingencies
--------- --------
$ 319,726 326,879
========= ========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
HENDERSON CITIZENS BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(unaudited)
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months Six months
ended June 30 ended June 30
-------------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest Income:
Loans 1,756 1,551 3,400 2,946
Securities
Taxable 2,775 3,002 5,585 5,993
Tax-exempt 389 366 780 733
Federal funds sold 17 46 71 75
Interest-bearing deposits with other
financial institutions 49 130 167 290
------ ------ ------ ------
Total interest income 4,986 5,095 10,003 10,037
------ ------ ------ ------
Interest expense:
Deposits:
NOW accounts 476 528 1,007 1,083
Money market and savings 316 365 646 761
Certificates of deposit and other time deposits 1,899 2,018 3,845 3,828
------ ------ ------ ------
Total interest expense 2,691 2,911 5,498 5,672
------ ------ ------ ------
Net interest income 2,295 2,184 4,505 4,365
Provision for loan losses 70 30 120 93
Net interest income after provision for ------ ------ ------ ------
loan losses 2,225 2,154 4,385 4,272
------ ------ ------ ------
Other income:
Gains (losses) on securities transactions, net 123 -- 763 (199)
Income from fiduciary activities 154 141 318 276
Service charges, commissions, and fees 331 353 649 705
Other 92 10 191 63
------ ------ ------ ------
Total other income 700 504 1,921 845
------ ------ ------ ------
Other expenses:
Salaries and employee benefits 1,182 1,133 2,245 2,015
Occupancy and equipment 212 204 418 388
Regulatory assessments 46 168 86 336
Other 504 525 994 1,008
Total other expenses 1,944 2,030 3,743 3,747
------ ------ ------ ------
Income before income taxes 981 628 2,563 1,370
Income tax expense 230 115 658 261
------ ------ ------ ------
Net income 751 513 1,905 1,109
====== ====== ====== ======
Net income per common share (2,160,000
shares outstanding) 0.35 0.23 0.88 0.51
====== ====== ====== ======
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
HENDERSON CITIZENS BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
(unaudited)
Six months ended June 30, 1996 and 1995
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Net Unrealized
Gains (Losses)
on Securities Total
Preferred Common Capital Undivided Available Stockholder's
Stock Stock Surplus Profits for Sale Equity
----------- -------- --------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1994 $ -- 10,800 5,400 13,777 (3,830) 26,147
Net income -- -- -- 1,109 -- 1,109
Net change in unrealized gains
(losses) on securities available
for sale -- -- -- -- 3,271 3,271
Cash dividends ($.32 per share) -- -- -- (691) -- (691)
------- ------ ----- ------ ----- ------
Balances at June 30, 1995 $ -- 10,800 5,400 14,195 (559) 29,836
======= ====== ===== ====== ===== ======
Balances at December 31, 1995 $ -- 10,800 5,400 14,859 147 31,206
Net income -- -- -- 1,905 -- 1,905
Net change in unrealized gains
(losses) on securities available
for sale -- -- -- -- (1,401) (1,401)
Cash dividends ($.32 per share) -- -- -- (691) -- (691)
------- ------ ----- ------ ----- ------
Balances at June 30, 1996 $ -- 10,800 5,400 16,073 (1,254) 31,019
======= ====== ===== ====== ===== ======
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
HENDERSON CITIZENS BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statement of Cash Flows
(unaudited)
Six months ended June 30, 1996 and 1995
(dollars in thousands)
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Operating activities:
Net income $ 1,905 1,109
Adjustments to reconcile net income to net cash
provided by operating activities:
Net amortization (accretion) of premium (discount) on securities 334 (195)
Provision for loan losses 120 93
Net (gains) losses on securities transactions (763) 199
Depreciation and amortization 225 208
(Increase) decrease in accrued interest receivable 681 (136)
Decrease (increase) in other assets (8) 12
Increase (decrease) in accrued interest payable (62) 208
Increase (decrease) in other liabilities (179) 64
------- -------
Net cash provided by operating activities 2,253 1,562
------- -------
Investing activities:
Proceeds from maturities and paydowns of held-to-maturity securities 4,469 16,359
Purchases of held-to-maturity securities (4,787) (16,784)
Proceeds from sales of available-for-sale securities 40,662 8,562
Proceeds from maturities and paydowns of available-for-sale securities 16,848 13,578
Purchases of available-for-sale securities (44,521) (15,766)
Net increase in loans (6,560) (7,663)
Purchases of bank premises and equipment (239) (103)
------- -------
Net cash provided by (used in) investing activities 5,872 (1,817)
------- -------
Financing activities:
Net increase (decrease) in deposits (6,725) 1,992
Cash dividends paid (691) (691)
------- -------
Net cash provided by (used in) financing activities (7,416) 1,301
------- -------
Increase in cash and cash equivalents 709 1,046
Cash and cash equivalents at beginning of period 11,558 14,349
------- -------
Cash and cash equivalents at end of period $ 12,267 15,395
--------- -------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES
Income taxes paid, net of refunds $ 555 --
--------- -------
Interest paid, net of amounts capitalized $ 5,560 5,464
--------- -------
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
HENDERSON CITIZENS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1996
(1) BASIS OF PRESENTATION
---------------------
The accompanying consolidated financial statements are unaudited, but
include all adjustments, consisting of normal recurring accruals, which
management considers necessary for a fair presentation of the financial
position, results of operations, and cash flows.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to Securities and
Exchange Commission rules and regulations. The consolidated financial
statements and footnotes included herein should be read in conjunction
with the Company's annual consolidated financial statements as of
December 31, 1995 and 1994, and for each of the three years in the
period ended December 31, 1995 included in the Companys Form 10-K.
(2) SECURITIES
----------
The amortized cost (carrying value) and approximate market values of
securities held-to-maturity at June 30, 1996, are summarized as follows
(in thousands of dollars) :
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- -------
<S> <C> <C> <C> <C>
U.S. Treasury $ 7,074 56 (161) 6,969
U.S. Government agencies 18,276 47 (178) 18,145
State and municipal 31,665 178 (267) 31,576
Mortgage-backed securities
and collateralized mortgage
obligations 23,296 4 (390) 22,910
Other securities 2,525 23 -- 2,548
-------- ------- ------- --------
$ 82,836 308 (996) 82,148
======== ======= ======= ========
The amortized cost and approximate market values (carrying value) of securities
available-for-sale at June 30, 1996, are summarized as follows (in
thousands of dollars):
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- -------
U.S. Treasury $ 48,101 84 (578) 47,607
U.S. Government agencies 15,114 4 (260) 14,858
Other securities 1,361 -- (1) 1,360
Mortgage-backed securities
and collateralized mortgage
obligations 66,574 139 (1,288) 65,425
-------- ------- ------- --------
$131,150 227 (2,127) 129,250
======== ======= ======= ========
</TABLE>
6
<PAGE>
HENDERSON CITIZENS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1996
(3) LOANS AND ALLOWANCE FOR LOAN LOSSES
-----------------------------------
The composition of the Company's loan portfolio is as follows (in thousands
of dollars):
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- ------------
<S> <C> <C>
Commercial and industrial $ 20,971 22,444
Real estate mortgage 37,933 34,009
Installment and other 30,363 26,234
-------- --------
Total 89,267 82,687
Less:
Allowance for loan losses (1,121) (1,019)
Unearned discount (1,207) (1,169)
-------- --------
Loans, net $ 86,939 80,499
======== ========
Changes in the allowance for loan losses for the six months ended June
30, 1996 and 1995 are summarized as follows (in thousands of dollars):
1996 1995
----------- ------------
Balance, January 1 $ 1,019 997
Provision charged to operating expense 120 93
Loans charged off (57) (105)
Recoveries on loans 39 37
--------- --------
Balance, June 30 $ 1,121 1,022
========= ========
</TABLE>
7
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF HENDERSON CITIZENS BANCSHARES, INC.
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
The following discussion and analysis of the financial condition and results of
operations of the Company should be read in conjunction with the financial
statements and the notes thereto, and other financial and statistical
information appearing elsewhere in this report.
RESULTS OF OPERATIONS
- ---------------------
Net income for the first six months of 1996 was $1,905,000 compared to
$1,109,000 for the same period in 1995. The Company experienced gains on
securities transactions totaling approximately $763,000 in the first six months
of 1996 from the sale of certain available-for-sale U.S. Treasury securities.
In the first six months of 1995, the Company had net securities losses of
approximately $199,000. Net interest income for the first six months of 1996
has improved over the same period in 1995 due to improving margins related to
increased loan demand, and change in deposit mix and slightly lower interest
rates on deposit accounts. Increased interest income from loans was offset by
decreased interest income on taxable securities due to the sale of certain U.S.
Treasury securities in 1996 in which a gain was recognized and the proceeds were
reinvested at lower rates. With the increase in loan demand, the Company made a
provision of $120,000 to the allowance for loan losses during the first six
months of 1996. A provision of $93,000 was made for loan losses during the same
period in 1995. Other income, excluding gains on securities transactions, for
the first six months of 1996 was $1,158,000 compared to $1,044,000 for the same
period in 1995. Total other expenses for the first six months of 1996 were
virtually the same amount compared to the first six months in 1995. Income tax
expense for the first six months of 1996 was $658,000 compared to $261,000 for
the same period in 1995.
NET INTEREST INCOME
- -------------------
For the six months ended June 30, 1996, net interest income was $4,505,000
compared to $4,365,000 for the first six months of 1995. Interest income from
loans has increased due to volume increases. This increase has been offset
somewhat by a decrease in interest income from taxable investments due to the
sale of certain taxable securities. Interest expense for the first six months
of 1996 was $174,000 less than the first six months of 1995 due to change in
deposit mix from higher yielding deposits to lower yielding deposits and
slightly lower interest rates due to repricing of certificates of deposit.
Net interest income for the three month period ended June 30, 1996 was
$2,295,000 compared to $2,184,000 in 1995. The increase is likewise the result
of improved loan demand and a decrease in interest income from taxable
investments due to the sale of certain taxable securities with the overall
decrease in total interest income offset by a large decrease in total interest
expense caused by volume decreases, changes in deposit mix, and slightly lower
interest rates due to repricing of certificates of deposit.
PROVISION FOR LOAN LOSSES
- -------------------------
For the six months ended June 30, 1996, the Company increased its allowance for
loan losses through a provision of $120,000 compared to the six months ended
June 30, 1995 in which the Company had a provision for loan losses of $93,000.
The Company experienced net charge offs of $18,000 in the first six months of
1996 compared to net charge offs of $68,000 in the same period 1995.
During the three months ended June 30, 1996, the Company increased its allowance
for loan losses through a provision of $70,000. The Company increased its
allowance for loan losses during the same period in 1995 by $30,000.
See additional information related to the Companys loan operations in the
Allowance for Loan Losses section below.
8
<PAGE>
OTHER INCOME AND EXPENSES
- -------------------------
Non-interest income, excluding securities losses was $1,158,000 for the first
six months of 1996 as compared to $1,044,000 in the first six months of 1995.
This increase is due to increases in fiduciary income and other fees. Net gains
on securities transactions for the first six months of 1996 was $763,000
compared to a loss of $199,000 for the same period in 1995. The gain in 1996
was the result of the sale of certain taxable available-for-sale securities
consistent with the Companys portfolio management policy. Other expenses for the
six month period ended June 30, 1996 were $3,743,000 compared to $3,747,000
during the same period in 1995. The Company experienced general salary and
benefit increases offset by decreased regulatory assessments.
Non-interest income, excluding securities losses, was approximately $73,000 more
for the three months ended June 30, 1996 compared to the three months ended June
30, 1995. The increase is due likewise to increase in fiduciary income and
other fee income. Gains on securities transactions was $123,000 for the three
months ended June 30, 1996 compared to no gains or losses for the three months
ended June 30, 1995. Other expenses for the three months June 30, 1996 were
slightly less than the three months ended June 30, 1995. The decrease is
likewise related to increased salary and benefit increases offset by decreased
regulatory assessments.
INCOME TAXES
- ------------
Income tax expense for the first six months of 1996 was $658,000, compared to
$261,000 in the same period in 1995. The effective tax rate for the first six
months of 1996 and 1995, respectively, was 25.7% and 19.1%. The increase in 1996
in the effective rate was due to the large gain on securities transactions and
its effect on tax exempt income as a percent of income. The effective tax rate
is expected to decrease over the remainder of 1996 due to the effect of tax
exempt income from municipal securities.
Income tax expense for the three months ended June 30, 1996 and June 30, 1995
respectively, were $230,000 and $115,000.
FINANCIAL CONDITION
- -------------------
The Company's total assets at June 30, 1996 totaled $319,726,000, a decrease of
$7,153,000 compared to the total assets at December 31, 1995 of $326,879,000.
Total deposits were $286,886,000 at June 30, 1996, compared to the December 31,
1995 total of $293,611,000.
Equity capital of the Company, excluding unrealized gains or losses on
securities available for sale, as a percentage of total assets was 10.09% at
June 30, 1996 compared to 9.5% at December 31, 1995. The risk-based Tier I and
Tier II capital ratios and the leverage ratio of the Company amounted to 24.2%,
25.1% , and 9.9% respectively at June 30, 1996 compared to 24.3%, 25.1%, and
9.5% respectively, at December 31, 1995.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
At June 30, 1996, cash and cash equivalents for the Company of $12,267,000
increased from the December 31, 1995 amount of $11,558,000. At June 30, 1996,
the market value of the Companys available-for-sale securities had declined
from the December 31, 1995 market values due to increases in bond interest
rates.
The Company's stockholders' equity of $31,019,000 remains at a level considered
to be adequate by management. Profits in excess of dividends paid to
shareholders is reflected in the increase in undivided profits from 1995. The
net change in unrealized losses of the Companys available-for-sale securities
totaling $1,401,000 has had a negative impact on the Companys stockholders
equity since December 31, 1995 due to a increase in bond interest rates
experienced in the first six months of 1996.
ALLOWANCE FOR LOAN LOSSES
- -------------------------
The allowance for loan losses at June 30, 1996 and December 31,1995 was 1.26%
and 1.23% of outstanding loans, respectively. By its nature, the process
through which management determines the appropriate level of the allowance
requires considerable judgment. The determination of the necessary allowance,
and correspondingly the provision for loan losses, involves assumptions about
projections of national and local economic conditions, the composition of the
loan portfolio, and prior loss experience, in addition to other considerations.
As a result, no assurance can be given that future losses will not vary from the
current estimates. However, management believes that the allowance at June 30,
1996 is adequate to cover losses inherent in its loan portfolio. A migration
analysis and an internal classification system for loans also helps identify
potential problems, if any loans that are not identified otherwise. From these
analyses,
9
<PAGE>
management determines which loans are potential candidates for nonaccrual
status, including impaired loan status, or charge-off. Management continually
reviews loans and classifies them consistent with the Comptrollers guidelines to
help ensure that an adequate allowance is maintained.
The allocation of the allowance for loan losses is based upon the inherent risks
in the various components of the loan portfolio. Amounts allocated to each
component are determined based on managements evaluations of concentrations of
credit risks, current and anticipated economic conditions, historical analyses,
and classification and estimated loss exposure assigned to specific credits.
These reserve allocations are subject to change as various economic conditions
dictate. The following table is an analysis of the Allowance for Loan Losses.
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
1996 1995
(Dollars in (Dollars in
Thousands) Thousands)
------------- -------------
<S> <C> <C>
Balance at beginning of period $ 1,019 997
Charge-offs:
Commercial, financial, and agricultural 10 28
Installment loans to individuals 47 77
------- -------
57 105
Recoveries:
Commercial, financial, and agricultural 20 5
Installment loans to individuals 19 32
------- -------
39 37
Net charge-offs 18 68
------- -------
Additions charged to operations 120 93
------- -------
Balance at end of period $ 1,121 1,022
======= =======
Ratio of net charge-offs during
the period to average loans outstanding
during the period .01% .04%
======= =======
</TABLE>
NON ACCRUAL, PAST DUE AND RESTRUCTURED LOANS
- --------------------------------------------
The Companys policy is to discontinue the accrual of interest income on loans
whenever it is determined that reasonable doubt exists with respect to timely
collectibility of interest and principal. Loans are placed on nonaccrual status
if either material deterioration occurs in the financial position of the
borrower, payment in full of interest or principal is not anticipated, payment
in full of interest or principal is past due 90 days or more unless well
secured, payment in full of interest or principal on a loan is past due 180 days
or more, regardless of collateral, or the loan in whole or in part is classified
as doubtful. A loan may remain on accrual status if it is in the process of
collection and is either guaranteed or well-secured. When a loan is placed on
nonaccrual status, interest is no longer accrued or included in interest income
and previously accrued income is reversed.
As of June 30, 1996, the Company had $92,000 in nonaccrual loans compared to
$177,000 as of the same period in 1995. The total of accruing loans which are
contractually past due 90 days or more as to principal or interest at June 30,
1996 is $67,000 compared to $26,000 as of June 30, 1995.
10
<PAGE>
The following is a summary of the Companys problem loans as of June 30, 1996 and
1995.
<TABLE>
<CAPTION>
At June 30,
1996 1995
--------- --------
(dollars in thousands)
<S> <C> <C>
Nonaccrual loans $ 92 177
Restructured loans -- --
Other impaired loans -- --
Other real estate -- --
----- -----
Total nonperforming loans 92 177
===== =====
Loans past due 90+ days and still accruing 67 26
===== =====
Other potential problem loans -- --
===== =====
Income that would have been recorded in
accordance with original terms 2 6
Less income actually recorded -- --
----- -----
Loss of income $ 2 6
===== =====
</TABLE>
CONCENTRATION OF CREDIT RISK
- ----------------------------
The Company grants real estate, commercial, and industrial loans to customers
primarily in Henderson, Texas, and surrounding areas of east Texas. Although the
Company has a diversified loan portfolio, a substantial portion (approximately
42% at June 30, 1996) of its loans are secured by real estate and its ability to
fully collect its loans is dependent upon the real estate market in this region.
The Company typically requires collateral sufficient in value to cover the
principal amount of the loan. Such collateral is evidenced by mortgages on
property held and readily accessible to the Company. See additional information
related to the composition of the Companys loan portfolio included in footnote
number 3, page 7 in the notes to consolidated financial statements.
RECENT ACCOUNTING PRONOUNCEMENTS
- --------------------------------
Effective January 1, 1996 the Company implemented SFAS No. 122, Accounting for
Mortgage Servicing Rights, (Statement 122) which amended Statement No. 65 to
require entities with mortgage banking operations to recognize as separate
assets rights to service mortgage loans for others, regardless of how these
servicing rights were acquired. Entities with mortgage banking operations that
acquire mortgage servicing rights through either the purchase or origination of
mortgage loans and sells those loans with servicing rights retained must
allocate the total cost of the mortgage loans to the mortgage servicing rights
and the loans (without the mortgage servicing rights) based on their relative
fair values. Statement 122 has been implemented prospectively. The impact of
implementing Statement 122 was not significant to the financial condition or
results of operations of the Company.
PROPOSED ACQUISITION
- --------------------
The Company has signed definitive agreements to acquire substantially all
outstanding shares of Waskom Bancshares, Inc. and First State Bank, Waskom,
Texas. Pursuant to this purchase, the Company expects to pay the shareholders of
Waskom Bancshares, Inc. and First State Bank $34.27 and $34.00 per share
respectively, which represents a total purchase price of $3,427,000 and will
result in approximately $1,101,000 in goodwill. The purchase method of
accounting will be used to record the acquisition. At June 30, 1996, First State
Bank had total assets of approximately $24,012,000 including loans of $4,937,000
and total deposits of $21,596,000 and stockholders equity of $2,076,000.
CORPORATE OBJECTIVES
- --------------------
It is the philosophy of the Company to continue to remain independent in
ownership, to foster its image as the community leader in banking, to increase
its market share through selected acquisitions and aggressive marketing, to
maintain a sound earning-asset portfolio, and to assess liquidity needs while
maximizing its profitability and return to its shareholders.
11
<PAGE>
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
None
12
<PAGE>
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.
HENDERSON CITIZENS BANCSHARES, INC.
Date:_____________________ By:_________________________
Milton S. McGee, Jr., CPA
President
Date:_____________________ By:_________________________
Rebecca G. Tanner, CPA
Chief Accounting Officer
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 8,914
<INT-BEARING-DEPOSITS> 3,353
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 129,250
<INVESTMENTS-CARRYING> 82,836
<INVESTMENTS-MARKET> 82,148
<LOANS> 88,060
<ALLOWANCE> 1,121
<TOTAL-ASSETS> 319,726
<DEPOSITS> 286,886
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,821
<LONG-TERM> 0
0
0
<COMMON> 10,800
<OTHER-SE> 20,219
<TOTAL-LIABILITIES-AND-EQUITY> 319,726
<INTEREST-LOAN> 3,400
<INTEREST-INVEST> 6,603
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 10,003
<INTEREST-DEPOSIT> 5,498
<INTEREST-EXPENSE> 5,498
<INTEREST-INCOME-NET> 4,505
<LOAN-LOSSES> 120
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<EXPENSE-OTHER> 3,743
<INCOME-PRETAX> 2,563
<INCOME-PRE-EXTRAORDINARY> 2,563
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,905
<EPS-PRIMARY> .88
<EPS-DILUTED> .88
<YIELD-ACTUAL> 0
<LOANS-NON> 92
<LOANS-PAST> 67
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 159
<ALLOWANCE-OPEN> 1,019
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<RECOVERIES> 39
<ALLOWANCE-CLOSE> 1,121
<ALLOWANCE-DOMESTIC> 1,121
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
