U.S. 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 MARCH 31, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from________________________to _____________________
Commission File Number: O-20254
1ST UNITED BANCORP
--------------------------
(Exact name of Registrant)
FLORIDA 65-0178023
- ------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
or incorporation of organization) Identification No.)
980 N. FEDERAL HIGHWAY, BOCA RATON, FL 33432
- --------------------------------------------
(Address of principal executive offices)
(561) 392-4000
------------------------------
Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 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 March 31, 1997.
8,437,479
<PAGE>
1st UNITED BANCORP
Index
Part I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
March 31, 1997 and December 31, 1996 1
Condensed Consolidated Statements of Income -
three months ended March 31, 1997 and 1996 2
Condensed Consolidated Statements of Cash Flows -
three months ended March 31, 1997 and 1996 3
Condensed Consolidated Statements of Shareholders' Equity -
three months ended March 31, 1997 and 1996 4
Notes to Condensed Consolidated Financial Statements 5-6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 7-9
Part II OTHER INFORMATION 10
Item 5. Other Events 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
This Form 10-Q contains forward-looking statements that involve risks
and uncertainties, and there are certain important factors that could cause
actual results to differ materially from those anticipated. These important
factors include, but are not limited to, economic conditions both generally and
more specifically in the markets in which 1st United Bancorp ("Bancorp") and 1st
United Bank ("1st United Bank") operate, competition for Bancorp's and 1st
United's customers from other providers of financial services, government
legislation and regulation (which changes from time to time and over which
Bancorp and 1st United have no control), changes in interest rates, the impact
of Bancorp's rapid growth, and other risks detailed in the Annual Report on Form
10-K and in Bancorp's other filings with the Securities and Exchange Commission,
all of which are difficult to predict and many of which are beyond the control
of Bancorp.
<PAGE>
<TABLE>
<CAPTION>
1st UNITED BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1997 1996
(Unaudited) (Note)
----------- ------------
(In thousands, except per share data)
ASSETS
<S> <C> <C>
Cash and due from banks $ 31,877 $ 30,247
Interest bearing deposits 67,846 41,600
Federal funds sold 4,077 14,475
--------- ---------
Cash and cash equivalents 103,800 86,322
Investment securities available for sale 17,899 21,650
Investment securities held to maturity, market value of
$37,974 in 1997 and $38,067 in 1996 38,430 38,324
Loans, net of allowance for loan losses of $8,515 in 1997
and $8,551 in 1996 383,837 379,411
Premises and equipment, net 14,954 14,974
Accrued interest receivable 2,711 2,560
Other real estate owned 3,004 3,196
Goodwill, net 6,941 7,016
Other assets 7,839 7,835
--------- ---------
$ 579,415 $ 561,288
========= =========
LIABILITIES
Deposits:
Demand deposits, non interest bearing $ 150,530 $ 141,990
NOW and money market accounts 193,450 199,044
Savings deposits 51,544 49,779
Time deposits of $100,000 or more 29,247 23,407
Time deposits of less than $100,000 92,492 90,800
--------- ---------
Total deposits 517,263 505,020
Federal funds purchased and securities sold under
agreements to repurchase 3,452 0
Other liabilities 6,212 5,236
--------- ---------
Total Liabilities 526,927 510,256
SHAREHOLDERS' EQUITY
Common Stock, par value $.01 per share -
authorized 20,000,000 shares, issued and outstanding
8,437,479 shares in 1997 and 8,435,804 shares in 1996 84 84
Additional paid-in capital 33,863 33,851
Retained earnings 18,640 17,194
Unrealized losses on securities available for sale (99) (97)
--------- ---------
Total Shareholders' Equity 52,488 51,032
--------- ---------
$ 579,415 $ 561,288
========= =========
</TABLE>
Note: The balance sheet at December 31, 1996 has been derived from the audited
financial statements.
See accompanying Notes.
1
<PAGE>
1st UNITED BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
--------------------
1997 1996
------- -------
(In thousands, except
per share data)
Interest income:
Loans, including fees $ 9,296 $ 8,121
Investment securities 900 1,302
Federal funds sold 105 608
Interest bearing deposits 701 21
------- -------
11,002 10,052
Interest expense:
Deposits 2,918 2,744
Federal funds purchased and securities sold under
agreements to repurchase 10 74
Other 5 0
------- -------
2,933 2,818
------- -------
Net interest income 8,069 7,234
Provision for loan losses 40 80
------- -------
Net interest income after provision for loan losses 8,029 7,154
Non interest income:
Service charges on deposit accounts 962 1,119
Gain on sale of loans 421 187
Gain on sale of other real estate owned 4 0
Credit card discount 0 41
Rental income 47 25
Other 305 553
------- -------
1,739 1,925
Non interest expense:
Salaries and employee benefits 2,933 2,922
Occupancy and furniture and equipment expense 1,185 1,188
Insurance 48 59
Other real estate owned 198 154
Stationery, printing and supplies 150 136
Professional fees 232 245
FDIC insurance 42 54
Miscellaneous taxes 53 49
Telephone 144 109
Postage 93 109
Goodwill amortization 155 155
Advertising and public relations 89 149
Other 749 941
------- -------
6,071 6,270
------- -------
Income before income taxes 3,697 2,809
Income taxes 1,406 1,064
======= =======
Net income $ 2,291 $ 1,745
======= =======
Income per common and common equivalent shares $ 0.27 $ 0.21
======= =======
Dividends per share $ 0.10 $ 0.03
======= =======
See accompanying Notes.
2
<PAGE>
<TABLE>
<CAPTION>
1st UNITED BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
-----------------------
1997 1996
--------- ---------
OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 2,291 $ 1,745
Adjustments to reconcile net income to net cash provided by
operating activities, net of effects of acquisition 450 491
--------- ---------
Net cash provided by operating activities 2,741 2,236
Investing Activities:
Net cash received in acquisition 0 27,375
Purchase of investment securities held to maturity (1,983) (2,101)
Maturities of investment securities held to maturity 1,884 4,050
Purchase of investment securities available for sale 0 (3,423)
Maturities and sales of investment securities available for sale 3,740 25,756
(Decrease) increase in loans, net (5,461) 12,554
Proceeds from sale of other real estate 1,144 0
Purchase of bank premises and equipment (350) 0
Other (84) 206
--------- ---------
Net cash (used in) provided by investing activities (1,110) 64,417
Financing Activities:
Increase (decrease) in deposits 12,243 (9,532)
Increase in federal funds purchased and securities sold under
agreements to repurchase 3,452 600
Payments on long term debt 0 (2,743)
Issuance of notes payable, related parties 0 2,168
Proceeds from exercise of stock options 12 0
Purchase of treasury stock by pooled company 0 (267)
Payment of dividends (845) (221)
Payment of dividends by pooled company 0 (69)
Other 985 (988)
--------- ---------
Net cash provided by (used in) financing activities 15,847 (11,052)
--------- ---------
Increase in cash and cash equivalents 17,478 55,601
Cash and cash equivalents at beginning of period 86,322 38,036
--------- ---------
Cash and cash equivalents at end of period $ 103,800 $ 93,637
========= =========
</TABLE>
See accompanying Notes.
3
<PAGE>
<TABLE>
<CAPTION>
1ST UNITED BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
UNREALIZED
LOSSES ON
ADDITIONAL SECURITIES TOTAL
COMMON STOCK PAID-IN RETAINED AVAILABLE SHAREHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS FOR SALE EQUITY
---------- ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1996 7,445,804 $ 74 $ 26,782 $ 11,487 $ (6) $ 38,337
Stock issued for
acquisition of The American
Bancorporation of the South 820,000 8 6,363 6,371
Retirement of stock by
pooled company (267) (267)
Change in valuation
allowance for unrealized
losses on securities
available for sale (171) (171)
Cash dividends -
$0.03 per share (221) (221)
Cash dividends of pooled
company (69) (69)
Net income 1,745 1,745
---------- ---------- ---------- ---------- ---------- ----------
Balance, March 31, 1996 8,265,804 $ 82 $ 32,878 $ 12,942 $ (177) $ 45,725
========== ========== ========== ========== ========== ==========
Balance, January 1, 1997 8,435,804 $ 84 $ 33,851 $ 17,194 $ (97) $ 51,032
Proceeds from exercise of
stock options 1,675 12 12
Change in valuation
allowance for unrealized
losses on securities
available for sale (2) (2)
Cash dividends -
$0.10 per share (845) (845)
Net income 2,291 2,291
---------- ---------- ---------- ---------- ---------- ----------
Balance, March 31, 1997 8,437,479 $ 84 $ 33,863 $ 18,640 $ (99) $ 52,488
========== ========== ========== ========== ========== ==========
</TABLE>
See accompanying Notes.
4
<PAGE>
1st UNITED BANCORP AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information, the instructions to Form 10Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments, (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three months ended March 31, 1997 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1997. For further information, refer to the consolidated financial
statements and footnotes thereto included in the 1st United Bancorp's
("Bancorp") annual report on Form 10-K for the year ended December 31, 1996.
NOTE B - INCOME PER COMMON SHARE
Income per common share is calculated by dividing net income by the weighted
average number of shares of common stock and common stock equivalents
outstanding during each period. Common stock equivalents represent the
potentially dilutive effect of the assumed exercise of certain outstanding stock
options. Average shares outstanding after the dilutive effect of common stock
equivalents for the three months ended March 31, 1997 and 1996 were 8,638,000
and 8,503,000, respectively.
In February 1997 the Financial Accounting Standards Board issued Statement No.
128, Earnings Per Share, which changes the way earnings per share are calculated
and disclosed. Under Statement No. 128, companies are required to disclose BASIC
and DILUTED earnings per share as compared to the present requirement to
disclose PRIMARY and FULLY DILUTED earnings per share. Basic earnings per share
differ from primary earnings per share in that common stock equivalents,
currently included in the calculation of primary earnings per share, are not
included in the determination of basic earnings per share. Diluted earnings per
share differ from fully diluted earnings per share in that common stock
equivalents are currently included in calculating fully diluted earnings per
share, based on the average market price or period ending market price,
whichever is higher, however, they are only based on average market price in
calculating diluted earnings per share. The Statement is effective for financial
statements for both interim and annual periods ending after December 15, 1997.
Early adoption is prohibited. Adoption of the statement is not expected to have
a material impact upon Bancorp's reported earnings per share.
NOTE C - MERGERS AND ACQUISITIONS
On January 5, 1996, Bancorp acquired The American Bancorporation of the South
("American") and merged its wholly owned subsidiary, The American Bank of the
South, into 1st United. Consideration paid by Bancorp to the shareholders of
American was $10,017,000 and was paid in the form of 30% cash and 70% stock.
Approximately 820,000 shares (value per share of $7.78 net of issuance costs) of
Bancorp common stock were issued in this acquisition. This acquisition was
accounted for using the purchase method of accounting and approximately $3.6
million in goodwill was recorded and is being amortized over 15 years under the
straight-line method.
Approximately $163.7 million in total assets were acquired. Included in this
total was approximately $25.6 million, $48 million, $73 million, $8 million and
$5 million in federal funds, investments, net loans, bank premises and equipment
and other real estate, respectively. Included in loans were approximately $11
million in nonaccrual loans. Approximately $152.3 million in deposits, which
includes approximately 30% in non interest bearing demand deposits, were assumed
and sixteen (16) bank owned branch locations throughout Brevard County were
acquired.
To facilitate the acquisition of American, certain of the directors of Bancorp
and senior management of 1st United committed to loan Bancorp $2.5 million. On
January 4, 1996, Bancorp borrowed approximately $2.2 million from these
individuals at a 10% annual interest rate, payable quarterly, with the entire
outstanding principal balance due in one year. Bancorp paid a 1% commitment fee
and 1% funding fee to these individuals and also had the option of extending the
maturity of these notes for five one-year terms. Bancorp repaid these borrowings
in full on May 1, 1996.
5
<PAGE>
NOTE C - MERGERS AND ACQUISITIONS - CONTINUED
The following summarizes (in thousands) the fair value of the assets of American
acquired and the liabilities of American assumed:
Cash and federal funds sold $ 25,645
Investment securities 47,761
Net loans 72,809
Other assets 17,483
Total deposits (152,268)
Borrowings ( 2,743)
Accrued interest and other liabilities ( 1,320)
----------
Net assets $ 7,367
==========
On November 1, 1996, Bancorp completed its merger with Park Bankshares, Inc.
("Park") and its wholly owned subsidiary, First National Bank of Lake Park. Park
had total assets and deposits of approximately $60.1 million and $54.9 million,
respectively. The transaction was accounted for under the pooling-of-interests
method of accounting for business combinations and accordingly, the consolidated
financial statements have been restated for the periods prior to the merger to
include Park. In connection with the transaction, Bancorp issued approximately
816,000 of its common shares to Park shareholders.
The 1996 results of operations of the Company include the pre-merger results of
operations for Park for the three months ended March 31, 1996. Summarized
operating activity for Park, in thousands, for this period was as follows:
Net interest income $739
Non interest income 174
Net income 165
On April 1, 1997, Bancorp completed its merger with Island National Bank and
Trust Company ("Island"). At the date of acquisition Island had total assets and
deposits of approximately $145 million and $132 million, respectively. The
transaction was accounted for under the pooling-of-interests method of
accounting for business combinations and accordingly, the consolidated financial
statements for subsequent periods will be restated to include Island. In
connection with the transaction, Bancorp issued approximately 1,365,000 of its
common shares to Island shareholders.
Summarized pro forma results of operations (in thousands) for Bancorp, giving
effect to the acquisition of Island are as follows:
THREE MONTHS ENDED
MARCH 31,
-----------------------
1997 1996
------ ------
Net interest income $9,464 $8,545
Non interest income 2,325 2,574
Net income 2,534 1,861
Income per common and common equivalent share $0.25 $0.19
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Bancorp's net income increased from $1,745,000 during the three months ended
March 31, 1996, to $2,291,000 during the same period in 1997, an increase of
31.29%. The following summarizes Bancorp's profitability ratios for the three
months ended March 31, 1997 and 1996:
THREE MONTHS ENDED
MARCH 31,
-------------------
1997 1996
------ ------
Net interest income as a % of average assets 5.73% 5.69%
Efficiency ratio (Non interest expenses as a
% of net interest income plus non interest income) 61.89% 68.63%
Return on average assets 1.63% 1.35%
Return on average equity 17.91% 15.45%
NET INTEREST INCOME
Bancorp's results of operations depend, to a large extent, on the level of its
net interest income, which is the difference between the interest income it
receives on its interest-earning assets and the interest expense it pays on its
interest-bearing liabilities.
Net interest income increased from $7,234,000 during the three months ended
March 31, 1996, to $8,069,000 during the same period in 1997, an increase of
11.54%. The increase in net interest income was due to both an increase in
average assets and an increase in net interest income, as a percentage of
average assets. Average loans increased from $335,669,000 during the three
months ended March 31, 1996, to $392,139,000 during the same period in 1997, an
increase of 16.83%. In addition , average loans, as a percentage of average
total assets, increased from 65.25% during the three months ended March 31,
1996, to 69.02% during the same period in 1997.
NON INTEREST INCOME
Non interest income decreased from $1,925,000 during the three months ended
March 31, 1996, to $1,739,000 during the same period in 1997, a decrease of
9.66%. The decrease in non interest income was due to decreases in both service
charges on deposit accounts and other non interest income which were partially
offset by an increase in gains on the sale of loans. The decrease in service
charges on deposit accounts was due to decreases in both customer overdraft
charges and account maintenance charges. The decrease in customer overdraft
charges was due to fewer customers being overdrawn whereas the decrease in
account maintenance charges was due to customers maintaining higher balances in
their accounts. The decrease in other non interest income was due to a high
level of non recurring items included in results of operations for the three
months ended March 31, 1996. The increase in gains on the sale of loans was due
to a higher level of loans sold during the three months ended March 31, 1997.
NON INTEREST EXPENSE
Non interest expense decreased from $6,270,000 during the three months ended
March 31, 1996, to $6,071,000 during the same period in 1997, a decrease of
3.17%. The decrease in non interest expense was primarily related to decreases
in advertising and public relations expense and operating losses and costs
incurred in connection with the acquisition of The American Bancorporation of
the South, the later two of which are included in other non interest expense.
INCOME TAXES
The total provision for income taxes of $1,064,000 during the three months ended
March 31, 1996 and $1,406,000 during the same period in 1997 was computed using
the statutory federal and state income tax rates.
7
<PAGE>
FINANCIAL CONDITION
Bancorp's total assets, deposits and capital, in thousands, increased by
$18,127,000, $12,243,000 and $1,456,000 , respectively, during the three months
ended March 31, 1997. The increases in total assets and deposits were primarily
due to seasonal factors. As a result of the increase in deposits, Bancorp's loan
to deposit ratio decreased from 76.82% at December 31, 1996, to 75.85% at March
31, 1997.
LIQUIDITY
The total of cash and due from banks, interest bearing deposits and federal
funds sold, Bancorp's primary source of liquidity, increased from $86,322,000 at
December 31, 1996, to $103,800,000 at March 31, 1997, as a result of the
increase in deposits referred to above, a decrease in investments securities and
only a modest increase in loans. Bancorp's second source of liquidity, its
investment securities, decreased from $59,974,000 at December 31, 1996, to
$56,329,000 at March 31, 1997 due to maturities not being reinvested in
investment securities.
An additional external source of liquidity is two unsecured federal fund lines
of credit that 1st United Bank has established with two of its correspondent
banks totaling $12 million. In addition, 1st United Bank has entered into master
repurchase agreements with two financial institutions. 1st United Bank is also a
member of the Federal Home Loan Bank of Atlanta and has a borrowing capability
of approximately $45 million under a blanket security agreement.
At March 31, 1997, cash and due from banks, interest bearing deposits, federal
funds sold, investments available for sale and investments held at maturity
which are due within one year totaled $138 million versus potentially volatile
liabilities (certificates of deposit of $100,00 or more, Federal funds purchased
and securities sold under repurchase agreements and public funds) of $32
million.
CAPITAL RESOURCES
At March 31, 1997, Bancorp had total shareholders' equity, of $52,488,000, an
increase of $1,456,000 over that at December 31, 1996. The increase was
primarily the result of net income for the three months ended March 31, 1997, of
$2,291,000 less dividends declared of $845,000.
The components of capital resources, in thousands, and Bancorp's capital ratios,
are as follows:
<TABLE>
<CAPTION>
MARCH 31, 1997 DECEMBER 31, 1997
--------------- -----------------
<S> <C> <C>
Risk adjusted assets $449,190 $431,987
Total assets 579,415 561,288
Tier 1 Capital
Common shareholders' equity $ 52,488 $51,032
Unrealized losses on investment securities available for sale 99 97
Goodwill and other excludable intangibles (7,308) (7,354)
-------- -------
45,279 43,775
Tier 2 Capital
Includable portion of allowance for loan losses 5,615 5,402
-------- -------
Total regulatory capital $ 50,894 $49,177
======== =======
Tier 1 risk adjusted capital ratio 10.08% 10.13%
======== =======
Total risk adjusted capital ratio 11.33% 11.38%
======== =======
Leverage ratio 7.90% 7.86%
======== =======
</TABLE>
The Federal Reserve Board has adopted supervisory risk based capital ratios of
capital to risk weighted assets which require Bancorp and its subsidiaries to
maintain a minimum 8.00% total risk based capital ratio, at least half of which
must be Tier 1 capital. Bancorp's total risk based capital ratio was 11.33% at
March 31, 1997.
8
<PAGE>
ALLOWANCE FOR LOAN LOSSES AND NON-PERFORMING ASSETS
At March 31, 1997, Bancorp's allowance for loan losses was approximately $8.5
million. Although management believes the allowance for loan losses is adequate,
their evaluation of possible losses is a continuing process which may
necessitate adjustments to the allowance in future periods.
The following summarizes the activity in the allowance for loan losses, in
thousands, and the related ratios for the periods ended March 31, 1997 and 1996:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1997 1996
------- -------
<S> <C> <C>
Balance at beginning of period $ 8,551 $ 6,839
Charge-offs (158) (176)
Recoveries 82 74
------- -------
Net charge-offs (76) (102)
Provision for loan losses 40 80
Allowance of purchased banks at date acquired 0 2,568
------- -------
Balance at end of period $ 8,515 $ 9,385
======= =======
Charge-off ratio 0.08% 0.12%
======= =======
</TABLE>
Although Bancorp's charge off ratio for the three months ended March 31, 1996,
of 0.12% was considerably below that experienced for all of 1996 of 0.29%, a
significant portion of the 1996 charge offs were attributable to a few loans
which were incurred in the fourth quarter. The charge off ratio experienced for
the three months ended March 31, 1997, may not be indicative of that which will
be experienced for all of 1997.
Bancorp's non-performing assets, in thousands, and related ratios are as
follows:
<TABLE>
<CAPTION>
MARCH 31, 1997 DECEMBER 31, 1996
-------------- -----------------
<S> <C> <C>
Loans 90 days or more past due and still accruing interest $ 0 $ 347
Non-accrual loans 9,326 11,762
---------
Total non-performing loans $ 9,326 $ 12,109
======== =========
Restructured loans $ 799 $ 900
======== =========
Ratio of non-performing loans to total loans 2.38% 3.11%
======== =========
Ratio of allowance for loan losses to total loans 2.17% 2.20%
======== =========
Ratio of allowance for loan losses to non performing loans 91% 71%
======== =========
</TABLE>
Management has developed an internal system for evaluating and grading loans on
a quarterly basis. Watch list assets are those loans that have been graded
substandard or worse by management, regulators, or the independent loan review
consultant, due to potential weaknesses in the borrowers' ability to repay the
loans, weakness in collateral, the borrowers' financial condition or other
factors. Loans included in the watch list are reviewed and evaluated bi-weekly
by senior management. At March 31, 1997, $21.6 million in loans were included on
1st United's internal watch list of which $12.3 million are performing loans.
Watch list loans totaled approximately $22.6 million at December 31, 1996, of
which $10.5 million were performing loans.
9
<PAGE>
PART II - OTHER INFORMATION
Item 5 Other Events
On January 6, 1997, Bancorp entered into an agreement to acquire Island National
Bank and Trust Company. The transaction, accounted for as a pooling of
interests, was consummated on April 1, 1997, whereby Bancorp issued
approximately 1,365,000 shares of its common stock for all of the outstanding
shares of Island.
One of the required criteria for pooling of interest accounting is that the
parties to the business combination must share mutually in the combined risks
and rights of the transaction. In order to satisfy this risk sharing criteria of
pooling of interests accounting, Securities and Exchange Commission Accounting
Series Release 135 provides that the risk sharing will have occurred in no
affiliate of either party to the merger transaction sells of otherwise disposes
of any common stock received in the transaction until such time as financial
results covering 30 days of post merger combined results of operations have been
published.
In order to satisfy the risk sharing criteria, and thereby allow affiliates of
either party to the transaction to sell or otherwise dispose of Bancorp common
stock acquired in the merger (in compliance with SEC Rules 145 and 144 regarding
resales of common stock acquired in a business combination) provided below are
financial results for the month of April 1997 which reflect the required 30 days
of post merger combined operations as required by SEC Accounting Series Release
135, in thousands except per share data:
Net interest income $3,238
Non interest income
Gain on sale of branch 350
Other income 644
Non interest expense
Merger expense 1,201
Other expense 2,471
Net income 338
Net income per common and common equivalent share $0.03
Average common and common equivalent shares outstanding
(in thousands) 10,005
In the opinion of management of Bancorp, the unaudited combined results of
operations for the month of April 1997, include all normal, recurring
adjustments necessary to present fairly the results of operations for these
periods. These results are not necessarily indicative of the results for the
second quarter of 1997 or the entire year.
Item 6 Exhibits and Reports on Form 8-K
a. 1. Exhibit 11 Computation of per share earnings*
2. Exhibit 27 Financial Data Schedules*
b. On January 11,1997, Bancorp filed a Form 8-K to report the
Acquisition Agreement dated January 6, 1997, between itself, 1st United Bank and
Island National Bank and Trust Company.
* Filed herewith
10
<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.
1ST UNITED BANCORP
Date: May 13, 1997 /s/ WARREN S. ORLANDO
----------------------------
Warren S. Orlando, President
and Chief Executive Officer
Date: May 13, 1997 /s/ JOHN MARINO
-----------------------------
John Marino, Treasurer
(Principal Financial Officer)
11
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
11 Computation of per share earnings
27 Financial Data Schedule (for SEC use only)
EXHIBIT 11
<TABLE>
<CAPTION>
Exhibit 11 - Statement Re: Computation of per share earnings
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
-------------------
1997 1996
-------- --------
(Amounts in thousands,
except per share amounts)
<S> <C> <C>
Primary:
Average shares outstanding 8,436 8,220
Net effect of the assumed exercise of stock options, based on
the treasury stock method using average market price 202 283
------ ------
8,638 8,503
====== ======
Net income $2,291 $1,745
====== ======
Income per common share $ 0.27 $ 0.21
====== ======
Fully Diluted:
Average shares outstanding 8,436 8,220
Net effect of the assumed exercise of stock options, based on
the treasury stock method using average market price or period 206 303
ending market price, whichever is higher
------ ------
8,642 8,523
====== ======
Net income $2,291 $1,745
====== ======
Income per common share $ 0.27 $ 0.20
====== ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 31,877
<INT-BEARING-DEPOSITS> 67,846
<FED-FUNDS-SOLD> 4,077
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 17,899
<INVESTMENTS-CARRYING> 38,430
<INVESTMENTS-MARKET> 37,974
<LOANS> 392,352
<ALLOWANCE> 8,515
<TOTAL-ASSETS> 579,415
<DEPOSITS> 517,263
<SHORT-TERM> 3,452
<LIABILITIES-OTHER> 6,212
<LONG-TERM> 0
0
0
<COMMON> 84
<OTHER-SE> 52,404
<TOTAL-LIABILITIES-AND-EQUITY> 579,415
<INTEREST-LOAN> 9,296
<INTEREST-INVEST> 900
<INTEREST-OTHER> 806
<INTEREST-TOTAL> 11,002
<INTEREST-DEPOSIT> 2,918
<INTEREST-EXPENSE> 2,933
<INTEREST-INCOME-NET> 8,069
<LOAN-LOSSES> 40
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 6,071
<INCOME-PRETAX> 3,697
<INCOME-PRE-EXTRAORDINARY> 3,697
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,291
<EPS-PRIMARY> 0.27
<EPS-DILUTED> 0.27
<YIELD-ACTUAL> 0
<LOANS-NON> 9,326
<LOANS-PAST> 0
<LOANS-TROUBLED> 799
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 8,551
<CHARGE-OFFS> 158
<RECOVERIES> 82
<ALLOWANCE-CLOSE> 8,515
<ALLOWANCE-DOMESTIC> 8,515
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
