SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earlier event reported) July 25, 2000
COVEST BANCSHARES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 0-20160 36-3820609
(State or other (Commission File No.) (IRS Employer
jurisdiction of Number)
Incorporation)
749 Lee Street, Des Plaines, Illinois 60016
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) 847-294-6500
Item 5. Other Events
On Tuesday, July 25, 2000, the Company issued a press release pertaining to
Second Quarter 2000 results. The text of the press release is attached
hereto as Exhibit 99.1.
Item 7. Exhibit 99.1
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 hereunto duly authorized.
Dated: July 25, 2000
COVEST BANCSHARES, INC.
By: /s/ JAMES L. ROBERTS
-----------------------------
James L. Roberts
President and
Chief Executive Officer
By: /s/ PAUL A. LARSEN
-----------------------------
Paul A. Larsen
Executive Vice President and
Chief Financial Officer
CoVest Bancshares, Inc. Reports 8 Percent Increase in Net Income
DES PLAINES, IL July 25, 2000 - CoVest Bancshares, Inc.'s (Nasdaq/COVB) net
income was $1,125,000 for the second quarter of 2000, up 8% over $1,039,000 for
the same period last year. Basic earnings per share were $0.28, a 12%
increase compared to $0.25 per share for the second quarter of 1999. Diluted
earnings per share were $0.27, a 13% increase compared to $0.24 per share for
second quarter 1999.
For the first six months of 2000, the Company earned $2,222,000 versus
$1,825,000 for the like period in 1999. Basic earnings per share were $0.54
compared to $0.44 per share for the first six months of 2000. Diluted earnings
per share were $0.54, a 29% increase compared to $0.42 per share for the first
six months of 1999.
Return on average equity and return on average assets during the second quarter
were 9.65% and 0.80% respectively during 2000 compared to 8.96% and 0.77% in
1999. Return on average equity and average assets for the first six months of
2000 was 9.58% and 0.79% respectively compared to 7.81% and 0.68% in 1999.
The Company's efficiency ratio was 60.90% compared to 64.31% in the second
quarter of 1999. The efficiency ratio was 60.18%, a 13% decrease compared to
69.06% for the first six months of 1999.
Cash earnings (net earnings adjusted for the after tax impact of amortization
of goodwill) for the second quarter of 2000 were $1,156,000, or $0.28 (basic)
and $0.28 (diluted) earnings per share, compared to $1,071,000 or $0.26 (basic)
and $0.25 (diluted) earnings per share for the same period in 1999.
Cash earnings for the first six months of 2000 were $2,284,000, or $0.56
(basic) and $0.55 (diluted) earnings per share, compared to $1,888,000, or
$0.46 (basic) and $0.44 (diluted) earnings per share for the same period in
1999.
Net interest income increased by $343,000, or 9%, for the second quarter of
2000 compared to the second quarter of 1999. A $28 million increase in average
earning assets for the second quarter of 2000 versus the second quarter of 1999
accounted for part of this increase. The Company's net interest margin
averaged 3.21% for the second quarter of 2000, a 13 basis point increase from
3.08% in 1999. The net spread averaged 2.59% for the second quarter of 2000, a
9 basis point decrease from 2.68% during the second quarter of 1999. The yield
on average earning assets increased by 63 basis points while the cost of
interest-bearing liabilities increased by 72 basis points. The Company expects
the net interest margin to remain relatively stable during the next several
quarters.
The provision for possible loan losses decreased by $38,000 from $288,000 to
$250,000 in the second quarter of 2000.
Non interest income decreased $453,000, or 37%, to $757,000 from the comparable
quarter last year. Loan charges and servicing fees decreased by $6,000 as the
volume of loans remained the same. Mortgage Center income was down 75%, to
$122,000 in the second quarter of 2000 compared to $495,000 in the similar
quarter in 1999 due to higher interest rates, which had a major impact on
mortgage loan refinancing and new loan generation. Deposit related charges and
fees increased by $12,000 during the second quarter of 2000 as compared to the
second quarter of 1999.
Non-interest expense decreased $244,000, or 7% for the second quarter of 2000
from the comparable quarter in 1999. Total compensation and benefit costs
increased $102,000 for the quarter ended June 30, 2000 versus June 30, 1999.
There were decreases in commission expenses of $72,000 due to a lower volume of
loan originations; the cost of Federal Deposit Insurance premiums decreased by
$33,000 because of a lower assessment level; data processing expenses decreased
by $25,000 as Y2K expenses were not present during 2000; and miscellaneous
expenses decreased by $206,000. The Company's goal is to maintain an
efficiency ratio in the 60% range.
At June 30, 2000, total non-performing assets amounted to $560,000, or 0.10% of
total assets compared to $766,000, or 0.13% of total assets at December 31,
1999. These are multi-family and mortgage loans in various stages of fore-
closure and one parcel of residential Other Real Estate Owned.
The Company's assets decreased to $554 million as of June 30, 2000, as compared
to $568 million at December 31, 1999. Net loans receivable decreased $1 million
to $462 million as of June 30, 2000 versus $463 million outstanding as of
December 31, 1999. Multi-family loans increased by $14.7 million and commercial
loans increased by $7.0 million. This increase was offset by a decrease in
leases and construction loans of approximately $9.2 million and $6.5 million,
respectively. Limited growth in the loan portfolio is expected during the
remainder of 2000. Total securities have decreased by $15.0 million as a
result of the sales and security paydowns. These funds were used to repay FHLB
advances. Deposits increased 7% to $424 million as of June 30, 2000 compared to
$398 million as of December 31, 1999. In March 2000, the Bank introduced a
High Yield Account. This account has a market sensitive rate of interest
that is indexed to the 91-day Treasury Bill weekly auction rate. All balances
over $2,500 are tiered to this market interest rate. The Company is focused
on growing High Yield Account balances and attracting new commercial deposit
accounts. At June 30, 2000, the account had a $103 million balance, a 16%
increase from year-end 1999. Additional deposit growth has been centered in
non-interest bearing deposits that grew by approximately 22% or $4.3 million
and purchased certificates of deposit, which increased by approximately 29% or
$12.7 million. The increase in deposits has been used to pay down FHLB
borrowings.
Stockholders' equity totaled $47 million at June 30, 2000. The number of
common shares outstanding was 4,015,545 and the book value per common share
outstanding was $11.58.
CoVest Bancshares, Inc. is a bank holding company for CoVest Banc, a national
bank servicing customers with three full-service offices and a mortgage office
located in the northwest suburbs of the greater Chicago area. The Bank offers
a wide range of retail and commercial banking services to the communities it
serves. In addition, the bank provides other financial investments through its
subsidiary, CoVest Investments, Inc.
SAFE HARBOR STATEMENT
This report contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company intends such forward-
looking statements to be covered by the safe harbor provisions for forward-
looking statements contained in the Private Securities Reform Act of 1995,
and is including this statement for purposes of these safe harbor provisions.
Forward-looking statements, which are based on certain assumptions and
describe future plans, strategies and expectations of the Company, are
generally identifiable by use of the words "believe," "expect," "intend,"
"anticipate," "estimate," "project" or similar expressions. The Company's
ability to predict results or the actual effect of future plans or strategies is
inherently uncertain. Factors which could have a material adverse affect on the
operations and future prospects of the Company and the subsidiary include,
but are not limited to, changes in: interest rates, general economic
conditions, legislative/regulatory changes, monetary and fiscal policies of the
U.S. Government, including policies of the U.S. Treasury and the Federal Reserve
Board, the quality or composition of the loan or securities portfolios, demand
for loan products, deposit flows, competition, demand for financial services in
the Company's market area, our implementation of new technologies, our ability
to develop and maintain secure and reliable electronic systems and accounting
principles, policies and guidelines. These risks and uncertainties should be
considered in evaluating forward-looking statements and undue reliance should
not be placed on such statements. Further information concerning the Company
and its business, including additional factors that could materially affect the
Company's financial results, is included in the Company's filings with the
Securities and Exchange Commission.
COVEST BANCSHARES INC.
FINANCIAL HIGHLIGHTS
(Unaudited)
THREE MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999 % CHANGE
----------- ----------- ---------
Earnings:
Net Interest Income (FTE) $4,381,000 $4,079,000 7%
Net Income $1,125,000 $1,039,000 8%
Per Share
Earnings $0.28 $0.25 12%
Diluted Earnings $0.27 $0.24 13%
Key Ratios:
Return on Average Assets 0.80% 0.77% 4%
Return on Average Equity 9.65% 8.96% 8%
Net Interest Margin 3.21% 3.08% 4%
Efficiency Ratio 60.90% 64.31% -5%
Average Stockholders' Equity to
Average Assets 8.26% 8.59% -4%
Risk-Based Capital Ratios:
Tier I
Company 12.1% 12.7% -5%
Bank 11.0% 12.1% -9%
Total
Company 13.4% 14.0% -4%
Bank 12.3% 13.3% -8%
Common Stock Data:
Cash Dividends Declared Per Share $0.08 $0.08 0%
Book Value Per Share $11.58 $11.05 5%
Price/Earnings Ratio 9.56X 16.53X -42%
COVEST BANCSHARES INC.
FINANCIAL HIGHLIGHTS
(Unaudited)
SIX MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999 % CHANGE
----------- ----------- ----------
Earnings:
Net Interest Income (FTE) $8,586,000 $8,078,000 6%
Net Income $2,222,000 $1,825,000 22%
Per Share
Earnings $0.54 $0.44 23%
Diluted Earnings $0.54 $0.42 29%
Key Ratios:
Return on Average Assets 0.79% 0.68% 16%
Return on Average Equity 9.58% 7.81% 23%
Net Interest Margin 3.15% 3.06% 3%
Efficiency Ratio 60.18% 69.06% -13%
Average Stockholders' Equity to
Average Assets 8.25% 8.67% -5%
Risk-Based Capital Ratios:
Tier I
Company 12.1% 12.7% -5%
Bank 11.0% 12.1% -9%
Total
Company 13.4% 14.0% -4%
Bank 12.3% 13.3% -8%
Common Stock Data:
Cash Dividends Declared Per Share $0.16 $0.16 0%
Book Value Per Share $11.58 $11.05 5%
Price/Earnings Ratio 9.56X 16.53X -42%
COVEST BANCSHARES INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
JUNE 30, DEC. 31,
(Dollars in thousands) 2000 1999
--------- ---------
ASSETS
------
CASH ON HAND AND IN BANKS $ 8,944 $ 9,027
INTEREST BEARING DEPOSITS 3,452 1,590
--------- ---------
Cash and Cash Equivalents 12,396 10,617
SECURITIES:
Securities Available-for-Sale 39,630 51,702
Mortgage-Backed and Related
Securities Available-for-Sale 15,499 18,759
Federal Home Loan Bank and
Federal Reserve Bank Stock 6,635 6,529
-------- --------
TOTAL SECURITIES 61,764 76,990
LOANS RECEIVABLE:
Commercial Loans 24,387 17,426
Multi-Family Loans 140,826 126,109
Commercial Real Estate Loans 71,548 74,284
Construction Loans 39,724 46,177
Commercial/Municipal Leases 12,874 22,029
Mortgage Loans 125,659 130,160
Consumer Loans 52,182 51,239
Mortgage Loans held for Sale 46 106
-------- --------
TOTAL LOANS RECEIVABLE 467,246 467,530
Allowance for Possible Loan Loss ( 5,240) ( 4,833)
-------- --------
LOANS RECEIVABLE, NET 462,006 462,697
ACCRUED INTEREST RECEIVABLE 3,370 3,437
PREMISES AND EQUIPMENT 10,292 10,669
OTHER REAL ESTATE OWNED 75 0
GOODWILL 1,646 1,749
MORTGAGE SERVICING RIGHTS 137 148
OTHER ASSETS 1,814 2,189
-------- --------
TOTAL ASSETS $553,500 $568,496
======== ========
COVEST BANCSHARES INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Continued)
(Unaudited)
JUNE 30, DEC. 31,
2000 1999
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES:
Deposits:
Non-Interest Bearing $ 23,959 $ 19,691
Interest Bearing Checking 22,321 21,930
Savings Accounts 47,295 49,700
Money Market Accounts 103,130 88,779
Certificates of Deposit 159,433 165,578
Jumbo CDs 11,229 8,204
Purchased CDs 56,831 44,173
-------- --------
424,198 398,055
Short-Term Borrowings and Securities
Sold U/A to Repurchase 52,565 85,004
Long-Term Advances from Federal
Home Loan Bank 19,000 29,000
Advances from Borrowers for
Taxes and Insurance 4,864 4,640
Accrued Expenses and Other Liabilities 6,362 5,523
--------- ---------
TOTAL LIABILITIES 506,989 522,222
STOCKHOLDERS' EQUITY:
Common Stock, par value $.01 per share;
7,500,000 authorized shares; 4,403,803
shares issued at 6/30/00 and 12/31/99
respectively 44 44
Additional Paid-in Capital 17,824 17,919
Retained Earnings 35,084 33,514
Treasury Stock, 388,258 shares and
299,796 shares, held at cost 6/30/00
and 12/31/99 respectively (5,194) (4,312)
Unearned Stock Award 0 (14)
Accumulated Other Comprehensive
Loss (1,247) (877)
--------- --------
TOTAL STOCKHOLDERS' EQUITY 46,511 46,274
--------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $553,500 $568,496
========= ========
<TABLE>
<CAPTION>
COVEST BANCSHARES INC.
CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED SIX MONTHS ENDED
(Unaudited) JUNE 30, JUNE 30, JUNE 30, JUNE 30
(Dollars in thousands, except per 2000 1999 2000 1999
share data) --------- --------- --------- ---------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans and Leases Receivable $ 9,574 $ 7,672 $18,821 $15,263
Interest Bearing Deposits at Banks 161 185 278 572
Mortgage-Backed and Related Securities 289 385 607 894
Taxable Securities 524 808 1,062 1,285
Tax Exempt Securities 92 178 193 334
Other Interest and Dividend Income 120 115 237 244
--------- --------- --------- ---------
Total Interest Income 10,760 9,343 21,198 18,592
INTEREST EXPENSE
Deposits 4,996 3,660 9,822 7,337
Advances from Federal Home Loan Bank 1,195 1,621 2,536 3,224
Other Borrowed Money 236 72 355 126
--------- --------- --------- ---------
Total Interest Expense 6,427 5,353 12,713 10,687
NET INTEREST INCOME 4,333 3,990 8,485 7,905
Provision for Possible Loan Losses 250 288 510 387
NET INTEREST INCOME AFTER PROVISION --------- --------- -------- ---------
FOR POSSIBLE LOAN LOSSES 4,083 3,702 7,975 7,518
NON-INTEREST INCOME
Loan Servicing Fees 269 275 593 477
Mortgage Center Income 122 495 208 1,031
Deposit Related Charges and Fees 264 252 489 488
Gain/(Loss) on Sale of Securities (8) -0- (96) 2
Insurance and Annuity Commissions 31 59 91 98
Other 79 129 145 160
--------- --------- --------- ---------
TOTAL Non-Interest Income 757 1,210 1,430 2,256
NON-INTEREST EXPENSE
Compensation and Benefits 1,618 1,516 3,110 3,483
Commissions and Incentives 158 230 257 415
Occupancy and Equipment 518 522 1,012 1,049
Federal Insurance Premium 21 54 40 107
Data Processing 219 244 437 488
Advertising 111 103 202 195
Other Real Estate Owned (6) -0- (6) 2
Amortization of Goodwill 51 51 102 103
Amortization of Mortgage Servicing Rights 6 14 11 35
Other 404 610 803 1,140
--------- --------- --------- ----------
TOTAL NON-INTEREST EXPENSE 3,100 3,344 5,968 7,017
--------- --------- --------- ----------
INCOME BEFORE INCOME TAXES 1,740 1,568 3,437 2,757
Income Tax Provision (615) (529) (1,215) (932)
--------- --------- --------- ----------
NET INCOME $ 1,125 $ 1,039 $ 2,222 $ 1,825
========= ========= ========= ==========
Basic Earnings Per Share $0.28 $0.25 $0.54 $0.44
Diluted Earnings Per Share $0.27 $0.24 $0.54 $0.42
Comprehensive Income/(Loss) $ 1,160 $ 371 $ 1,852 $ 856
</TABLE>
<TABLE>
<CAPTION>
COVEST BANCSHARES INC.
AVERAGE BALANCE SHEET
(Unaudited)
(Dollars in thousands)
The following table sets forth certain information related to the Company's
average balance sheet. It reflects the average yield on assets and average cost
of liabilities for the periods indicated, as derived by dividing income or
expense by the average daily balance of assets or liabilities, respectively,
for the periods indicated.
THREE MONTHS ENDED
-----------------------------------------------------------------------------------
JUNE 30, 2000 JUNE 30, 1999
----------------------------------------- ---------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST YIELD/COST BALANCE INTEREST YIELD/COST
INTEREST-EARNING ASSETS: ----------------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
Commercial Loans (A)(B) $23,170 $ 466 8.04% $ 10,488 $ 171 6.51%
Multi-Family Loans (B) 136,157 2,681 7.88 71,799 1,405 7.83
Commercial Real Estate (B) 71,696 1,498 8.36 68,721 1,473 8.57
Construction Loans (B) 41,144 1,131 11.00 40,722 901 8.85
Commercial/Muni Leases 14,760 234 6.34 31,999 501 6.27
Mortgage Loans (A)(B) 127,848 2,394 7.49 128,777 2,313 7.18
Consumer Loans 52,207 1,170 8.96 42,680 908 8.51
Securities 52,072 784 6.02 84,652 1,190 5.63
Mortgage-Backed and
Related Securities 16,684 289 6.93 22,355 385 6.89
Other Investments 10,550 161 6.10 15,849 185 4.67
----------------------------------------- ----------------------------------
Total Interest-Earning Assets $546,288 $10,808 7.91% $518,042 $ 9,432 7.28%
Non-Interest Earning Assets 17,728 21,777
----------------------------------------- ----------------------------------
TOTAL ASSETS $564,016 $539,819
========================================= =======================================
INTEREST-BEARING LIABILITIES:
Interest-Bearing Checking $ 22,711 $ 63 1.11% $ 22,628 $ 59 1.05%
Savings 48,409 301 2.49 52,152 324 2.49
Money Market 98,651 1,408 5.71 82,375 898 4.36
Certificates of Deposits 161,674 2,307 5.71 173,168 2,261 5.22
Jumbo CDs 9,637 142 5.89 9,273 118 5.10
Purchased CDs 48,330 776 6.42 0 0 0.00
FHLB Advances 78,231 1,195 6.11 120,000 1,621 5.40
Other Borrowed Funds 15,754 236 5.99 6,318 72 4.55
----------------------------------------- ------------------------------------
Total Interest-Bearing
Liabilities $483,397 $ 6,427 5.32% $465,914 $ 5,353 4.60%
Non-Interest Bearing Deposits 23,066 16,646
Other Liabilities 10,936 10,863
----------------------------------------- ----------------------------------
TOTAL LIABILITIES $517,399 $493,423
----------------------------------------- ----------------------------------
Stockholders' Equity 46,617 46,396
----------------------------------------- ----------------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $564,016 $539,819
========================================= ==================================
NET INTEREST INCOME $ 4,381 $ 4,079
----------------------------------------- ----------------------------------
NET INTEREST RATE SPREAD (C) 2.59% 2.68%
----------------------------------------- ----------------------------------
NET INTEREST MARGIN (D) 3.21% 3.08%
----------------------------------------- ----------------------------------
(A) Includes cash basis loans.
(B) Includes deferred fees/costs.
(C) Interest Rate Spread is calculated by subtracting the average cost of
interest-bearing liabilities from the average rate on interest-earning
assets.
(D) Net Interest Margin is calculated by dividing net interest income by
average interest-earning assets.
</TABLE>
<TABLE>
<CAPTION>
COVEST BANCSHARES INC.
AVERAGE BALANCE SHEET
(Unaudited)
(Dollars in thousands)
The following table sets forth certain information related to the Company's
average balance sheet. It reflects the average yield on assets and average cost
of liabilities for the periods indicated, as derived by dividing income or
expense by the average daily balance of assets or liabilities, respectively,
for the periods indicated.
SIX MONTHS ENDED
-----------------------------------------------------------------------------------
JUNE 30, 2000 JUNE 30, 1999
----------------------------------------- ---------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST YIELD/COST BALANCE INTEREST YIELD/COST
INTEREST-EARNING ASSETS: ----------------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
Commercial Loans (A)(B) $20,688 $ 800 7.73% $ 9,914 $ 307 6.19%
Multi-Family Loans (B) 130,241 5,076 7.79 68,501 2,677 7.82
Commercial Real Estate (B) 72,796 3,034 8.34 65,339 2,795 8.56
Construction Loans (B) 43,173 2,297 10.64 38,271 1,697 8.87
Commercial/Muni Leases 17,247 544 6.31 32,445 1,020 6.29
Mortgage Loans (A)(B) 128,928 4,788 7.43 136,538 4,922 7.21
Consumer Loans 51,735 2,282 8.82 43,810 1,845 8.42
Securities 52,929 1,592 6.02 71,008 2,036 5.74
Mortgage-Backed and
Related Securities 17,500 607 6.94 26,397 894 6.77
Other Investments 9,508 278 5.85 24,653 572 4.64
----------------------------------------- ----------------------------------
Total Interest-Earning Assets $544,745 $21,299 7.82% $516,876 $ 18,765 7.26%
Non-Interest Earning Assets 17,674 21,855
----------------------------------------- ----------------------------------
TOTAL ASSETS $562,419 $538,731
========================================= =======================================
INTEREST-BEARING LIABILITIES:
Interest-Bearing Checking $ 22,564 $ 124 1.10% $ 22,617 $ 118 1.05%
Savings 48,969 610 2.49 52,297 647 2.47
Money Market 94,068 2,613 5.56 81,581 1,762 4.32
Certificates of Deposits 163,772 4,628 5.65 173,808 4,553 5.24
Jumbo CDs 9,014 260 5.77 9,968 257 5.16
Purchased CDs 49,321 1,587 6.44 0 0 0.00
FHLB Advances 84,027 2,536 6.04 120,000 3,224 5.37
Other Borrowed Funds 12,256 355 5.79 5,661 126 4.46
----------------------------------------- ------------------------------------
Total Interest-Bearing
Liabilities $483,991 $12,713 5.25% $465,932 $ 10,687 4.59%
Non-Interest Bearing Deposits 21,432 15,380
Other Liabilities 10,603 10,703
----------------------------------------- ----------------------------------
TOTAL LIABILITIES $516,026 $492,015
----------------------------------------- ----------------------------------
Stockholders' Equity 46,393 46,716
----------------------------------------- ----------------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $562,419 $538,731
========================================= ==================================
NET INTEREST INCOME $ 8,586 $ 8,078
----------------------------------------- ----------------------------------
NET INTEREST RATE SPREAD (C) 2.57% 2.67%
----------------------------------------- ----------------------------------
NET INTEREST MARGIN (D) 3.15% 3.06%
----------------------------------------- ----------------------------------
(A) Includes cash basis loans.
(B) Includes deferred fees/costs.
(C) Interest Rate Spread is calculated by subtracting the average cost of
interest-bearing liabilities from the average rate on interest-earning
assets.
(D) Net Interest Margin is calculated by dividing net interest income by average
interest-earning assets.
</TABLE>
