<PAGE> 1
UNITED STATES
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 0-84254
PIONEER BANCSHARES, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Delaware 62-1469913
- - --------------------------------------------------------------------------------
(State of other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
801 Broad Street, Chattanooga, TN 37402
- - --------------------------------------------------------------------------------
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code 423-755-0000
------------
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 March 31, 1997:
Title of Class Number of Shares Outstanding
-------------- ----------------------------
Common Stock, $.005 Par Value 3,759,912
<PAGE> 2
PIONEER BANCSHARES, INC.
<TABLE>
<CAPTION>
INDEX PAGE
- - ----- ----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - March 31, 1997,
December 31, 1996 and March 31, 1996 1
Consolidated Statements of Income -
Three Months Ended March 31, 1997 and March 31, 1996 2
Consolidated Statements of Changes in Shareholders' Equity -
Three Months Ended March 31, 1997 and March 31, 1996 3
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1997 and March 31, 1996 4
Notes to Consolidated Financial Statements 5-7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
of Pioneer Bancshares, Inc. 8-20
PART II. OTHER INFORMATION 21
Signatures 22
Exhibit Index 23
</TABLE>
<PAGE> 3
PART 1
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CONDITION Unaudited Unaudited
(in thousands) March 31, December 31, March 31,
--------- ------------ ---------
ASSETS 1997 1996 1996
--------- ------------ ---------
<S> <C> <C> <C>
Cash and due from banks $ 58,383 $ 57,565 $ 56,574
Investment securities:
Held-to-maturity (fair value of $53,362 at
March 31, 1997, $78,260 at December 31,
1996, and $67,323 at March 31, 1996) 54,205 59,409 68,350
Available-for-sale 203,274 191,519 209,082
Federal funds sold 6,100 -- 4,275
Loans 541,163 524,849 452,847
Less: Unearned income 1,724 1,596 1,578
Allowance for loan losses 6,153 5,758 5,741
--------- --------- ---------
Net loans $ 533,286 $ 517,495 $ 445,528
Premises and equipment, net of accumulated
depreciation 20,160 20,242 18,676
Intangible assets 6,243 9,413 7,071
Other assets 15,884 11,597 12,636
--------- --------- ---------
Total Assets $ 897,535 $ 867,240 $ 822,192
========= ========= =========
LIABILITIES
Deposits
Noninterest bearing demand deposits $ 120,278 $ 125,530 $ 126,076
Interest bearing demand deposits 125,043 120,146 119,893
Money market accounts 39,727 43,008 42,580
Savings deposits 109,952 112,684 86,347
Time deposits of less than $100,000 250,943 235,114 234,394
Time deposits of $100,000 or more 76,824 56,086 56,795
--------- --------- ---------
Total deposits $ 722,767 $ 692,568 $ 666,085
Federal funds purchased and securities
sold under agreements to repurchase 64,051 63,339 50,330
Other borrowings 10,000 10,000 10,000
Other liabilities 7,103 7,410 6,729
--------- --------- ---------
Total liabilities $ 803,921 $ 773,317 $ 733,144
--------- --------- ---------
STOCKHOLDERS' EQUITY
Common stock par value $.005 per share;
8,000,000 authorized; 3,759,912 issued $ 19 $ 19 $ 19
Surplus 64,728 64,885 64,728
Retained earnings 30,455 28,771 24,238
Unrealized appreciation/(depreciation) on
securities available for sale (614) 807 83
Less: treasury stock - at cost 974 20
559
--------- --------- ---------
Total stockholders' equity $ 93,614 $ 93,923 $ 89,048
--------- --------- ---------
Total Liabilities and Stockholders' Equity $ 897,535 $ 867,240 $ 822,192
========= ========= =========
</TABLE>
1
<PAGE> 4
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
<TABLE>
<CAPTION>
Unaudited
Three months ended
March 31,
----------------------
INTEREST INCOME 1997 1996
-------- --------
<S> <C> <C>
Interest and fees on loans $ 11,535 $ 9,411
Interest on investment securities
Taxable 2,575 2,981
Tax exempt 964 971
Interest on federal funds sold 184 94
Interest on other earning assets 7 3
-------- --------
Total interest income $ 15,265 $ 13,476
-------- --------
INTEREST EXPENSE
Interest bearing demand deposits $ 831 $ 780
Money market accounts 416 400
Savings deposits 843 584
Time deposits of less than $100,000 3,253 3,230
Time deposits of $100,000 or more 892 704
Federal funds purchased and securities
sold under agreements to repurchase 560 484
Other borrowed money 132 51
-------- --------
Total interest expense $ 6,927 $ 6,233
-------- --------
Net interest income $ 8,338 $ 7,243
Provision for loan losses 466 280
-------- --------
Net interest income
after the provision for loan losses $ 7,872 $ 6,963
-------- --------
NONINTEREST INCOME
Trust income $ 383 $ 313
Service charge on deposit accounts 1,008 837
Net securities gains (losses) (8) 7
Other income 739 784
-------- --------
Total noninterest income $ 2,122 $ 1,941
-------- --------
NONINTEREST EXPENSE
Salaries and employee benefits $ $
3,731 3,324
Occupancy 450 532
Other 2,567 2,252
-------- --------
Total noninterest expense $ 6,748 $ 6,108
-------- --------
Income before provision for income taxes $ 3,246 $ 2,796
Provision for income taxes 850 776
-------- --------
NET INCOME $ 2,396 $ 2,020
======== ========
Net income per common share $ 0.637 $ 0.537
Dividends declared per common share $ 0.2300 $ 0.2175
</TABLE>
2
<PAGE> 5
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY
Pioneer Bancshares, Inc.
(in thousands except for share data)
<TABLE>
<CAPTION>
Unrealized
Common Stock Appreciation
--------------------- (Depreciation)
# of Par Capital Retained Available- Treasury
Shares Value Surplus Earnings for-Sale Sec Stock Total
--------------------- --------- --------- -------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1995 1,879,956 $ 19 $ 64,728 $ 23,045 $ 312 $ (479) $ 87,625
Net income -- -- -- 2,011 -- -- 2,011
Cash Dividend -- -- -- (818) -- -- (818)
Net Changes in Unrealized
Appreciation on
Securities Available-for-Sale -- -- -- -- (229) -- (229)
Purchases of Treasury Stock -- -- -- -- -- 631 631
Issuance of Treasury Stock -- -- -- -- -- (172) (172)
--------- --------- --------- --------- --------- --------- ---------
Balances, March 31, 1996 3,759,912 $ 19 $ 64,728 $ 24,238 $ 83 $ (20) $ 89,048
========= ========= ========= ========= ========= ========= =========
Balances, December 31, 1996 3,759,912 $ 19 $ 64,885 $ 28,771 $ 807 $ (559) $ 93,923
Net income -- -- -- 2,396 -- -- 2,396
Cash dividend -- -- -- (865) -- -- (865)
Net Changes in Unrealized
Depreciation on
Securities Available-for-Sale -- -- -- -- (1,419) -- (1,419)
Sales of Treasury Stock -- -- -- -- -- 604 604
Purchases of Treasury Stock -- -- -- -- -- (1,013) (1,013)
Common Stock Adjustment Related to
Employee Stock Ownership Plan (ESOP) -- -- (157) 153 (2) (6) (12)
--------- --------- --------- --------- --------- --------- ---------
Balances, March 31, 1997 (Unaudited) 3,759,912 $ 19 $ 64,728 $ 30,455 $ (614) $ (974) $ 93,614
========= ========= ========= ========= ========= ========= =========
</TABLE>
3
<PAGE> 6
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Unaudited
Three months ended
OPERATING ACTIVITIES March 31,
-------- --------
1997 1996
-------- --------
<S> <C> <C>
Net income $ 2,396 $ 2,011
Adjustments to reconcile net income to cash
provided by operating activities:
Provision for loan losses 466 280
Depreciation on premises and equipment 653 436
Amortization and accretion of investment
securities 121 205
(Increase) decrease in other assets (1,117) (1,035)
Increase (decrease) in other liabilities (307) (904)
-------- --------
Net cash provided by operating activities $ 2,212 $ 993
-------- --------
INVESTING ACTIVITIES
Proceeds from sales and maturities of
available-for-sale securities $ 12,868 $ 15,340
Proceeds from maturities of
held-to-maturity securities 5,156 9,703
Purchases of investment securities (24,454) (15,220)
Net (increase) decrease in federal funds sold (6,100) 1,660
Net (increase) decrease in loans (16,257) (30,177)
Purchases of premises and equipment (820) (2,709)
-------- --------
Net cash used in investing activities $(29,607) $(21,403)
-------- --------
FINANCING ACTIVITIES
Net increase (decrease) in demand deposits $ (355) $ 109
Net increase (decrease) in savings and MMDA (6,013) (4,281)
Net increase (decrease) in time deposits 36,567 8,162
Net increase (decrease) in repurchase
agreements and federal funds purchased (712) 8,415
Net increase (decrease) in other borrowings -- 10,000
Cash dividends paid (865) (818)
Sales of treasury stock 604 631
Purchase of treasury stock (1,013) (172)
-------- --------
Net cash provided (used) by financing activities $ 28,213 $ 22,046
-------- --------
Increase (decrease) in cash and cash
equivalents $ 818 $ 1,636
-------- --------
Cash and cash equivalents at the beginning of
the period $ 57,565 $ 54,938
-------- --------
Cash and cash equivalents at the end of
the period
$ 58,383 $ 56,574
======== ========
</TABLE>
4
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PIONEER BANCSHARES, INC.
A. PRESENTATION OF FINANCIAL INFORMATION
The financial statements in this report have not been audited. The information
included herein should be read in conjunction with the notes to consolidated
financial statements included in the 1996 Annual Report to Shareholders which
was furnished to each shareholder of the Company on March 24, 1997. The
consolidated financial statements presented herein conform to generally accepted
accounting principles and to general industry practices. All prior period
financial statement data has been restated to reflect the pooling of interests
method of accounting. All prior period per share data has been restated to
reflect the two for one stock split approved at the annual meeting of Pioneer
Bancshares, Inc. stockholders held on May 21, 1996.
Consolidation
The accompanying consolidated financial statements include the accounts of
Pioneer Bancshares, Inc., its subsidiaries, Pioneer Bank and Valley Bank, and
Pioneer Bank's subsidiaries and trusteed affiliates. Pioneer Bank's subsidiaries
include Pioneer Securities, Inc. (PSI), Marion Properties, Inc. and Center
Finance Corporation. The trusteed affiliates of Pioneer Bank include Frontier
Corporation and Valley Company with Valley's wholly-owned subsidiary.
Collectively Pioneer Bancshares and its subsidiaries and trusteed affiliates are
referred to as the "Company." Frontier Corporation and Valley Company are held
in trust for the benefit of Pioneer Bank's shareholders for a period of one
hundred years from 1956. At any time, the trusts may be liquidated by a
two-firsts vote of Pioneer Bank's shareholders. Center Finance Corporation
specializes in consumer finance and related activities in Athens, Tennessee and
commenced operations in the first quarter of 1996.
Substantially all intercompany transactions, profits and balances have been
eliminated.
Accounting Policies
During interim periods, the Company follows the accounting policies set forth in
its Form 10-K for the year ended December 31, 1996, as filed with the Securities
and Exchange Commission. Since December, 1996, there have been no changes in any
accounting principles or practices, or in the method of applying any such
principles or practices.
Interim Financial Data (Unaudited)
In the opinion of Company management, the accompanying interim financial
statements contain all material adjustments, consisting only of normal recurring
adjustments necessary to present fairly the financial condition, the results of
operations, cash flows and stockholders' equity of the Company for the interim
periods. Results for interim periods are not necessarily indicative of the
results to be expected for a full year.
5
<PAGE> 8
Deferred Taxes
Deferred income taxes arise from temporary differences between the income tax
basis and the financial reporting basis of assets and liabilities. If it is more
likely than not that some portion or all of a deferred tax asset will not be
realized, a valuation allowance is recognized.
Common Stock Data
Earnings per share is computed by dividing the net income for the period by the
weighted average number of common shares outstanding during the period.
FASB Statements No. 114 & 118
The Company adopted FASB Statements No. 114 & 118 in the first quarter of 1995.
For purposes of these Statements, management maintains the following policy.
Impaired loans are divided into two classifications: doubtful and loss.
"Doubtful" loans indicate probable loss and are reserved at 50% of outstanding
principal regardless of underlying collateral value. If collateral value is less
than 50% of principal, then additional specific reserves are allocated. "Loss"
loans are deemed uncollectible by management and are reserved at 100% of
outstanding principal value. The Company charges-off loans that it deems to be
substantially uncollectible. The Directors Loan Committee approves all loan
charge-offs. The following table details impaired loans:
<TABLE>
<CAPTION>
---------------------
March 31,
---------------------
1997 1996
---------------------
<S> <C> <C>
Principal balance $274,098 $ 63,616
Interest income recorded during loan impairment -- --
Reserve for potential credit losses 137,049 32,605
Unreserved portion of impaired loans 137,049 31,011
Average principal balance quarter-to-date 149,693 98,965
Average principal balance year-to-date 149,693 98,965
</TABLE>
Impaired loans are identified according to the two classification methods in the
following table:
<TABLE>
<CAPTION>
---------------------
March 31,
---------------------
1997 1996
---------------------
<S> <C> <C>
Doubtful loans outstanding. $274,098 $ 62,022
Loss loans outstanding -- 1,594
</TABLE>
Forward-Looking Statements
Certain written and oral statements made by or with the approval of an
authorized executive officer of the Company may constitute "forward-looking
statements" as defined under the Private Securities Litigation Reform Act of
1995. Words or phrases such as "should result, are expected to, we anticipate,
we estimate, we project" or similar expressions are intended to identify
forward-looking statements. These statements are subject to certain risks and
uncertainties that could cause
6
<PAGE> 9
actual results to differ materially from the Company's historical experience and
its present expectations or projections. These risks and uncertainties include,
but are not limited to, unanticipated economic changes, interest rate movements
and the impact of competition. Caution should be taken not to place undue
reliance on any such forward-looking statements since such statements speak only
as of the date of the making of such statements.
7
<PAGE> 10
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OF PIONEER BANCSHARES, INC.
OVERVIEW
The Company ended the first quarter with total assets of $897.5 million, a 3.5%
increase from December 31, 1996 and an 8.4% increase from March 31, 1996. The
Company reported net income for the first quarter of $2.4 million, or $0.637 per
share, for the three months ended March 31, 1997, compared to $2.0 million, or
$0.537 per share, for the same period in 1996.
NET INTEREST INCOME
Net interest income was $8.3 million for the three months ended March 31, 1997,
compared to $7.2 million for the same period in 1996. This level of net interest
income resulted primarily from, among other things, an increase in net interest
spread of 26 basis points to 3.73% from 3.47% . The net interest margin was
4.48% in the first quarter of 1997 compared to 4.28% in the first quarter of
1996. The margin increased because the yield on interest earning assets
increased 28 basis points, while the rate paid on interest bearing liabilities
increased only 2 basis points. (See "Net Interest Margin")
CASH AND DUE FROM BANKS
Cash and due from banks increased from $57.6 million as of December 31, 1996, to
$58.4 million as of March 31, 1997, representing a 1.4% increase. The increase
is indicative of normal business cycles in the industry. Cash and due from bank
balances will fluctuate depending on monthly cycles and the volume of
uncollected funds deposited by bank customers. It is management's desire to
maintain adequate cash reserves to meet our customers' cash needs.
INVESTMENTS
Investment securities increased from $250.9 million to $257.5 million, or 2.6%
from December 31, 1996 to March 31, 1997. This increase was due to deposits
growing faster than the loan portfolio, creating excess liquidity invested in
securities temporarily until loan volume could match deposit growth. From
December 31, 1996 to March 31, 1997 the "Held-to-Maturity" securities decreased
$5.2 million, or 9.6% while the "Available-for-Sale" securities increased $11.8
million, or 6.1%. The average expected life of the total investment security
portfolio at March 31, 1997 was 3.2 years with an average tax equivalent yield
of 6.52%. Taxable equivalent adjustments, using a 34 percent tax rate, have been
made in calculating yields on tax-exempt obligations.
Since December, 1996, interest rate volatility in the bond market has
effectively devalued the investment portfolio by $1.7 million. Interest rates
increased due to indices that reflect that the economy is generally strong, as
well as to curb inflation. Regarding the investment portfolio, management
intends to (i) buy securities only during those times when prices appear most
8
<PAGE> 11
favorable, (ii) maintain maturities four years or less and (iii) avoid
mortgage-backed securities and structured notes.
FASB 115 requires that the "Available for Sale" portfolio be valued at market
prices and any difference be recorded as a change in asset value of the
investment portfolio and capital. As of March 31, 1997, the FASB 115 adjustment
resulted in a decrease in the asset value of the investment portfolio of
$930,000 and an adjustment to the capital account of $614,000, after reserving
$316,000 for deferred taxes.
As of March 31, 1997, the Company had $6.1 million invested in Federal Funds
compared to no investment in Federal Funds at December 31, 1996. Management
continually monitors the Company's liquidity position to determine the necessary
balances of short term investments and to consider alternative uses of such
funds.
LOAN PORTFOLIO
Loans, net of unearned income increased $16.2 million, or 3.1% from December 31,
1996 to March 31, 1997. The loan mix changed marginally from year end 1996 to
quarter end, March 31, 1997. The largest dollar volume loan category increase
occurred in commercial loans by $17.8 million, or 16.9% from December, 1996 to
March, 1997. Consumer installment loans decreased $2.0 million, or 2.4%, due to
the planned slow down in the indirect auto loan program and payments received on
existing loans outstanding. Residential real estate loans grew only moderately
increasing $11.2 million, or 8.1% from December 31, 1996 to March 31, 1997. Real
estate construction loans increased 15.0%, or $5.6 million, for the same period.
This increase in construction loans is one indication of a strong local economy.
Management is anticipating stronger loan growth for the remainder of the year.
However, the amount of such growth, if any, will depend upon general economic
conditions, including whether or not the Federal Reserve increases or maintains
current interest rate levels. Higher interest rate levels will reduce the growth
rate of the loan portfolio. Management continues to monitor the mix of loans and
the introduction of new loan products to ensure our customers are provided with
the best borrowing opportunities.
The Company had no foreign loans or loans to lesser developed countries as of
March 31, 1997. The Company has not invested in loans to finance highly
leveraged transactions ("HLT"), such as leveraged buy-out transactions, as
defined by the Federal Reserve and other regulatory agencies. There has not been
a concentration in lending to any one industry segment. The Company's loan mix
is further described in the table below.
9
<PAGE> 12
LOAN PORTFOLIO
(in thousands)
<TABLE>
<CAPTION>
March Percent December Percent
1997 of Total 1996 of Total
---- -------- ---- --------
<S> <C> <C> <C> <C>
Commercial, financial
and agricultural $123,055 22.74% $105,297 20.06%
Real estate:
Construction and
land development 42,914 7.93% 37,324 7.11%
Residential 149,435 27.61% 138,194 26.33%
Commercial 142,132 26.26% 158,333 30.17%
Consumer
Credit cards 4,024 0.74% 4,161 0.79%
Installments 79,291 14.65% 81,196 15.47%
Lease financing 312 0.07% 344 0.07%
--------------------------------------------------------
Total Gross Loans $541,163 100.00% $524,849 100.00%
====== ======
Less:
Unearned income 1,724 1,596
Allowance for
loan losses 6,153 5,758
-------- --------
Total Net Loans $533,286 $517,495
======== ========
</TABLE>
PROVISION AND ALLOWANCE FOR POSSIBLE LOAN LOSSES
The economic outlook for the State of Tennessee, where the Company does
business, is cautious. However, it is generally performing better than the
nation as a whole. In the Company's markets, real estate values appear to have
leveled as interest rates have eased higher and new housing starts have peaked.
A continued healthy economy will probably hold the level of net charge-offs and
delinquencies for the remainder of 1997 at or below historical peer group
averages.
Management considers changes in the size and character of the loan portfolio,
changes in nonperforming and past due loans, historical loan loss experience,
the existing risk of individual loans, concentrations of loans to specific
borrowers or industries and existing and prospective economic conditions when
determining the adequacy of the loan loss reserve. The allowance for possible
loan losses increased $395,000, or 6.9% during the first quarter of 1997. The
provision charged to expense is based on continuous analysis by the Company's
management of potential losses in the loan portfolio.
The Company's allowance for possible loan losses as a percentage of loans, net
of unearned income, was 1.17% at March 31, 1997 as compared to 1.14% at December
31, 1996. The allowance for loan losses at March 31, 1997, and December 31,
1996, provided 247.4% and 163.3% coverage of nonperforming assets and loans 90
days or more past due, respectively. Net charge-offs (annualized as a percentage
of average quarter-to-date loans) were 0.05% during the
10
<PAGE> 13
first quarter of 1997 as compared to 0.38% for the same period one year
ago. At March 31, 1997, management believes that the allowance for possible
loan losses is sufficient to absorb potential losses.
ALLOWANCE FOR LOAN LOSSES
(in thousands)
<TABLE>
<CAPTION>
-----------------------------------------------------
1997 1996
-----------------------------------------------------
Quarter Ending March 31 Dec 31 Sept 30 June 30 Mar 31
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at beginning of period $ 5,758 $ 5,270 $ 5,493 $ 5,741 $ 5,872
Loans charged-off 242 493 566 1,069 481
Loans recovered 171 640 122 566 70
----------------------------------------------------
Net charge-offs (recoveries) $ 71 $ (147) $ 444 $ 503 $ 411
Provision for loan losses charged
to expense 466 341 221 255 280
----------------------------------------------------
Balance at end of period $ 6,153 $ 5,758 $ 5,270 $ 5,493 $ 5,741
====================================================
Allowance for loan losses as a
percentage of average loans 1.17% 1.14% 1.11% 1.19% 1.32%
outstanding for the period
Allowance for loan losses as a
percentage of nonperforming assets
and loans 90 days past due
outstanding at end of the period 247.41% 163.30% 180.54% 145.66% 211.77%
Annualized QTD net charge-offs as
a percentage of average loans
outstanding for the period 0.05% (0.12)% 0.37% 0.44% 0.38%
Annualized YTD net charge-offs as
a percentage of average loans
outstanding for the period 0.05% 0.24% 0.38% 0.41% 0.38%
</TABLE>
NONPERFORMING ASSETS AND PAST DUE LOANS
The Company has policies, procedures and underwriting guidelines intended to
assist in maintaining the overall quality of its loan portfolio. The Company
monitors its delinquency levels for any adverse trends. During the past few
years, the Southeastern region of the country has experienced a general
improvement in the real estate loan market. In view of these market conditions,
management has closely monitored and will continue to monitor the Company's real
estate and commercial loan portfolio during 1997. Particular attention will be
focused on those credits targeted by the loan monitoring and review process.
Management's continued emphasis is to seek and maintain a relatively low level
of nonperforming assets and returning the current nonperforming assets to an
earning status.
11
<PAGE> 14
Nonperforming assets include nonperforming loans, renegotiated loans, foreclosed
real estate held for sale and foreclosed other personal property held for sale.
As of March 31, 1997, nonperforming assets were $2.2 million as compared to $2.4
million at December 31, 1996. The ratio of nonperforming assets to loans, net of
unearned income, other real estate and other nonperforming assets was 0.41% at
March 31, 1997, compared to 0.47% at December 31, 1996 and 0.47% at March 31,
1996.
Total nonperforming loans to total average loans decreased from 0.35% at
December 31, 1996, to 0.28% at March 31, 1997. Likewise, loans past due 90 days
or more as a percentage of total average loans decreased to 0.06% as of March
31, 1997, compared to 0.23% as of December 31, 1996. Management believes that
asset quality will remain strong throughout the remainder of 1997.
Net loans charged off during the first quarter of 1997 were $71,000 compared to
a $411,000 for the same period of 1996. Further detail of loan charge-offs and
recoveries is presented in the table "Allowance for Loan Losses."
NONPERFORMING ASSETS AND PAST DUE LOANS
(in thousands)
<TABLE>
<CAPTION>
--------------------------------------------------------
1997 1996
--------------------------------------------------------
Quarter Ending Mar 31 Dec 31 Sept 30 June 30 Mar 31
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Avg loans, net of unearned income $526,599 $503,599 $475,430 $461,337 $434,323
========================================================
Nonaccrual loans $ 1,488 $ 1,745 $ 1,618 $ 1,915 $ 1,160
Renegotiated or restructured loans 0 0 0 0 0
--------------------------------------------------------
Total nonperforming loans $ 1,488 $ 1,745 $ 1,618 $ 1,915 $ 1,160
Other real estate owned, net 670 561 421 480 840
Other non-performing assets 26 81 89 111 54
--------------------------------------------------------
Total nonperforming assets $ 2,184 $ 2,387 $ 2,128 $ 2,506 $ 2,054
========================================================
Loans 90 days or more past due
and still accruing $ 303 $ 1,139 $ 791 $ 1,265 $ 711
Total nonperforming loans as a
percentage of total loans 0.28% 0.35% 0.34% 0.42% 0.27%
Total nonperforming assets as a
percentage of total loans, ORE
and other nonperforming assets 0.41% 0.47% 0.45% 0.54% 0.47%
Loans 90 days past due as a
percentage of total loans 0.06% 0.23% 0.17% 0.27% 0.16%
</TABLE>
DEPOSITS
Total deposits increased $30.2 million, or 4.4% from $692.6 million at December
31, 1996 to $722.8 million at March 31, 1997. The increase is due primarily to
customers investing in time deposits and increases in large CD's. Total time
deposits increased $35.5 million from December 31, 1996 to March 31, 1997.
Noninterest bearing demand deposits decreased in the first quarter of
12
<PAGE> 15
1997 from December 31, 1996 by $5.3 million, or 4.2%. From December 31, 1996 to
March 31, 1997, interest bearing transaction accounts increased $4.9 million, or
4.1%, while money market accounts and savings accounts decreased $3.3 million,
or 7.6% and $2.7 million, or 2.4%, respectively.
Federal funds purchased and securities sold under agreements to repurchase
increased $712,000, or 1.1% from December 31, 1996 to March 31, 1997.
Counterparties to the agreements to repurchase are commercial account customers,
where excess funds from noninterest bearing checking accounts are transferred
nightly to a collateralized interest bearing repurchase account. These accounts
are not FDIC insured, therefore the Company collateralizes the deposits with
securities from the investment portfolio. For the quarter ended March 31, 1997,
none of the repurchased agreements were brokered. As of March 31, 1997, the
Company's federal funds purchased position was $9.2 million compared to $13.5
million as of December 31, 1996.
Regarding the Company's deposit mix, savings deposits and both interest bearing
and noninterest bearing transaction deposits accounted for 49.2%, 51.7% and
49.9% of total deposits at March 31, 1997, December 31, 1996 and March 31, 1996,
respectively. Large certificates of deposits, representing 10.6% of total
deposits, is higher than 8.1% at December 31, 1996 and 8.5% at March 31, 1996.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity is the ability of a company to convert assets into cash or cash
equivalents without significant loss and to raise additional funds by increasing
liabilities. Liquidity management involves maintaining the Company's ability to
meet the day-to-day cash flow requirements of its customers, whether they are
depositors wishing to withdraw funds or borrowers requiring funds to meet their
credit needs.
Net cash provided by operating activities for the three months ended March 31,
1997, totaled $2.2 million. For the same period, net cash used by investing
activities totaled $29.6 million consisting of proceeds from maturities and
sales of investment securities of $18.0 million, with cash outflows of $24.5
million in investment securities purchases, and a $16.3 million increase in
loans outstanding. Net cash provided by financing activities of $28.2 million
consisted of decreases in demand deposits, savings deposits and other borrowings
of $7.1 million. The payment of $865,000 in common stock dividends ($0.23 per
share) was funded from earnings. Management will stagger the purchases of
investment securities within a four year maturity horizon to provide sufficient
liquidity to the loan portfolio. Management does not anticipate any unexpected
funding needs in the near future that could not be satisfied with current cash
generated from investing activities.
Total stockholders' equity, adjusted for the unrealized appreciation on
securities available for sale, to total assets at March 31, 1997 and December
31, 1996 was 10.50% and 10.74%, respectively. The Company's book value per
share, decreased from $24.98 at December 31, 1996 to $24.90 at March 31, 1997.
The Company's Tier I risk based capital ratio, total risk based capital ratio
and leverage capital ratio at March 31, 1997 were 13.28%, 14.19% and 9.87%,
respectively, exceeding the fully phased-in required capital ratios of 4.00%,
8.00% and 3.00%, respectively. These ratios as
13
<PAGE> 16
of December 31, 1996, were 13.86%, 14.78% and 10.07%, respectively. Increased
regulatory activity in the financial industry as a whole will continue to impact
the structure of the industry; however, management does not anticipate any
negative impact on the capital resources or operations of the Company.
ASSET/LIABILITY MANAGEMENT
Interest Rate Sensitivity
Interest rate sensitivity is a function of the repricing characteristics of the
Company's portfolio of assets and liabilities. These repricing characteristics
are the time frames within which the interest bearing assets and liabilities are
subject to change in interest rates either at replacement, repricing or maturity
during the life of the instruments. Interest rate sensitivity management focuses
on repricing relationships of assets and liabilities during periods of changes
in market interest rates. Interest rate sensitivity is measured as the
difference between the volumes of assets and liabilities that are subject to
repricing at various time horizons. The following table illustrates the
Company's exposure to interest rate fluctuations as of March 31, 1997:
14
<PAGE> 17
INTEREST RATE SENSITIVITY ANALYSIS
as of March 31, 1997
(in thousands)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Over 3 Over 1
Months Year Non-
3 Months through through Over Interest
or less 12 Months 5 Years 5 Years Sensitive Total
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Interest Earning Assets:
Loans, net of unearned
income $ 185,125 $ 34,628 $ 270,720 $ 48,996 $ 539,439
Less: Allowance for
loan losses $ (6,153) (6,153)
--------------------------------------------------------------------------------------
Net loans $ 185,125 $ 34,628 $ 270,720 $ 48,996 $ (6,153) $ 533,286
Investment securities 26,099 40,691 125,195 65,494 257,479
Federal funds sold 6,100 6,100
--------------------------------------------------------------------------------------
Total earning assets $ 217,324 $ 75,319 $ 395,915 $ 114,490 $ (6,153) $ 796,865
Cash and other assets 100,670 100,670
--------------------------------------------------------------------------------------
Total assets $ 217,324 $ 75,319 $ 395,915 $ 114,490 $ 94,517 $ 897,535
======================================================================================
<CAPTION>
--------------------------------------------------------------------------------------
Over 3 Over 1
Months Year Non-
3 Months through through Over Interest
or less 12 Months 5 Years 5 Years Sensitive Total
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
STOCKHOLDERS'
EQUITY:
Interest Bearing
Liabilities:
Interest bearing demand
deposits $ 10,003 $ 15,005 $ 100,035 $ 125,043
Money market accts 7,945 15,891 15,891 39,727
Savings deposits 8,796 13,194 87,962 109,952
Other time deposits 98,194 117,567 35,142 $ 40 250,943
CD's of $100,000
or more 36,568 32,942 7,314 76,824
Federal funds purchased
and securities sold
under agreements
to repurchase 64,051 64,051
Other borrowings 10,000 10,000
--------------------------------------------------------------------------------------
Total interest bearing
liabilities $ 225,557 $ 204,599 $ 246,344 $ 40 $ 676,540
Non-interest bearing
demand deposits $ 120,278 $ 120,278
Other liabilities 7,103 7,103
Stockholders' equity 93,614 93,614
--------------------------------------------------------------------------------------
Total liabilities and
stockholders' equity $ 225,557 $ 204,599 $ 246,344 $ 40 $ 220,995 $ 897,535
======================================================================================
Interest sensitivity gap $ (8,233) $(129,280) $ 149,571 $ 114,450
Cumulative interest
sensitivity gap $ (8,233) $(137,513) $ 12,058 $ 126,508
Cumulative interest
sensitivity gap as a
percentage of
total earning assets (1.0)% (17.3)% 1.5% 15.9%
</TABLE>
15
<PAGE> 18
In analyzing the interest rate sensitivity at March 31, 1997, the Company is
liability sensitive in the less than twelve month categories in the amount of
$137.5 million. In the greater than one year categories, the Company is asset
sensitive in the amount of $264.0 million. Overall the Company is asset
sensitive in the amount of $126.5 million. During periods of increasing interest
rates, asset sensitivity would enable the Company to reprice earning assets
faster than interest bearing liabilities, therefore optimizing net interest
margins. During periods of decreasing interest rates, being asset sensitive
would narrow net interest margins, because interest earning assets would reprice
faster at lower rates before the repricing of the interest bearing liabilities.
Management maintains several interest rate risk models, regularly meets with the
Board of Directors to discuss asset/liability management issues and believes
this level of exposure to interest rate fluctuations to be acceptable.
NET INCOME
Net income for the three months ended March 31, 1997 increased $385,000, or
19.1% over the same period in 1996. Net income per share for the quarter
increased $0.10, or 19.1% to $0.637 per share compared to $0.535 per share for
the same period one year ago. Annualized return on average assets for the three
months ending March 31, 1997 was 1.10% as compared to 1.01% for 1996. The
annualized return on average equity for the first quarter of 1997 was 10.29%
compared to 8.99% for the same period in 1996.
NET INTEREST MARGIN
Net interest margin is the principal component of a financial institution's
income stream and represents the difference or spread between interest from
earning assets and the interest expense paid on deposits and other borrowed
funds. Fluctuations in interest rates as well as volume and mix changes in
earning assets and interest bearing liabilities can materially impact net
interest margin. The discussion of net interest margin is presented on a tax
equivalent basis, unless otherwise noted, to facilitate comparisons among
various taxable and tax-exempt assets.
The following table shows average balances, interest income and interest
expense, and yields/rates for the three months ending March 31, 1997 and 1996.
16
<PAGE> 19
CONSOLIDATED AVERAGE BALANCE SHEET
INTEREST INCOME/EXPENSE AND
YIELD/RATES
Taxable Equivalent Basis
(in thousands)
<TABLE>
<CAPTION>
Three months ended
March 31,
-------------------------------------------------------------------------------
Assets 1997 1996
-------------------------------------------------------------------------------
Average Income/ Yield/ Average Income/ Yield/
Earning assets: Balance Expense Rate Balance Expense Rate
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Loans, net of unearned income $ 526,599 $ 11,545 8.77% $ 434,323 $ 9,449 8.70%
Investment securities 245,649 4,004 6.52% 283,669 4,443 6.27%
Other earning assets 14,414 191 5.30% 6,856 94 5.48%
------------------------- -------------------------
Total earning assets $ 786,662 $ 15,740 8.00% $ 724,848 $ 13,986 7.72%
--------- ---------
Allowance for loan losses (5,943) (5,743)
Cash and other assets 90,174 80,294
--------- ---------
TOTAL ASSETS $ 870,893 $ 799,399
========= =========
Liabilities and Stockholders' Equity
Interest bearing liabilities:
Interest bearing demand deposits $ 122,731 $ 831 2.71% $ 119,266 $ 780 2.62%
Savings deposits 106,351 843 3.17% 88,152 584 2.65%
Time deposits 290,347 3,669 5.05% 276,655 3,630 5.25%
Time deposits of $100,000 or more 66,572 892 5.36% 51,477 704 5.47%
Federal funds purchased and securities
sold under agreement to repurchase 52,515 560 4.27% 44,044 484 4.40%
Other borrowings 10,000 132 5.28% 6,703 51 3.04%
------------------------- -------------------------
Total interest bearing liabilities $ 648,516 $ 6,927 4.27% $ 586,297 $ 6,233 4.25%
--------- ---------
Net interest spread $ 8,813 3.73% $ 7,753 3.47%
========= =========
Noninterest bearing demand deposits 120,907 114,686
Accrued expenses and other liabilities 8,389 8,899
Stockholders' equity 93,081 89,517
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 870,893 $ 799,399
========= =========
Net yield on earning assets 4.48% 4.28%
Taxable equivalent adjustment:
Loans $ 9 $ 38
Investment securities 465 472
--------- ---------
Total adjustment $ 474 $ 510
========= =========
</TABLE>
17
<PAGE> 20
The net yield on earning assets increased 20 basis points from the first quarter
of 1996 to the first quarter of 1997, 4.28% to 4.48%, respectively. The increase
resulted from changes in rates, volumes and mix of interest earning assets and
interest bearing liabilities. In addition, the average balance of noninterest
bearing demand deposits increased $6.2 million, or 5.4%. On a tax equivalent
basis, interest income on earning assets increased $1.8 million, or 12.5% due to
an increase of $61.8 million, or 8.5% in the average volume of interest earning
assets. As the rates earned on the loans and investment securities increased
marginally, the development of the mix of interest earning assets is the primary
factor of the improved yields and earning assets as a whole. The average
balances of loans increased $92.3 million, or 21.3%, while the average balance
of securities decreased $38.0 million, or 13.4% and the average balance of other
earning assets, primarily federal funds sold, increased $7.6 million, or 110.2%.
As a percentage of total earning assets, loans increased from 59.9% to 66.9%,
investment securities decreased from 39.1% to 31.2%, and other earning assets
increased from 1.0% to 1.9%, for the first quarter of 1996 and the first quarter
of 1997, respectively. Rates earned on loans increased seven basis points, while
rates earned on investment securities increased 25 basis points. The rates
earned on other earning assets decreased 18 basis points. The rate on total
earning assets increased 28 basis points due to the change in mix. Interest
expense on deposits increased $694,000, or 11.1% in the first quarter of 1997
compared to the same period last year. Average balances on interest bearing
liabilities increased by $62.2 million, or 10.6%. The average balances of
interest bearing demand deposits increased from first quarter of 1996 to first
quarter of 1997 by $3.5 million, or 2.9%. Savings accounts increased for the
same time periods by $18.2 million, or 20.7%. The rates paid on these type of
accounts during the three months ending March 31, 1997, and 1996, increased 9
and 52 basis points, for interest bearing demand deposits and savings deposits,
respectively. The average balance of time deposits, including time deposits over
$100,000, increased $28.8 million, or 8.8% and the rate paid decreased 17 basis
points. Net interest spread and net interest spread rate increased from first
quarter 1996 to first quarter 1997 by $1.1 million and 26 basis points,
respectively.
18
<PAGE> 21
NONINTEREST INCOME
Noninterest income consists of revenues generated from a broad range of
financial services and activities including fee-based services and commissions.
NONINTEREST INCOME
(in thousands)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
-------------------- Percent
1997 1996 Change
----------------------------------
<S> <C> <C> <C>
Service charge on deposit accounts $ 1,008 $ 837 20.43 %
Trust fees 383 313 22.36 %
Net securities gains realized (8) 7 (214.29)%
Other income 739 784 (5.74)%
----------------------------------
TOTAL $ 2,130 $ 1,941 9.74 %
==================================
</TABLE>
Service charges increased $171,000, or 20.4% for the three months ended March
31, 1997, as compared to the quarter ended March 31, 1996. Trust fees increased
$70,000, or 22.4% from the first quarter of 1996 compared to the first quarter
of 1997. Net securities losses of $8,000 were realized in the first quarter of
1997, compared to the gain of $7,000 realized in the same period of 1996. Other
noninterest income decreased $45,000, or 6.1% for the first quarter 1997
compared to the first quarter of 1996.
NONINTEREST EXPENSE
Salaries and benefits increased $407,000, or 12.2% for the three months ending
March 31, 1997, as compared to March 31, 1996. Occupancy expenses decreased
$82,000, or 15.4% due to increased rent income. Management anticipates the level
of spending for occupancy expense to follow closely with last years results.
Other expenses increased $315,000, or 13.9% over these same periods.
NONINTEREST EXPENSE
(in thousands)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
-------------------- Percent
1997 1996 Change
--------------------------------------
<S> <C> <C> <C>
Salaries and benefits $3,731 $3,324 12.24 %
Net occupancy expense 450 532 (15.41)%
Other expense 2,567 2,252 13.99 %
--------------------
TOTAL $6,748 $6,108 10.48 %
====================
</TABLE>
19
<PAGE> 22
PROVISION FOR INCOME TAXES
The Company's provision for income taxes increased $74,000, or 9.5% to $850,000
for the three months ended March 31, 1997, as compared to $776,000 for the same
period in 1996. The effective tax rate was 26.2% for the three months ended
March 31, 1997 as compared to 27.8% for March 31, 1996. The notes to the
financial statements provide additional information regarding the Company's
taxes.
20
<PAGE> 23
PART II
OTHER INFORMATION
ITEM 1. Legal Proceedings
None
ITEM 2. Change in Securities
None
ITEM 3. Defaults Upon Senior Securities
None
ITEM 4. Submission of Matters to a Vote of Security Holders
The annual meeting of Pioneer Bancshares, Inc. stockholders was held on
April 16, 1997 at the Chattanooga Trade Center. Only those items
disclosed within the Pioneer Bancshares, Inc. Proxy Statement were
voted.
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports on Form 8-K
(a) The exhibits filed as part of the Report are as follows:
Exhibit
Number Description
3(a) Certificate of Incorporation, incorporated herein by
reference from Registrant's Registration Statement on
Form S-4 (Registration No. 33-49360).
3(b) By-laws, incorporated herein by reference from
Registrant's Registration Statement on Form S-4
(Registration No. 33-49360)
11 Statement Re Computation of Per Share Earnings
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K.
None
21
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Pioneer Bancshares, Inc.
Date: May 13, 1997 /s/ Rodger B. Holley
--------------------
Rodger B. Holley
President and CEO
Date: May 13, 1997 /s/ Gregory B. Jones
--------------------
Gregory B. Jones
Executive Vice President and Treasurer
Date: May 13, 1997 /s/ Robert M. Wilbanks
----------------------
Robert M. Wilbanks, Jr.
Vice President and Controller
22
<PAGE> 25
PIONEER BANCSHARES, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description Page
<S> <C> <C>
3(a) Certificate of Incorporation, incorporated herein by reference
from Registrant's Registration Statement on Form S-4
(Registration No. 33- 49360).
3(b) By-laws, incorporated herein by reference from Registrant's
Registration Statement on Form S-4 (Registration No.
33-49360).
11 Statement Regarding Computation of Net Earnings per Share 24
27 Financial Data Schedule (SEC use only)
</TABLE>
23
<PAGE> 1
EXHIBIT 11
PIONEER BANCSHARES, INC.
Form 10-Q, Part II, Item 6
Exhibit 11 - Statement Regarding Computation of
Net Earnings Per Share
<TABLE>
<CAPTION>
For the three months ended March 31, 1997 1996
---- ----
<S> <C> <C>
Income as reported in consolidated
statements of income $2,396,000 $2,011,000
========== ==========
Per share computation of common and
dilutive common equivalent shares:
Weighted average number of
shares outstanding 3,759,912 3,759,912
Weighted average number of shares
issuable upon exercise of stock options
applying the treasury stock method 0 0
---------- ----------
Weighted average number of shares
outstanding used to calculate per share
data assuming no dilution 3,759,912 3,759,912
========== ==========
Net income per common and common
equivalent share $ 0.637 $ 0.535
========== ==========
Per share computation assuming full dilution:
Weighted average number of shares
outstanding 3,759,912 3,759,912
Weighted average number of shares
issuable upon exercise of stock options
applying the treasury stock method 0 0
---------- ----------
Weighted average number of shares
outstanding used to calculate per share
data assuming full dilution 3,759,912 3,759,912
========== ==========
Net income per common and common
equivalent share assuming full dilution $ 0.637 $ 0.535
========== ==========
</TABLE>
24
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF PIONEER BANCSHARES, INC. FOR THE THREE MONTHS PERIOD
ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1,000
<CASH> 58,383
<INT-BEARING-DEPOSITS> 602,489
<FED-FUNDS-SOLD> 6,100
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 203,274
<INVESTMENTS-CARRYING> 54,205
<INVESTMENTS-MARKET> 53,362
<LOANS> 541,163
<ALLOWANCE> 6,153
<TOTAL-ASSETS> 897,535
<DEPOSITS> 722,767
<SHORT-TERM> 0
<LIABILITIES-OTHER> 7,103
<LONG-TERM> 10,000
0
0
<COMMON> 19
<OTHER-SE> 93,595
<TOTAL-LIABILITIES-AND-EQUITY> 897,535
<INTEREST-LOAN> 11,525
<INTEREST-INVEST> 3,723
<INTEREST-OTHER> 7
<INTEREST-TOTAL> 15,265
<INTEREST-DEPOSIT> 6,235
<INTEREST-EXPENSE> 6,927
<INTEREST-INCOME-NET> 8,338
<LOAN-LOSSES> 466
<SECURITIES-GAINS> (8)
<EXPENSE-OTHER> 6,748
<INCOME-PRETAX> 3,246
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,396
<EPS-PRIMARY> .637
<EPS-DILUTED> .637
<YIELD-ACTUAL> 4.48
<LOANS-NON> 601
<LOANS-PAST> 303
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 274,098
<ALLOWANCE-OPEN> 5,758
<CHARGE-OFFS> 242
<RECOVERIES> 171
<ALLOWANCE-CLOSE> 6,153
<ALLOWANCE-DOMESTIC> 6,153
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
