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 June 30, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For transition period from ________ to ________
Commission File Number 0-20878
MNB BANCSHARES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 48-1120026
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
800 Poyntz Avenue, Manhattan, Kansas 66502
(Address of principal executive offices) (Zip Code)
(785) 565-2000
(Registrant's telephone number, including area code)
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 Registrant's classes
of common stock as of the latest practicable date: As of August 11, 1997, the
Registrant had outstanding 639,110 shares of its common stock, $.01 par
value per share.
<PAGE>
MNB BANCSHARES, INC.
Form 10-Q Quarterly Report
Table of Contents
PART I
Page Number
Item 1. Financial Statements and Related Notes 1 - 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6 - 11
PART II
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of
Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Form 10-Q Signature Page 13
<PAGE>
<TABLE>
MNB BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
June 30, December 31,
1997 1996
<S> <C> <C>
(Unaudited)
ASSETS
Cash and cash equivalents:
Cash $2,490,142 $2,670,159
Interest-bearing
deposits in other
financial institutions - 1,900,000
Total cash and cash
equivalents 2,490,142 4,570,159
Investment securities:
Held-to-maturity at
amortized
cost 7,117,997 10,113,010
(estimated fair value
of $7,156,000
and $10,154,000
respectively)
Available-for-sale at
estimated fair value 23,779,971 23,125,844
Loans, net 65,981,665 62,549,048
Premises and equipment,
net 1,352,822 1,325,798
Other assets 1,760,856 1,736,565
Total assets $102,483,453 $103,420,424
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $86,082,788 $86,709,950
Other borrowings 3,612,815 3,615,020
Accrued expenses,
taxes and other
liabilities 1,067,156 1,761,289
Total liabilities 90,762,759 92,086,259
Stockholders' equity:
Common stock, $.01 par,
1,500,000 shares authorized,
639,110 and 605,215 shares
issued and outstanding at 1997
and 1996, respectively 6,391 6,052
Additional paid in capital 7,103,581 6,321,016
Retained earnings 4,922,350 5,340,873
Unrealized gain (loss) on
investment securities available-
for-sale, net of tax 1,187 (18,756)
Unearned employee benefits (312,815) (315,020)
Total stockholders' equity 11,720,694 11,334,165
Total liabilities and
stockholders' equity $102,483,453 $103,420,424
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<TABLE>
MNB BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
<CAPTION>
For the six months
ended June 30,
1997 1996
<S> <C> <C>
Interest income:
Loans $2,889,774 $2,852,419
Investment securities 931,943 887,116
Other 69,710 87,634
Total interest income 3,891,427 3,827,169
Interest expense:
Deposits 1,910,908 1,917,295
Borrowed funds 103,528 109,507
Total interest expense 2,014,436 2,026,802
Net interest income 1,876,991 1,800,367
Provision for loan losses 30,000 -
Net interest income after
provision for loan losses 1,846,991 1,800,367
Noninterest income:
Fees and service charges 254,295 259,956
Gains on sale of loans 21,834 27,252
Gain (loss) on sale
of investments (6,884) (13,940)
Other 66,484 6,562
Total noninterest income 335,729 279,830
Noninterest expense:
Compensation and benefits 671,278 609,786
Occupancy and equipment 202,476 183,094
Federal deposit
insurance premiums 23,903 78,564
Data processing 51,862 65,229
Amortization 54,456 57,097
Advertising 41,997 35,908
Professional Fees 78,456 81,966
Stationery, printing and
office supplies 39,819 61,928
Other 300,115 288,629
Total noninterest expense 1,464,362 1,462,201
Earnings before income
taxes 718,358 617,996
Income tax expense 225,195 209,126
Net earnings $493,163 $408,870
Net earnings per share $ .74 $ 0.62
Dividends per share $ 0.25 $ 0.1281
Average common and common
equivalent shares outstanding 666,366 663,277
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
MNB BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
<CAPTION>
For the Three Months
Ended June 30,
1997 1996
<S> <C> <C>
Interest income:
Loans $1,485,061 $1,434,175
Investment securities 459,569 442,426
Other 32,055 30,968
Total interest income 1,976,685 1,907,569
Interest expense:
Deposits 960,747 933,821
Borrowed funds 51,650 64,461
Total interest expense 1,012,397 998,282
Net interest income 964,288 909,287
Provision for loan losses 15,000 -
Net interest income after
provision for loan losses 949,288 909,287
Noninterest income:
Fees and service charges 129,247 143,297
Gains on sale of loans 16,535 9,033
Loss on sale of
investment securities (6,884) (13,029)
Other 48,584 1,742
Total noninterest income 187,482 141,043
Noninterest expense:
Compensation and benefits 350,446 308,387
Occupancy and equipment 108,253 87,169
Federal deposit
insurance premiums 12,012 39,282
Data processing 25,061 41,429
Amortization 26,180 27,500
Advertising 31,841 14,456
Professional Fees 39,292 31,957
Stationery, printing and
office supplies 27,610 20,579
Other 158,794 155,632
Total noninterest expense 779,489 726,391
Earnings before income taxes 357,281 323,939
Income tax expense 106,775 88,978
Net earnings $250,506 $234,961
Net earnings per share $ 0.38 $ 0.35
Dividends per share $ 0.125 $ 0.0656
Average common and common
equivalent shares outstanding 666,489 663,443
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
MNB BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
For the Six Months
Ended June 30,
1997 1996
<S> <C> <C>
Net cash provided by
operating activities $ 32,547 $ 378,638
INVESTING ACTIVITIES
Net increase in loans (3,615,917) (2,803,292)
Maturities and prepayments of
investments held to maturity 2,986,250 4,012,148
Purchase of investment
held to maturity - (242,465)
Maturities and prepayments of
investments available for sale 2,125,156 2,392,148
Purchase of investments
available for sale (3,835,601) (8,799,063)
Proceeds from sale of
investment securities available
for sale 1,091,968 3,013,058
Proceeds from sales of other
real estate 52,677 -
Net cash used to purchase
insurance agency (30,000) -
Purchases of equipment and
building improvements (131,153) (75,850)
Net cash used in investing
activities (1,356,620) (2,503,316)
FINANCING ACTIVITIES
FHLB advances - 2,975,000
Net decrease in deposits (627,163) (1,791,228)
Net increase in securities sold
under agreement to repurchase - 200,000
Issuance of common stock under
stock option plan 31,306 -
Cash dividends paid on common
stock (160,087) (73,852)
Net cash provided by (used in)
financing activities (755,944) 1,309,920
Net decrease in cash and
cash equivalents (2,080,017) (814,758)
Cash and cash equivalents at
beginning of period 4,570,159 2,924,017
Cash and cash equivalents at
end of period $2,490,142 $2,109,259
Supplemental disclosure of cash flow information
Cash paid during period
for interest $2,060,330 $2,178,000
Cash paid during period
for taxes $300,899 $286,000
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
MNB BANCSHARES, INC. AND SUBSIDIARY
Notes to Condensed Consolidated Financial Statements
1. Interim Financial Statements
The condensed consolidated financial statements of MNB Bancshares, Inc. and
subsidiary have been prepared in accordance with the instructions to Form
10-Q. To the extent that information and footnotes required by generally
accepted accounting principles for complete financial statements are
contained in or consistent with the audited financial statements incorporated
by reference in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, such information and footnotes have not been duplicated
herein. In the opinion of management, all adjustments, consisting of normal
recurring accruals, considered necessary for a fair presentation of financial
statements have been reflected herein. The December 31, 1996 condensed
consolidated balance sheet has been derived from the audited balance sheet
as of that date. The results of the interim periods ended June 30, 1997 are
not necessarily indicative of the results expected for the year ended
December 31, 1997.
2. Earnings Per Share
Net earnings per share have been computed based on the average number of
shares and common equivalent shares outstanding during the period. All
periods presented herein reflect retroactive adjustment of the 5% stock
dividends declared by the Company on May 15, 1997 and August 12, 1996.
MNB BANCSHARES, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General. MNB Bancshares, Inc. (the "Company") is a bank holding company
incorporated under the laws of the State of Delaware and is engaged in the
banking business through its wholly-owned subsidiary, Security National Bank
(the "Bank"). The home office for the Bank is Manhattan, Kansas, with two
branches, one in Auburn, Kansas and one in Topeka, Kansas. The Company's
results of operations depend primarily on net interest income, which is the
difference between interest income from interest-earning assets and interest
expense on interest-bearing liabilities. The Company's operations are also
affected by non-interest income, such as service charges, loan fees and gains
and losses from the sale of newly originated loans. The Company's principal
operating expenses, aside from interest expense, consist of compensation and
employee benefits, occupancy costs, federal deposit insurance, data
processing, and provision for loan
losses.
Net earnings for the first six months of 1997 increased $84,293, or 20.6%,
to $493,163 compared to $408,870 for the first six months of 1996. Net
interest income, after provision for loan losses, increased $46,624 to
$1,846,991, or 2.6%. Noninterest income increased $55,899, or 20.0%
from $279,830 to $335,729, due to an increase in other noninterest income
of $59,922 from $6,562 to $66,484, or 913.2%, which included a gain on
the sale of real estate owned of $30,416. Non-interest expense increased
only $2,161, or 0.1%, to $1,464,362.
Net earnings for the second quarter of 1997 increased 6.5% to $250,506 in
comparison to the same period in 1996. Net interest income, after provision
for loan losses, showed an increase from $909,287 to $949,288, or 4.4%,
during this period. Noninterest income increased 32.9% to $187,482
compared to $141,043. This partially offset the increase in noninterest
expense of $53,098, or 7.3%.
Interest Income. Interest income increased 1.7% to $3.9 million compared
to $3.8 million during the first six months of 1996. Interest on loans
remained steady at $2.9 million while interest on investment securities
increased from $887,116 to $931,943, or 5.1%, while other interest
income decreased 20.5% to $69,710. Average loans outstanding have
increased approximately $2.6 million while the average rate has decreased
slightly. Interest earned on securities increased as securities matured
and were reinvested in securities yielding higher interest rates. The
decrease in interest income on other investments was a result of
decreased funds available for investment in short-term overnight interest-
bearing deposits.
Interest income for the second quarter of 1997 increased by $69,116, or
3.6%, compared to the same period of 1996. Interest on loans increased
as average loans outstanding increased $1.3 million over 1996. Interest
income on loans increased $50,886, or 3.5%, and investment securities
increased $17,143, or 3.9%, to $459,569. Other interest income increased
slightly to $32,055 or 3.5% from $30,968 in 1996. This was largely due
to an increase in the dividends paid on Federal Home Loan Bank (the "FHLB")
stock of $1,533.
Interest Expense. Compared to the same period a year earlier, interest
expense for the first half of 1997 decreased slightly, by $12,366, or 0.6%.
Deposit interest expense remained steady at $1.9 million. Interest expense on
borrowings, consisting of securities sold under agreements to repurchase and
advances from the FHLB declined $5,979, or 5.5%, during the same time period,
as these liabilities have been liquidated as they matured.
Interest expense for the second quarter of 1997 increased 1.4% to $1,012,397
from $998,282 in 1996. Deposit interest expense increased $26,926, or
2.9%, to $960,747. The increase in interest expense was due to increases in
interest rates on deposits and the decrease of $12,811, or 19.9%, in borrowed
funds was a result of liquidating borrowings as they matured.
Provision for Loan Losses. A provision for loan losses of $30,000 for the
first six months of 1997 was made, compared to none in 1996. After
management's quarterly review of the loan portfolio and an economic
analysis performed at the end of the third quarter in 1996, a provision
of $5,000 per month was resumed and continued during the first six months
of 1997. This was due to the expansion of the Company's commercial lending
activities. At the same time, expanded internal guidelines for credit risk
evaluation and documentation were created and implemented. These factors
will continue to be assessed and further provisions will be made if
circumstances warrant such provisions. At June 30, 1997, the allowance for
loan losses was $852,076, or 1.3% of gross loans outstanding, compared to
$832,706, or 1.3%, at June 30, 1996. The allowance for loan losses was
$819,660 at December 31, 1996, or 1.3% of gross loans outstanding.
Noninterest Income. Noninterest income increased $55,899, or 20.0%, for the
first six months of 1997. A slight decrease in fees and service charges for
deposits and loans along with a decrease in gains on sale of loans was offset
by an increase in other noninterest income. Fees and service charge income
decreased $5,661, or 2.2%, to $254,295 from $259,956, while gains on sale
of loans decreased $5,418 or 19.9% to $21,834 from $27,252. There was
a loss on sale of investment securities available for sale of $6,884 as the
Company sought to reposition its portfolio and lengthen its maturities.
Some lower-yield short term securities were sold and the proceeds reinvested
in intermediate term securities. The analysis done on this transaction
indicated the loss will be recovered by the fourth quarter of 1997. This
compares to a loss recorded in 1996 of $13,940, which the analysis indicated
would be income-neutral for 1996. The increase in other noninterest income
of $59,922, or 913.2%, to $66,484 included a gain on the sale of real estate
owned of $30,016, along with $9,250 in income for technical services
provided by the Company to a community service provider in Manhattan and
$9,337 in commission income from the insurance agency.
Noninterest income for the second quarter of 1997 increased 32.9% to
$187,482 compared to $141,043 for that quarter in 1996. Fees and service
charges decreased $14,050 or 9.8% to $129,247 due to overdraft income
decreasing $7,000 and fee income on loans decreasing $7,900 from 1996.
This decrease was partially offset by a gain on sale of loans of 83.1%
from $9,033 to $16,535. Additionally, the gain on the sale of real estate
owned of $30,016 occurred during the second quarter. The loss on sale of
investment securities of $6,884 was incurred during this quarter in 1997 as
part of the repositioning of the securities portfolio previously mentioned.
Commission income from the insurance agency was $3,437 for the quarter along
with technical service income of $3,162.
Noninterest Expense. Noninterest expense remained steady at $1.5 million
during the first six months of 1997. Decreases in the FDIC premiums from
$78,564 to $23,903, or 69.6%, stationery, printing and office supplies of
$22,109 or 35.7%, and data processing of $13,367 or 20.5% were offset by
increases in compensation of $61,492, or 10.1% from $609,786 to $671,278
and occupancy and equipment of 10.6% to $202,476 from $183,094. The
reduction in stationery, printing and office supplies was a result of the
costs incurred in connection with the change of name and consolidation of
the bank subsidiaries on December 31,1995. The decrease in data processing
was also a result of the consolidation of subsidiaries. The increase in
compensation and occupancy and equipment was due in large part to the new
branch facility opened in Topeka in May of this year. Other expenses
increased $11,486, or 4.0%, to $300,115.
Total noninterest expense increased 7.3% to $779,489 for the second quarter
of 1997. Occupancy and equipment expenses increased $21,804, or 24.2%, as a
result of the opening of the branch facility in Topeka, along with
professional fees and stationery, printing and office supplies which
increased $7,335 and $7,031, respectively. These increases were offset by
decreases in the FDIC premium of $27,270 or 69.4%, and data processing of
$16,368, or 39.5%. Compensation and benefits increased 13.6% to $350,446
and other expenses increased $3,162 or 2.0% to $158,794.
Asset Quality and Distribution. The Company's total assets were $102.5
million at June 30, 1997 compared to $103.4 million at December 31, 1996.
The Company's primary ongoing sources of funds are deposits, proceeds from
principal and interest payments on loans and investment securities, and
proceeds from the sale of mortgage loans and investment securities. While
maturities and scheduled amortization of loans are a predictable source of
funds, deposit flows and mortgage prepayments are greatly influenced by
general interest rates, economic conditions, competition, and the
restructuring of the financial services industry.
The primary investing activities of the Company are the origination of loans
and the purchase of investment securities. During the first six months of
1997, the Company originated mortgage loans in the amount of $9.5 million
compared to $16.0 million during the first six months of 1996. Generally,
the Company originates fixed rate residential mortgage loans for immediate
sale and does not warehouse loans to speculate on interest rates. During the
first six months of 1997, the Company originated consumer and commercial
non-mortgage loans of $12.7 million compared to $5.7 million during the same
time period for 1996.
Management believes that the quality of the loan portfolio continues to be
strong as evidenced by the small number and amount of loans past due 30
days or more. As of June 30, 1997, six real estate loans were more than 30
days past due, with a total balance of $440,163, which was 0.7% of total loans
outstanding. Additionally, five residential mortgage loans totaling $86,204
were on non-accrual status as of June 30, 1997. Excluding guaranteed student
loans, there were five consumer loans in the amount of $23,229, or less than
0.1% of the total loan portfolio, over 30 days past due with two loans totaling
$409 on non-accrual. Two commercial loans totaling $43,265 or 0.1% of the
total portfolio, were 30 days or more past due, with two loans totaling
$82,394 on non-accrual. At June 30, 1997, the Company had outstanding loan
commitments of $6.9 million. The Company believes sufficient funds will be
available to meet existing loan commitments.
During the six months ended June 30, 1997, the Company purchased securities
available for sale in the amount of $3.8 million. These activities were
funded primarily by deposits, proceeds from the sale of fixed rate mortgage
loans totaling $3.5 million and maturing securities.
Liability Distribution. At June 30, 1997, total deposits had a net decrease
of $.6 million from December 31, 1996, with borrowings remaining steady at
$3.6 million.
Checking and NOW accounts at the end of the first six months of 1997 were
20.7% of deposits and totaled $17.8 million compared to 24.0% and $20.4
million at December 31, 1996. This decrease was the result of a large
public funds deposit account having $2.0 million less on deposit at June 30,
1997 compared to December 31, 1996. Money market deposit accounts were
18.0% of the deposit portfolio and totaled $15.5 million, compared to 15.9%
and $13.8 million at December 31, 1996. Certificates of deposit were
$47.7 million, or 55.4% of the portfolio compared to $47.4 million, or
54.6% at December 31, 1996.
Liquidity. The Company's most liquid assets are cash and cash equivalents
and investment securities available for sale. The level of these assets are
dependent on the Company's operating, financing, lending and investing
activities during any given period. At June 30, 1997, and December 31, 1996,
these liquid assets totaled $26.3 million and $27.7 million, respectively.
During periods in which the Company is not able to originate a sufficient
amount of loans and/or periods of high principal prepayments, the Company
increases its liquid assets by investing in short-term U.S. Government
and agency securities.
Liquidity management is both a daily and long-term function of management's
strategy. Excess funds are generally invested in short-term investments. In
the event the Company requires funds beyond its ability to generate them
internally, additional funds are available through the use of FHLB advances,
a line of credit with the FHLB or through sales of securities. At June 30,
1997, the Company had outstanding FHLB advances of $2.5 million and $.8 million
outstanding on its $12.0 million line of credit with the FHLB.
Additionally, the Company has guaranteed a loan made to the Company's
Employee Stock Ownership Plan (the "ESOP"), with an outstanding balance of
$312,815 at June 30, 1997, to fund the ESOP's purchase of shares in the
Company's 1993 common stock offering. The total of these borrowings by the
Company was approximately $3.6 million at June 30, 1997.
Capital. The Federal Reserve Board has established capital requirements for
bank holding companies which generally parallel the capital requirements for
national banks under the Office of the Comptroller of the Currency (the
"OCC") regulations. The regulations provide that such standards will
generally be applied on a bank-only basis (rather than a consolidated basis)
in the case of a bank holding company with less than $150 million in total
consolidated assets, such as the Company. The Company's total capital of
$11.7 million is, however, well in excess of the Federal Reserve Board's
consolidated capital requirements.
At June 30, 1997, the Bank continued to maintain a sound Tier 1 capital
ratio of 8.99% and a risk based capital ratio of 16.21%. As shown by the
following table, the Bank's capital exceeded the minimum capital
requirements: (dollars in thousands)
<TABLE>
<CAPTION>
June 30, 1997
Amount Percent Required
<S> <C> <C> <C>
Tier 1 Capital $9,171 8.99% 3.0%
Risk Based Capital 9,879 16.21% 8.0%
</TABLE>
Banks and bank holding companies are generally expected to operate at or
above the minimum capital requirements. The above ratios are well in excess
of regulatory minimums and should allow the Company to operate without
capital adequacy concerns. The Federal Deposit Insurance Corporation
Improvement Act of 1991 established a bank rating system based on the capital
levels of banks. The Bank is rated "well capitalized", which is the highest
rating available under this capital-based rating system.
Recent Accounting Developments. In February, 1997, the Financial Accounting
Standards Board issued Statement No. 128, "Earnings Per Share" which revised
the calculation and presentation provisions of Accounting Principles Board
Opinion 15 and related interpretations. Statement No. 128 is effective for
the Company's fiscal year ending December 31, 1997. Retroactive
application will be required. The Company believes the adoption of
Statement No. 128 will not have a significant effect on its reported
earnings per share.
The Company adopted SFAS 125 in January, 1997, and the effect was immaterial.
The adoption of SFAS 127 is not expected to have a material effect on the
financial statements.
Recent Regulatory Developments. The Committee on Banking and Financial
Services of the U.S. House of Representatives has approved legislation that
would allow bank holding companies to engage in a wider range of nonbanking
activities, including greater authority to engage in securities and insurance
activities. The expanded powers generally would be available to a bank
holding company only if the bank holding company and its bank subsidiaries
remain well-capitalized and well-managed, and if each of the depository
institution subsidiaries of the bank holding company had received at least a
'satisfactory' rating under the Community Reinvestment Act. The proposed
legislation would also impose various restrictions on transactions between
the depository institution subsidiaries of bank holding companies and their
nonbank affiliates. These restrictions are intended to protect the
depository institutions from the risks of the new nonbanking activities
permitted to such affiliates. At this time, the Company is unable to
predict whether the proposed legislation may have any impact on the
operations of the Company and its subsidiaries.
Safe Harbor Statement Under the Private Securities Litigation Reform Act
of 1995. This quarterly 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 Report 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 effect on 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 investment portfolios, demand for
loan products, deposit flows, competition, demand for financial services in
the Company's market area 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.
MNB BANCSHARES, INC. AND SUBSIDIARY
PART II
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the Company or its
subsidiary are a party other than ordinary routine litigation incidental to
their respective businesses.
ITEM 2. CHANGES IN SECURITIES.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.
On May 19, 1997, the annual meeting of stockholders was held. At the
meeting, Susan E. Roepke and Donald J. Wissman were
elected to serve as Class II directors with terms expiring in 2000.
Continuing as Class I directors (term expires in 1999) are
Patrick L. Alexander, Joseph L. Downey, Rolla W. Goodyear, and
Jerry R. Pettle; and continuing as Class III directors (term expires in
1998) are Brent A. Bowman, Charles D. Green, and Vernon C. Larson.
The stockholders ratified the appointment of KPMG Peat Marwick LLP as the
Company's independent public accountants for the year ending December 31,
1997.
There were 608,839 issued and outstanding shares of Common Stock at the time
of the annual meeting. The voting on the above-described at the annual
meeting was as follows:
<TABLE>
<CAPTION>
For Withheld
<S> <C> <C>
Election of Directors
Susan E. Roepke 505,406 28
Donald J. Wissman 505,434 0
</TABLE>
<PAGE>
MNB BANCSHARES, INC. AND SUBSIDIARY
PART II (continued)
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
A. Exhibits
Exhibit 27. Financial Data Schedule
B. Reports on Form 8-K
None.
<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.
MNB BANCSHARES, INC.
Date: August 11, 1997 /s/Patrick L. Alexander
President and Chief Executive Officer
Date: August 11, 1997 /s/Susan E. Roepke
Vice President, Secretary,
Treasurer and Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NUMBER
27 Financial Data Schedule 16
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,490,142
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 23,779,971
<INVESTMENTS-CARRYING> 7,117,997
<INVESTMENTS-MARKET> 7,156,000
<LOANS> 65,981,665
<ALLOWANCE> 851,345
<TOTAL-ASSETS> 102,483,453
<DEPOSITS> 86,082,788
<SHORT-TERM> 3,300,000
<LIABILITIES-OTHER> 1,067,156
<LONG-TERM> 312,815
0
0
<COMMON> 6,391
<OTHER-SE> 12,027,118
<TOTAL-LIABILITIES-AND-EQUITY> 102,483,453
<INTEREST-LOAN> 2,889,774
<INTEREST-INVEST> 931,943
<INTEREST-OTHER> 69,710
<INTEREST-TOTAL> 3,891,427
<INTEREST-DEPOSIT> 1,910,908
<INTEREST-EXPENSE> 2,014,436
<INTEREST-INCOME-NET> 1,876,991
<LOAN-LOSSES> 30,000
<SECURITIES-GAINS> 6,884
<EXPENSE-OTHER> 1,464,362
<INCOME-PRETAX> 718,358
<INCOME-PRE-EXTRAORDINARY> 718,358
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 493,163
<EPS-PRIMARY> 0.74
<EPS-DILUTED> 0.74
<YIELD-ACTUAL> 3.78
<LOANS-NON> 169,006
<LOANS-PAST> 261,200
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 819,660
<CHARGE-OFFS> 2,100
<RECOVERIES> 3,785
<ALLOWANCE-CLOSE> 851,345
<ALLOWANCE-DOMESTIC> 843,850
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 7,495
</TABLE>
