UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
For the transition period from ________to________
Commission File Number: 0-23636
EXCHANGE NATIONAL BANCSHARES, INC.
(Exact name of small business issuer as specified in its charter)
MISSOURI 43-1626350
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
132 EAST HIGH STREET, JEFFERSON CITY, MISSOURI 65101
(Address of principal executive offices)
(573) 761-6100
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act
during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
[X] Yes [ ] No
As of November 1, 1996, the registrant had 718,511 shares of
common stock, par value $1.00 per share, outstanding.
Transitional Small Business Disclosure Format:
[ ] Yes [X] No
Page 1 of 28 pages
Index to Exhibits located on page 27
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
_____________ ____________
<S> <C> <C>
ASSETS
Loans, net of unearned income:
Commercial $ 40,329,413 38,354,883
Real estate -- construction 17,833,051 11,740,275
Real estate -- mortgage 77,678,152 73,029,300
Consumer 33,993,514 31,214,677
Bankers acceptances 7,678,374 --
____________ ____________
177,512,504 154,339,135
Less allowance for loan losses 2,297,721 2,179,009
____________ ____________
Loans, net 175,214,783 152,160,126
____________ ____________
Investments in debt and
equity securities:
Held-to-maturity, estimated
market value of $24,696,808
at September 30, 1996 and
$19,923,718 at
December 31, 1995
24,782,522 19,925,266
Available-for-sale, at estimated
market value 53,030,869 48,581,631
____________ ____________
Total investments in debt
and equity securities 77,813,391 68,506,897
____________ ____________
Federal funds sold 12,500,000 18,000,000
Cash and due from banks 14,101,587 12,057,476
Premises and equipment 3,154,213 2,573,168
Accrued interest receivable 2,660,222 2,327,623
Deferred income taxes 732,379 513,690
Other assets 1,187,719 1,201,296
____________ ____________
$287,364,294 257,340,276
============ ============
</TABLE>
Continued on next page
<PAGE>
<TABLE>
EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARY
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
1996 1995
____________ ____________
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits $ 35,486,128 32,033,568
Time deposits 187,945,430 174,781,745
____________ ____________
Total deposits 223,431,558 206,815,313
Securities sold under agreements
to repurchase 19,793,205 10,137,869
Interest-bearing demand notes to
U.S. Treasury 1,997,709 278,012
Accrued interest payable 1,028,047 910,365
Other liabilities 1,214,675 843,531
____________ ____________
Total liabilities 247,465,194 218,985,090
____________ ____________
Stockholders' equity:
Common Stock - $1 par value;
1,500,000 shares authorized;
718,511 issued and outstanding 718,511 718,511
Surplus 1,281,489 1,281,489
Undivided profits 38,135,829 36,219,553
Unrealized holding gains (losses)
on investments in debt and
equity securities
available-for-sale (236,729) 135,633
____________ ____________
Total stockholders' equity 39,899,100 38,355,186
____________ ____________
$287,364,294 257,340,276
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
<TABLE>
EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARY
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
_______________________ ______________________
1996 1995 1996 1995
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
Interest income $ 5,130,040 4,616,256 14,973,710 13,891,621
Interest expense 2,488,519 2,130,743 7,249,168 6,421,373
___________ ___________ ___________ ___________
Net interest
income 2,641,521 2,485,513 7,724,542 7,470,248
Provision for
loan losses 80,000 45,000 305,000 220,000
___________ ___________ ___________ ___________
Net interest income
after provision for
loan losses 2,561,521 2,440,513 7,419,542 7,250,248
Noninterest income 480,644 421,064 1,346,552 1,246,220
Noninterest
expense 1,595,043 1,436,673 4,580,494 4,471,722
___________ ___________ ___________ ___________
Income before
income taxes 1,447,122 1,424,904 4,185,600 4,024,746
Income taxes 475,000 470,000 1,364,000 1,308,000
___________ ___________ ___________ ___________
Net income $ 972,122 954,904 2,821,600 2,716,746
=========== =========== =========== ===========
Earnings per
common share $1.36 1.33 3.93 3.78
===== ===== ===== =====
Dividends per share:
Declared $0.44 0.38 1.26 1.09
===== ===== ===== =====
Paid $0.44 0.38 1.20 1.04
===== ===== ===== =====
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
<TABLE>
EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARY
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
_________________________
1996 1995
___________ ___________
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,821,600 2,716,746
Adjustments to reconcile net
income to net cash provided by
operating activities:
Provision for loan losses 305,000 220,000
Depreciation expense 219,822 244,505
Net amortization of debt securities
premiums and discounts 92,625 225,037
Gain on calls of debt securities -- (4,502)
Increase in accrued interest
receivable (332,599) (85,308)
Decrease in other assets 13,577 24,757
Increase in accrued interest payable 117,682 181,795
Increase in other liabilities 371,144 205,262
Other, net (83,521) (173,961)
Origination of mortgage loans
for sale (16,046,756) (13,935,922)
Proceeds from the sale of
mortgage loans held for sale 16,046,756 13,935,922
___________ ___________
Net cash provided by operating
activities 3,525,330 3,554,331
___________ ___________
Cash flows from investing activities:
Net increase in loans (24,527,552) (7,592,286)
Purchases of held-to-maturity
debt securities (7,546,904) (32,969,264)
Purchases of available-for-sale
debt securities (41,081,613) (7,155,476)
Proceeds from maturities of
debt securities:
Held-to-maturity 2,454,937 37,257,460
Available-for-sale 34,483,410 9,702,016
Proceeds from calls of
debt securities:
Held-to-maturity 200,000 3,085,200
Available-for-sale 1,500,000 2,000,000
Purchase of Federal Home Loan
Bank stock -- (788,400)
Purchases of premises and equipment (800,867) (114,669)
Proceeds from disposition of
premises and equipment -- 19,613
Proceeds from sales of other real
estate owned and repossessions 1,208,305 676,838
___________ ___________
Net cash (used in) provided by
investing activities (34,110,284) 4,121,032
___________ ___________
</TABLE>
Continued on next page
<PAGE>
<TABLE>
EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARY
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
NINE MONTHS ENDED
SEPTEMBER 30,
_________________________
1996 1995
___________ ___________
<S> <C> <C>
Cash flows from financing activities:
Net increase (decrease) in
demand deposits 3,452,560 (6,878,409)
Net increase (decrease) in
interest-bearing transaction
accounts 1,978,031 (6,692,116)
Net increase in time deposits 11,185,654 7,887,479
Net increase (decrease) in
securities sold under agreements
to repurchase 9,655,336 (8,465,115)
Net increase in interest-bearing
demand notes to U.S. Treasury 1,719,697 2,162,112
Cash dividends paid (862,213) (747,252)
___________ ___________
Net cash provided by (used in)
financing activities 27,129,065 (12,733,301)
___________ ___________
Net decrease in cash and
cash equivalents (3,455,889) (5,057,938)
Cash and cash equivalents,
beginning of period 30,057,476 33,884,541
___________ ___________
Cash and cash equivalents,
end of period $26,601,587 28,826,603
=========== ===========
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Cash paid during period for:
Interest $ 7,131,486 6,239,578
Income taxes 1,402,955 1,502,146
Other real estate and repossessions
acquired in settlement of loans 1,225,292 589,110
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Nine Months Ended September 30, 1996 and 1995
Exchange National Bancshares, Inc. ("Bancshares" or the
"Company") is a bank holding company registered under the Bank
Holding Company Act of 1956. Bancshares' activities currently
are limited to ownership of the outstanding capital stock of The
Exchange National Bank of Jefferson City, a national banking
association.
Earnings per share amounts are based on 718,511 weighted
average shares outstanding for the three and nine month periods
ended September 30, 1996 and 1995.
On January 1, 1996 the Company adopted on a prospective basis
the Financial Accounting Standards Board (FASB) Statement of
Financial Accounting Standards No. 122, "Accounting for Mortgage
Servicing Rights, an amendment of FASB Statement No. 65" (SFAS
122). SFAS 122 requires that a mortgage banking enterprise
recognize as separate assets rights to service mortgage loans for
others; however those servicing rights are acquired. A mortgage
banking enterprise that acquires mortgage servicing rights
through either the purchase or origination of mortgage loans and
sells or securitizes those loans with servicing rights retained
should allocate the total cost of the mortgage loans to the
mortgage servicing rights and the loans (without mortgage
servicing rights) based on their relative fair values, if it is
practicable to estimate those fair values. If it is not
practicable to estimate the fair values of the mortgage servicing
rights and the mortgage loans (without the mortgage servicing
rights), the entire cost of purchasing or originating the loans
should be allocated to the mortgage loans (without mortgage
servicing rights) and no cost should be allocated to the mortgage
servicing rights. SFAS 122 also requires that a mortgage banking
enterprise assess its capitalized mortgage servicing rights for
impairment based on the fair value of those rights. The
Company's mortgage banking activities consist of offering
qualified borrowers loans conforming to standards required by the
secondary market. Those loans are not funded until the Company
has a non-recourse purchase commitment for each individual loan
from the secondary market at a predetermined price. As such
amounts are immaterial, the Company is allocating the entire cost
of originating those individual loans to the mortgage loans
(without mortgage servicing rights) and no cost is being
allocated to the mortgage servicing rights. During the first
nine months of 1996 the Company originated and sold 231
individual mortgage loans with a total principal balance of
$16,046,756.
On June 28, 1996, the FASB issued Statement of Financial
Accounting Standards No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities"
(SFAS 125). SFAS 125 provides accounting and reporting standards
for transfers and servicing of financial assets and
extinguishments of liabilities based on consistent application of
a <PAGE> financial-components approach that focuses on control. It
distinguishes transfers of financial assets that are sales from
transfers that are secured borrowings. Under the financial-
components approach, after a transfer of financial assets, an
entity recognizes all financial and servicing assets it controls
and liabilities it has incurred and derecognizes assets it no
longer controls and liabilities that have been extinguished. The
financial-components approach focuses on the assets and
liabilities that exist after the transfer. Many of these assets
and liabilities are components of financial assets that existed
prior to the transfer. If a transfer does not meet the criteria
for a sale, the transfer is accounted for as a secured borrowing
with pledge of collateral.
SFAS 125 extends the "available-for-sale" or "trading"
approach in SFAS 115 to nonsecurity financial assets that can
contractually be prepaid or otherwise settled in such a way that
the holder of the asset would not recover substantially all of
its recorded investment. Thus, nonsecurity financial assets (no
matter how acquired) such as loans, other receivables,
interest-only strips or residual interests in securitization
trusts (for example, tranches subordinate to other tranches, cash
reserve accounts or rights to future interest from serviced
assets that exceed contractually specified servicing fees) that
are subject to prepayment risk that could prevent recovery of
substantially all of the recorded amount are to be reported at
fair value with the change in fair value accounted for depending
on the asset's classification as "available-for-sale" or
"trading." SFAS 125 also amends SFAS 115 to prevent a security
from being classified as held-to-maturity if the security can be
prepaid or otherwise settled in such a way that the holder of the
security would not recover substantially all of its recorded
investment.
SFAS 125 requires that a liability be derecognized if and
only if either (a) the debtor pays the creditor and is relieved
of its obligation for the liability or (b) the debtor is legally
released from being the primary obligor under the liability
either judicially or by the creditor. Therefore, a liability is
not considered extinguished by an in-substance defeasance.
SFAS 125 provides implementation guidance for accounting for
(1) securitizations, (2) transfers of partial interests, (3)
servicing of financial assets, (4) securities lending
transactions, (5) repurchase agreements including "dollar
rolls", (6) "wash sales," (7) loan syndications and
participations, (8) risk participations in banker's acceptances,
(9) factoring arrangements, (10) transfers of receivables with
recourse, (11) transfers of sales-type and direct financing lease
receivables, and (12) extinguishments of liabilities.
SFAS 125 is effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring
after December 31, 1996, and is to be applied prospectively.
Earlier or retroactive application is not permitted. Also, the
extension of the SFAS 115 approach to certain nonsecurity
financial assets and the amendment to SFAS 115 if effective for
financial assets held on or acquired after January 1, 1997.
Reclassifications that are necessary because of the amendment do
not call into question an entity's intent to hold other debt
securities to maturity in the future. Management is currently
reviewing SFAS 125 to determine the effect it will have on the
financial position of the Company.
<PAGE>
The accompanying condensed consolidated financial statements
include all adjustments which in the opinion of management are
necessary in order to make those statements not misleading.
Certain amounts in the 1995 condensed consolidated financial
statements have been reclassified to conform with the 1996
condensed consolidated presentation. Such reclassifications have
no effect on previously reported net income. Operating results
for period ended September 30, 1996 are not necessarily
indicative of the results that may be expected for the year
ending December 31, 1996.
It is suggested that these condensed consolidated interim
financial statements be read in conjunction with the Company's
audited consolidated financial statements included in its 1995
Annual Report to Shareholders under the caption "Consolidated
Financial Statements" and incorporated by reference into its
Annual Report on Form 10-KSB for the year ended December 31, 1995
as Exhibit 13.
Item 2. Management's Discussion and Analysis
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE
STATEMENTS MADE IN THIS REPORT ON FORM 10-QSB ARE FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S
ACTUAL RESULTS, FINANCIAL CONDITION OR BUSINESS COULD DIFFER
MATERIALLY FROM ITS HISTORICAL RESULTS, FINANCIAL CONDITION OR
BUSINESS, OR THE RESULTS OF OPERATIONS, FINANCIAL CONDITION OR
BUSINESS CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS.
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES
INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED UNDER THE
CAPTION "FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS,
FINANCIAL CONDITION OR BUSINESS," IN THE COMPANY'S QUARTERLY
REPORT ON FORM 10-QSB FOR THE PERIOD ENDED JUNE 30, 1996 AS WELL
AS THOSE DISCUSSED ELSEWHERE IN THE COMPANY'S REPORTS FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION.
Net income for the three months ended September 30, 1996 of
$972,000 increased $17,000 when compared to the third quarter of
1995. Earnings per common share for the third quarter of 1996 of
$1.36 increased 3 cents or 2.3% when compared to the third
quarter of 1995. Net income for the nine months ended September
30, 1996 of $2,822,000 increased $105,000 when compared to the
first nine months of 1995. Earnings per common share for the
nine months ended September 30, 1996 of $3.93 increased 15 cents
or 4.0% when compared to the first nine months of 1995.
<PAGE>
The following table provides a comparison of fully taxable
equivalent earnings, including adjustments to interest income and
tax expense for interest on tax-exempt loans and investments.
<TABLE>
<CAPTION>
(DOLLARS EXPRESSED IN THOUSANDS)
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
_______________ _______________
1996 1995 1996 1995
_______ _______ _______ _______
<S> <C> <C> <C> <C>
Interest income $ 5,130 4,616 14,974 13,892
Fully taxable equivalent
(FTE) adjustment 93 89 273 266
_______ _______ _______ _______
Interest income (FTE basis) 5,223 4,705 15,247 14,158
Interest expense 2,488 2,130 7,249 6,421
_______ _______ _______ _______
Net interest income
(FTE basis) 2,735 2,575 7,998 7,737
Provision for loan losses 80 45 305 220
_______ _______ _______ _______
Net interest income after
provision for loan
losses (FTE basis) 2,655 2,530 7,693 7,517
Noninterest income 480 421 1,347 1,246
Noninterest expense 1,595 1,437 4,581 4,472
_______ _______ _______ _______
Earnings before income taxes
(FTE basis) 1,540 1,514 4,459 4,291
_______ _______ _______ _______
Income taxes 475 470 1,364 1,308
FTE adjustment 93 89 273 266
_______ _______ _______ _______
Income taxes (FTE basis) 568 559 1,637 1,574
_______ _______ _______ _______
Net income $ 972 955 2,822 2,717
======= ======= ======= =======
</TABLE>
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS
ENDED SEPTEMBER 30, 1995
Net interest income on a fully taxable equivalent basis
increased $160,000 or 6.2% to $2,735,000 or 4.13% of average
earning assets for the third quarter of 1996 compared to
$2,575,000 or 4.30% of average earning assets for the same period
of 1995. The provision for possible loan losses for the three
months ended September 30, 1996 was $80,000 compared to $45,000
for the same period of 1995.
<PAGE>
Noninterest income and noninterest expense for the three
month periods ended September 30, 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
(DOLLARS EXPRESSED IN THOUSANDS)
THREE MONTHS
ENDED
SEPTEMBER 30, INCREASE (DECREASE)
________________ __________________
1996 1995 Amount %
_______ _______ ________ ________
<S> <C> <C> <C> <C>
NONINTEREST INCOME
Service charges on
deposit accounts $ 180 163 17 10.4 %
Trust department income 75 42 33 78.6
Mortgage loan servicing
fees 74 70 4 5.7
Gain on sales of mortgage
loans 25 36 (11) (30.6)
Credit card fees 89 78 11 14.1
Other 37 32 5 15.6
_______ _______ _______
$ 480 421 59 14.0 %
======= ======= =======
NONINTEREST EXPENSE
Salaries, wages, and
employee benefits $ 850 789 61 7.7 %
Occupancy expense 86 78 8 10.3
Furniture and equipment
expense 112 109 3 2.8
FDIC insurance assessment 1 (12) 13 108.3
Advertising and promotion 132 52 80 153.8
Postage, printing, and
supplies 88 82 6 7.3
Legal, examination, and
professional fees 42 63 (21) (33.3)
Credit card expenses 77 73 4 5.5
Credit investigation
and loan collection
expenses 33 25 8 32.0
Other 174 178 (4) (2.2)
_______ _______ _______
$ 1,595 1,437 158 11.0 %
======= ======= =======
</TABLE>
Noninterest income increased $59,000 or 14.0% to $480,000 for
the third quarter of 1996 compared to $421,000 for the same
period of 1995 due primarily to increases in trust department
income, service charges on deposit accounts, and credit card
fees, which were offset in part by a decrease in gain on sales of
mortgage loans. The increase in trust department income
reflected a combination of an increase in fees charged, growth in
the market value of assets managed, and an increase in volume of
estate distribution fees. The growth in service charges on
deposit accounts and credit card fees both reflected increased
volume. Gains on sales of mortgage loans decreased $11,000 due
to a decrease in volume of loans originated and sold to the
secondary market from approximately $5,100,000 for the third
quarter of 1995 to approximately $3,900,000 for the third quarter
of 1996.
Noninterest expense increased $158,000 or 11.0% to $1,595,000
for the third quarter of 1996 compared to $1,437,000 for the
third quarter of 1995 due primarily to increases in advertising
and promotion and salaries, wages, and <PAGE> employee benefits. The
increase in advertising and promotion reflected increased costs
associated with a new logo and a special advertising program plus
the fact that such expenses were reduced in the third quarter of
1995 while the new program was being developed. It is presently
anticipated that advertising and promotion costs for the fourth
quarter of 1996 will be significantly lower than the amount
reported for the third quarter of 1996. The increase in
salaries, wages, and employee benefits reflected a combination of
increases in non-officer employee salaries to respond to local
market conditions, officer merit increases of approximately 4.1%,
increases in profit sharing and pension expense, and increased
payroll taxes. The increase in FDIC insurance assessment
reflects the fact that a credit for a prior over assessment was
received in the third quarter of 1995. The Company is currently
assessed at the minimum assessment level of $500 per quarter.
Income taxes as a percentage of earnings before income taxes
as reported in the condensed consolidated financial statements
was 32.8% for the third quarter of 1996 compared to 33.0% for the
third quarter of 1995. After adding a fully taxable equivalent
adjustment to both income taxes and earnings before income taxes
for tax exempt income on loans and investment securities, the
fully taxable equivalent ratios of income taxes as a percentage
of earnings before income taxes were 36.9% for both periods.
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS
ENDED SEPTEMBER 30, 1995
Net interest income on a fully taxable equivalent basis
increased $261,000 or 3.4% to $7,998,000 or 4.12% of average
earning assets for the first nine months of 1996 compared to
$7,737,000 or 4.18% of average earning assets for the same period
of 1995. The provision for possible loan losses for the nine
months ended September 30, 1996 was $305,000 compared to $220,000
for the same period of 1995.
Noninterest income and noninterest expense for the nine month
periods ended September 30, 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
(DOLLARS EXPRESSED IN THOUSANDS)
NINE MONTHS
ENDED
SEPTEMBER 30, INCREASE (DECREASE)
________________ __________________
1996 1995 Amount %
_______ _______ _______ _______
<S> <C> <C> <C> <C>
NONINTEREST INCOME
Service charges on deposit accounts $ 512 501 11 2.2 %
Trust department income 167 113 54 47.8
Mortgage loan servicing fees 219 199 20 10.1
Gain on sales of mortgage loans 87 92 (5) (5.4)
Gains on calls of debt securities -- 5 (5) (100.0)
Credit card fees 254 227 27 11.9
Other 108 109 (1) (0.9)
_______ _______ _______
$ 1,347 1,246 101 8.1%
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
(DOLLARS EXPRESSED IN THOUSANDS)
NINE MONTHS
ENDED
SEPTEMBER 30, INCREASE (DECREASE)
________________ __________________
1996 1995 Amount %
_______ _______ ________ ________
<S> <C> <C> <C> <C>
NONINTEREST EXPENSE
Salaries, wages, and
employee benefits $ 2,558 2,354 204 8.7 %
Occupancy expense 225 237 (12) (5.1)
Furniture and equipment expense 319 331 (12) (3.6)
FDIC insurance assessment 2 215 (213) (99.1)
Advertising and promotion 246 139 107 77.0
Postage, printing, and supplies 248 263 (15) (5.7)
Legal, examination, and
professional fees 160 187 (27) (14.4)
Credit card expenses 221 200 21 10.5
Credit investigation and loan
collection expenses 79 66 13 19.7
Other 523 480 43 9.0
_______ _______ _______
$ 4,581 4,472 109 2.4 %
======= ======= =======
</TABLE>
Noninterest income increased $101,000 or 8.1% to $1,347,000
for the first nine months of 1996 compared to $1,246,000 for the
same period of 1995 due primarily to increases in trust
department income, credit card fees, and mortgage loan servicing
fees. The increase in trust department income reflected a
combination of an increase in fees charged, growth in the market
value of assets managed, and an increase in volume of estate
distribution fees. Credit card fees increased $27,000 due to an
increase in volume of merchant transactions, and mortgage loan
servicing fees increased $20,000 due to an increase in the
average volume of loans serviced from approximately $59,600,000
for the first nine months of 1995 to approximately $69,800,000
for the first nine months of 1996.
Noninterest expense increased $109,000 or 2.4% to $4,581,000
for the first nine months of 1996 compared to $4,472,000 for the
first nine months of 1995 due primarily to a $204,000 or 8.7%
increase in salaries, wages, and employee benefits and a $107,000
or 77.0% increase in advertising and promotion. Those increases
were partially offset by a $213,000 decrease in FDIC insurance
assessment. The increase in salaries, wages, and employee
benefits reflected a combination of recruiting expense, increases
in non-officer employee salaries to respond to local market
conditions, officer merit increases of approximately 4.1%,
increases in profit sharing and pension expense, and increased
payroll taxes. The increase in advertising and promotion
reflected increased costs associated with a new logo and a
special advertising program plus the fact that such expenses were
reduced in the first nine months of 1995 while the new program
was being developed. The decrease in FDIC insurance assessment
reflected a decrease in assessment rate from 23 cents per $100 of
deposits for the first half of 1995 and 4 cents per $100 of
deposits for the third quarter of 1995 to a minimum assessment of
$1,500 for the first nine months of 1996. Other noninterest
expense increased $43,000 due primarily to <PAGE> increases in data
processing fees paid to third parties, connection fees associated
with upgrading the Company's data processing telephone lines, and
increased employee training costs. The $27,000 decrease in
legal, examination, and professional fees primarily reflected a
decrease in consultant fees related to salary administration and
strategic planning.
Income taxes as a percentage of earnings before income taxes
as reported in the condensed consolidated financial statements
was 32.6% for the first nine months of 1996 compared to 32.5% for
the first nine months of 1995. After adding a fully taxable
equivalent adjustment to both income taxes and earnings before
income taxes for tax exempt income on loans and investment
securities, the fully taxable equivalent ratios of income taxes
as a percentage of earnings before income taxes were 36.7% for
both periods.
NET INTEREST INCOME
The increase in fully taxable equivalent net interest income
for the three month period ended September 30, 1996 primarily
reflects growth in average total loans outstanding, while the
increase for the nine month period ended September 30, 1996
primarily reflects the favorable effects of a shift in earning
asset mix from lower yielding investment securities to higher
yielding loans. Fully taxable equivalent net interest margin for
both periods in 1996 decreased from the rates reported for the
comparable periods in 1995 due primarily to reduced yields on
commercial loans and an increase in the rate paid for other time
deposits. Local competitive factors reduced yields obtainable on
new commercial loans and increased the necessary rate paid for
other time deposits in order to attract additional funds. In
addition, the decrease in commercial loan yields reflected two
decreases in the prime lending rate of twenty five basis points
each, one in late December, 1995 and one in February, 1996.
The following tables present average balance sheets, net
interest income, average yields of earning assets, and average
costs of interest bearing liabilities on a fully taxable
equivalent basis for the three and nine month periods ended
September 30, 1996 and 1995.
<PAGE>
<TABLE>
<CAPTION>
(DOLLARS EXPRESSED IN THOUSANDS)
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
___________________________ ___________________________
INTEREST RATE INTEREST RATE
AVERAGE INCOME/ EARNED/ AVERAGE INCOME/ EARNED/
BALANCE EXPENSE/1/ PAID/1/ BALANCE EXPENSE/1/ PAID/1/
________ __________ _______ ________ __________ _______
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Loans:/2/
Commercial $ 40,654 $ 915 8.95% $ 34,494 $ 848 9.75%
Real estate 91,790 2,035 8.82 82,971 1,846 8.83
Consumer 33,758 795 9.37 30,986 685 8.77
Money market/3/ 7,352 101 5.47 -- -- --
Investment
securities:/4/
U.S. Treasury and
U.S. Government
agencies 57,406 836 5.79 50,688 697 5.46
State and municipal 16,250 314 7.69 14,806 285 7.64
Other 3,687 60 6.47 4,193 62 5.87
Federal funds sold 12,435 166 5.31 19,179 281 5.81
Interest-bearing
deposits 39 1 10.20 60 1 6.61
________ ______ ________ ______
Total interest
earning assets 263,371 5,223 7.89 237,377 4,705 7.86
All other assets 16,837 16,153
Allowance for loan
losses (2,304) (2,114)
________ ________
Total assets $277,904 $251,416
======== ========
</TABLE>
Continued on next page
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
___________________________ ___________________________
INTEREST RATE INTEREST RATE
AVERAGE INCOME/ EARNED/ AVERAGE INCOME/ EARNED/
BALANCE EXPENSE/1/ PAID/1/ BALANCE EXPENSE/1/ PAID/1/
________ __________ _______ ________ __________ _______
<S> <C> <C> <C> <C> <C> <C>
LIABILITIES
AND STOCKHOLDERS'
EQUITY
NOW accounts $ 27,109 $ 181 2.66% $ 26,719 $ 179 2.66%
Savings 22,250 220 3.93 21,593 214 3.93
Money market 31,766 335 4.20 30,760 322 4.15
Deposits of
$100,000 and over 10,214 140 5.45 6,032 80 5.26
Other time deposits 95,283 1,392 5.81 84,736 1,184 5.54
________ ______ ________ ______
Total time deposits 186,622 2,268 4.83 169,840 1,979 4.62
Securities sold under
agreements to
repurchase 17,770 210 4.70 10,405 128 4.88
Interest-bearing
demand notes
to U.S. Treasury 846 10 4.70 1,672 23 5.46
________ ______ ________ ______
Total interest-
bearing
liabilities 205,238 2,488 4.82 181,917 2,130 4.65
______ ______
Demand deposits 31,318 30,559
Other liabilities 1,827 1,674
________ ________
Total liabilities 238,383 214,150
Stockholders' equity 39,521 37,266
________ ________
Total liabilities
and stockholders'
equity $277,904 $251,416
======== ========
Net interest income $ 2,735 $ 2,575
======= =======
Net interest margin 4.13% 4.30%
__________ ==== ====
/1/ Interest income and yields are presented on a fully taxable equivalent
basis using the Federal statutory income tax rate of 34%, net of
nondeductible interest expense. Such adjustments were $93,000 in 1996 and
$89,000 in 1995.
/2/ Non-accruing loans are included in the average amounts outstanding.
/3/ Includes banker's acceptances and commercial paper.
/4/ Average balances based on amortized cost.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(DOLLARS EXPRESSED IN THOUSANDS)
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
___________________________ ___________________________
INTEREST RATE INTEREST RATE
AVERAGE INCOME/ EARNED/ AVERAGE INCOME/ EARNED/
BALANCE EXPENSE/1/ PAID/1/ BALANCE EXPENSE/1/ PAID/1/
________ __________ _______ ________ __________ _______
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Loans:/2/
Commercial $ 39,788 $ 2,691 9.03% $ 33,473 $ 2,412 9.63%
Real estate 88,078 5,866 8.90 81,880 5,320 8.69
Consumer 32,576 2,266 9.29 30,847 2,003 8.68
Money market/3/ 2,469 101 5.46 188 8 5.69
Investment
securities:/4/
U.S. Treasury and
U.S. Government
agencies 59,993 2,560 5.70 62,680 2,516 5.37
State and municipal 15,567 907 7.78 14,368 845 7.86
Other 3,366 161 6.39 5,819 260 5.97
Federal funds sold 17,445 694 5.31 17,941 793 5.91
Interest-bearing
deposits 24 1 5.57 20 1 6.69
________ _______ ________ _______
Total interest
earning assets 259,306 15,247 7.85 247,216 14,158 7.66
All other assets 16,692 15,709
Allowance for loan
losses (2,266) (2,055)
________ ________
Total assets $273,732 $260,870
======== ========
</TABLE>
Continued on next page
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
___________________________ ___________________________
INTEREST RATE INTEREST RATE
AVERAGE INCOME/ EARNED/ AVERAGE INCOME/ EARNED/
BALANCE EXPENSE/1/ PAID/1/ BALANCE EXPENSE/1/ PAID/1/
________ __________ _______ ________ __________ _______
<S> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
STOCKHOLDERS'
EQUITY
NOW accounts $ 28,067 $ 561 2.67% $ 28,558 $ 570 2.67%
Savings 21,993 649 3.94 21,220 624 3.93
Money market 31,310 981 4.19 31,832 990 4.16
Deposits of
$100,000 and over 8,580 346 5.39 5,331 196 4.92
Other time deposits 93,173 4,057 5.82 82,504 3,176 5.15
________ _______ ________ _______
Total time deposits 183,123 6,594 4.81 169,445 5,556 4.38
Securities sold under
agreements to
repurchase 17,751 625 4.70 21,124 816 5.16
Interest-bearing
demand notes
to U.S. Treasury 778 30 5.15 1,198 49 5.47
________ _______ ________ _______
Total interest-
bearing
liabilities 201,652 7,249 4.80 191,767 6,421 4.48
_______ _______
Demand deposits 31,207 31,350
Other liabilities 1,760 1,637
________ ________
Total liabilities 234,619 224,754
Stockholders' equity 39,113 36,116
________ ________
Total liabilities
and stockholders'
equity $273,732 $260,870
======== ========
Net interest income $ 7,998 $ 7,737
======== ========
Net interest margin 4.12% 4.18%
__________ ==== ====
/1/ Interest income and yields are presented on a fully taxable equivalent
basis using the Federal statutory income tax rate of 34%, net of
nondeductible interest expense. Such adjustments were $273,000 in 1996
and $266,000 in 1995.
/2/ Non-accruing loans are included in the average amounts outstanding.
/3/ Includes banker's acceptances and commercial paper.
/4/ Average balances based on amortized cost.
</TABLE>
<PAGE>
The following tables present, on a fully taxable equivalent
basis, analyses of changes in net interest income resulting from
changes in average volumes of earning assets and interest bearing
liabilities and average rates earned and paid. The change in
interest due to the combined rate/volume variance has been
allocated to rate and volume changes in proportion to the
absolute dollar amounts of change in each.
<TABLE>
<CAPTION>
(DOLLARS EXPRESSED IN THOUSANDS)
THREE MONTHS ENDED SEPTEMBER
30, 1996 COMPARED TO THREE
MONTHS ENDED SEPTEMBER 30, 1995
_______________________________
CHANGE DUE TO
TOTAL ____________________
CHANGE VOLUME RATE
________ ________ _________
<S> <C> <C> <C>
INTEREST INCOME ON A FULLY
TAXABLE EQUIVALENT BASIS:
Loans: /1/
Commercial $ 67 143 (76)
Real estate /2/ 189 195 (6)
Consumer 110 63 47
Money market 101 101 --
Investment securities:
U.S. Treasury and U.S.
Government agencies 139 96 43
State and municipal /2/ 29 28 1
Other (2) (8) 6
Federal funds sold (115) (92) (23)
Interest-bearing deposits -- -- --
_______ _______ ________
Total interest income 518 526 (8)
INTEREST EXPENSE:
NOW accounts 2 3 (1)
Savings 6 6 --
Money market 13 11 2
Deposits of
$100,000 and over 60 57 3
Other time deposits 208 152 56
Securities sold under
agreements to repurchase 82 87 (5)
Interest-bearing demand
notes to U.S. Treasury (13) (10) (3)
_______ _______ ________
Total interest expense 358 306 52
_______ _______ ________
NET INTEREST INCOME ON A FULLY
TAXABLE EQUIVALENT BASIS $ 160 220 (60)
___________ ======= ======= ========
/1/ Non-accruing loans are included in the average amounts outstanding.
/2/ Interest income and yields are presented on a fully taxable equivalent
basis using the federal statutory income tax rate of 34%, net of
nondeductible interest expense. Such adjustments totaled $93,000 in 1996
and $89,000 in 1995.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(DOLLARS EXPRESSED IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER
30, 1996 COMPARED TO NINE
MONTHS ENDED SEPTEMBER 30, 1995
_______________________________
CHANGE DUE TO
TOTAL ____________________
CHANGE VOLUME RATE
________ ________ _________
<S> <C> <C> <C>
INTEREST INCOME ON A FULLY
TAXABLE EQUIVALENT BASIS:
Loans: /1/
Commercial $ 279 434 (155)
Real estate /2/ 546 411 135
Consumer 263 116 147
Money market 93 93 --
Investment securities:
U.S. Treasury and U.S.
Government agencies 44 (111) 155
State and municipal /2/ 62 70 (8)
Other (99) (116) 17
Federal funds sold (99) (22) (77)
Interest-bearing deposits -- -- --
_______ _______ ________
Total interest income 1,089 875 214
INTEREST EXPENSE:
NOW accounts (9) (10) 1
Savings 25 23 2
Money market (9) (16) 7
Deposits of
$100,000 and over 150 129 21
Other time deposits 881 438 443
Securities sold under
agreements to repurchase (191) (123) (68)
Interest-bearing demand
notes to U.S. Treasury (19) (16) (3)
_______ _______ ________
Total interest expense 828 425 403
_______ _______ ________
NET INTEREST INCOME ON A FULLY
TAXABLE EQUIVALENT BASIS $ 261 450 (189)
======= ======= ========
___________
/1/ Non-accruing loans are included in the average amounts outstanding.
/2/ Interest income and yields are presented on a fully taxable equivalent
basis using the federal statutory income tax rate of 34%, net of
nondeductible interest expense. Such adjustments totaled $273,000 in
1996 and $266,000 in 1995.
</TABLE>
<PAGE>
PROVISION AND ALLOWANCE FOR LOAN LOSSES
The provision for loan losses is based on management's
evaluation of the loan portfolio in light of national and local
economic conditions, changes in the composition and volume of the
loan portfolio, changes in the volume of past due and nonaccrual
loans, and other relevant factors. The allowance for loan losses
which is reported as a deduction from loans, is available for
loan charge-offs. The allowance is increased by the provision
charged to expense and is reduced by loan charge-offs net of loan
recoveries.
Management formally reviews all loans in excess of certain
dollar amounts (periodically established) at least annually. In
addition, on a monthly basis, management reviews past due,
"classified", and "watch list" loans in order to classify or
reclassify loans as "loans requiring attention," "substandard,"
"doubtful," or "loss". During that review, management also
determines what loans should be considered to be "impaired".
Management believes, but there can be no assurance, that these
procedures keep management informed of possible problem loans.
Based upon these procedures, both the allowance and provision for
loan losses are adjusted to maintain the allowance at a level
considered adequate by management for estimated losses inherent
in the loan portfolio. See additional discussion concerning
nonperforming loans under "Financial Condition."
The allowance for loan losses was reduced by net loan
charge-offs of $26,301 for the first quarter of 1996, $75,480 for
the second quarter of 1996, and $84,507 for the third quarter of
1996. That compares to net charge-offs of $16,634 for the first
quarter of 1995, a net recovery of $1,239 for the second quarter
of 1995, and a net recovery of $482 for the third quarter of
1995. The allowance for loan losses was increased by the
provision charged to expense of $90,000 for the first quarter of
1996, $135,000 for the second quarter of 1996, and $80,000 for
the third quarter of 1996. That compares to $100,000 for the
first quarter of 1995, $75,000 for the second quarter of 1995,
and $45,000 for the third quarter of 1995.
The balance of the allowance for loan losses was $2,297,721
at September 30, 1996 compared to $2,179,009 at December 31, 1995
and $2,148,412 at September 30, 1995. The allowance for loan
losses as a percent of outstanding loans, excluding bankers
acceptances, was 1.35% at September 30, 1996 compared to 1.41% at
December 31, 1995 and 1.42% at September 30, 1995.
FINANCIAL CONDITION
Total assets increased $30,024,018 or 11.7% to $287,364,294
at September 30, 1996 compared to $257,340,276 at December 31,
1995. Total liabilities increased $28,480,104 or 13.0% to
$247,465,194 and stockholders' equity increased $1,543,914 or
4.0% to $39,899,100.
Loans, net of unearned income, increased $23,173,369 or 15.0%
to $177,512,504 at September 30, 1996 compared to $154,339,135 at
December 31, 1995 due primarily to a $7,678,374 investment in
short-term bankers acceptances to offset an increase in
short-term securities sold subject to repurchase and growth in
commercial real estate loans. Real estate <PAGE> construction loans
increased $6,092,776 or 51.9%; real estate mortgage loans
increased $4,648,852 or 6.4%; consumer loans increased $2,778,837
or 8.9%; and commercial loans increased $1,974,530 or 5.1%.
Nonperforming loans, defined as loans 90 days or more past
due and loans on nonaccrual status, totaled $916,000 or 0.54% of
total loans, excluding bankers acceptances, at September 30, 1996
compared to $838,000 or 0.54% of total loans at December 31,
1995. Detail of those balances plus repossessions is as follows:
<TABLE>
<CAPTION>
(DOLLARS EXPRESSED IN THOUSANDS)
SEPTEMBER 30, 1996 DECEMBER 31, 1995
_________________ _________________
% OF % OF
GROSS GROSS
BALANCE LOANS BALANCE LOANS
_______ _____ _______ _____
<S> <C> <C> <C> <C>
Loans 90 days or more
past due -
Commercial $ 59 .03% $ -- --%
Real Estate 167 .10 110 .07
Consumer 18 .01 7 --
______ ____ ______ ____
244 .14 117 .07
______ ____ ______ ____
Loans on nonaccrual
status -
Commercial 61 .04 75 .05
Real Estate 596 .35 626 .41
Consumer 15 .01 20 .01
______ ____ ______ ____
672 .40 721 .47
______ ____ ______ ____
Total nonperforming loans 916 .54% 838 .54%
==== ====
Repossessions 87 70
______ ______
Total nonperforming assets $1,003 $ 908
====== ======
</TABLE>
The allowance for loan losses was 250.84% of nonperforming
loans at September 30, 1996 compared to 260.02% of nonperforming
loans at December 31, 1995. The September 30, 1996 balances of
commercial, real estate, and consumer loans 90 days or more past
due reflect one, two, and two loans, respectively, all of which
are well secured and in the process of collection. The September
30, 1996 balances of commercial, real estate, and consumer loans
on nonaccrual status reflect three, six, and three loans,
respectively. One of the commercial loans on nonaccrual status
at September 30, 1996, which totaled $41,000, is 90% guaranteed
by the Small Business Administration. Approximately $182,000 of
loans to a borrower who declared bankruptcy were added to
commercial loans on nonaccrual status during the first quarter of
1996, but approximately $141,000 of those loans were guaranteed
by the Small Business Administration. The Company liquidated
collateral securing those <PAGE> loans during the second quarter of 1996
and charged off the remaining non-guaranteed balance of
approximately $29,000.
It is the Company's policy to discontinue the accrual of
interest income on loans when the full collection of interest or
principal is in doubt, or when the payment of interest or
principal has become contractually 90 days past due unless the
obligation is both well secured and in the process of collection.
A loan remains on nonaccrual status until the loan is current as
to payment of both principal and interest and/or the borrower
demonstrates the ability to pay and remain current. Interest on
loans on nonaccrual status at September 30, 1996 and 1995, which
would have been recorded under the original terms of those loans,
was approximately $62,000 and $46,000 for the nine months ended
September 30, 1996 and 1995, respectively. Approximately $16,000
and $14,000 was actually recorded as interest income on such
loans for the nine months ended September 30, 1996 and 1995,
respectively.
A loan is considered "impaired" when it is probable a
creditor will be unable to collect all amounts due - both
principal and interest - according to the contractual terms of
the loan agreement. In addition to nonaccrual loans at September
30, 1996 included in the table above, which were considered
"impaired", management has identified additional loans totaling
approximately $4,237,000 which are not included in the nonaccrual
table above but are considered by management to be "impaired".
Approximately $3,939,000 of those loans represented commercial
loans that operate in an industry that has experienced some
adverse economic trends due to change in that industry's
regulatory environment. During the first quarter of 1996 the
Company agreed to lend up to $800,000 in additional funds (all of
which have been advanced) to one of the borrowers in that
industry. The Company believes that by advancing additional
funds to meet the short-term cash needs of the borrower, the
likelihood of full collection of all amounts owed is enhanced.
The additional funding commitment was collateralized by
previously unpledged collateral and other credit enhancements.
The remainder of loans identified by management as being
"impaired" reflected two commercial loans totaling approximately
$171,000 and thirteen consumer loans totaling approximately
$127,000. The average balance of "impaired" loans for the first
nine months of 1996 was approximately $2,321,000.
As of September 30, 1996 approximately $1,700,000 of
additional loans not included in the nonaccrual table or
identified by management as being "impaired" were classified by
management as having potential credit problems which raised
doubts as to the ability of the borrower to comply with present
loan repayment terms. Of the $1,700,000 of "classified" loans at
September 30, 1996, $166,000 represented three commercial loans
ranging in size from approximately $18,000 to $94,000; $1,374,000
represented six real estate loans ranging in size from
approximately $35,000 to $465,000; and $160,000 represented
twenty two installment loans to individuals.
Investments in debt securities classified as held-to-maturity
increased $4,857,256 or 24.4% to $24,782,522 at September 30,
1996 compared to $19,925,266 at December 31, 1995. Investments
classified as held-to-maturity are carried at amortized cost. At
September 30, 1996 and December 31, 1995 the aggregate fair value
of the Company's held-to-maturity investment portfolio was
approximately $86,000 and $2,000, respectively, less than its
aggregate carrying value.
<PAGE>
Investments in debt and equity securities classified as
available-for-sale increased $4,449,238 or 9.2% to $53,030,869 at
September 30, 1996 compared to $48,581,631 at December 31, 1995.
Investments classified as available-for-sale are carried at fair
value. At December 31, 1995 the market valuation account for the
available-for-sale investments of $215,291 increased the
amortized cost of those investments to their fair value on that
date and the net after tax increase resulting from the market
valuation adjustment of $135,633 was reflected as a separate
positive component of stockholders' equity. During 1996, the
market valuation account was decreased $591,052 to a negative
balance of $375,761 to reflect the fair value of available-
for-sale investments at September 30, 1996 and the net after tax
decrease resulting from the change in the market valuation
adjustment of $372,362 decreased the stockholders' equity
component to a negative balance of $236,729 at September 30,
1996. The decrease in fair value compared to amortized cost
resulted from a increase in current market rates from December
31, 1995 to September 30, 1996.
Cash and cash equivalents, which consist of cash and due from
banks and Federal funds sold, decreased $3,455,889 or 11.5% to
$26,601,587 at September 30, 1996 compared to $30,057,476 at
December 31, 1995.
Premises and equipment increased $581,045 or 22.6% to
$3,154,213 at September 30, 1996 compared to $2,573,168 at
December 31, 1995. The increase reflected expenditures for
premises and equipment of $800,867 and depreciation expense of
$219,822. The expenditures for premises and equipment primarily
reflected approximately $451,000 in construction costs for a
permanent East Bank facility plus purchases of hardware and
software for new automated services being offered to customers.
It is presently anticipated that the Company will invest
approximately $1,000,000 more in premises and equipment in the
next six months.
Total deposits increased $16,616,245 or 8.0% to $223,431,558
at September 30, 1996 compared to $206,815,313 at December 31,
1995 due primarily to growth in time certificates of deposit
which increased $11,185,654 and reflected an increase in rates
paid for those funds. Demand deposits increased $3,452,560 and
interest-bearing transaction accounts increased $1,978,031 from
December 31, 1995 to September 30, 1996. Both of those increases
were due to normal fluctuations in the accounts. Average demand
deposits and interest bearing transaction accounts decreased
approximately 0.3% in the aggregate based on average balances for
the first nine months of 1996 compared to the first nine months
of 1995.
Securities sold under agreements to repurchase increased
$9,655,336 to $19,793,205 at September 30, 1996 compared to
$10,137,869 at December 31, 1995 due primarily to short-term
funds obtained from the Jefferson City School District and Cole
County Court.
The increase in stockholders' equity reflected net income of
$2,821,600 less dividends declared of $905,324 and the $372,362
decrease in unrealized holding gains (losses) on investments in
debt and equity securities available-for-sale.
No material changes in the Company's liquidity or capital
resources have occurred since December 31, 1995.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit No. Description
3.1 Articles of Incorporation of the Company (filed as
Exhibit 3(a) to the Company's Registration Statement on
Form S-4 (Registration No. 33-54166) and incorporated
herein by reference).
3.2 Bylaws of the Company (filed as Exhibit 3(b) to the
Company's Registration Statement on Form S-4
(Registration No. 33-54166) and incorporated herein by
reference).
4 Specimen certificate representing shares of the
Company's $1.00 par value common stock (filed as
Exhibit 4 to the Company's Registration Statement on
Form S-4 (Registration No. 33-54166) and incorporated
herein by reference).
27 Financial Data Schedule
(b) Reports on Form 8-K.
No reports on Form 8-K have been filed during the third
quarter of 1996.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
EXCHANGE NATIONAL BANCSHARES, INC.
Date By /s/ Donald L. Campbell
__________________________________
Donald L. Campbell, Chairman of the
Board of Directors, President and
November 1, 1996 Principal Executive Officer
By /s/ Carl A. Brandenburg, Sr.
___________________________________
Carl A. Brandenburg, Sr., Treasurer
November 1, 1996 and Chief Financial Officer
<PAGE>
EXCHANGE NATIONAL BANCSHARES, INC.
INDEX TO EXHIBITS
September 30, 1996 Form 10-QSB
Exhibit No. Description Page No.
3.1 Articles of Incorporation of the Company
(filed as Exhibit 3(a) to the Company's
Registration Statement on Form S-4
(Registration No. 33-54166) and incorporated
herein by reference). **
3.2 Bylaws of the Company (filed as Exhibit 3(b)
to the Company's Registration Statement on
Form S-4 (Registration No. 33-54166) and
incorporated herein by reference). **
4 Specimen certificate representing shares of the
Company's $1.00 par value common stock (filed as
Exhibit 4 to the Company's Registration Statement
on Form S-4 (Registration No. 33-54166) and
incorporated herein by reference). **
27 Financial Data Schedule 28
** Incorporated by reference.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000893847
<NAME> EXCHANGE NATIONAL BANCSHARES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
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0
0
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</TABLE>
