<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
Commission file number 22-25144
FIRST STATE BANCORPORATION
(Name of small business issuer in its charter)
New Mexico 85-0366665
(State of incorporation) (IRS Employer Identification No.)
111 LOMAS AVENUE N.W.
ALBUQUERQUE, NEW MEXICO
(505) 241-7500
(Address and telephone number of
principal executive offices)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the 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.
Yes XX No
--- ---
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date:
2,023,666 shares of common stock, no par value, outstanding as of July 31,
1996
<PAGE>
FIRST STATE BANCORPORATION
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 1
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 1
PART II. OTHER INFORMATION
Item 1. Legal Proceedings None
Item 2. Changes in Securities None
Item 3. Defaults Upon Senior Securities None
Item 4. Submission of Matters to a Vote of Security Holders 3
Item 5. Other Information None
Item 6. Exhibits and Reports on Form 8-K 3
SIGNATURES 4
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The consolidated condensed financial statements of First State Bancorporation
(the "Company") are attached as Exhibit A.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CONSOLIDATED BALANCE SHEET
The Company's total assets increased by $34,781,000 from $252,981,000 as of
December 31, 1995 to $287,762,000 as of June 30, 1996, due to internal growth.
For the first six months of 1996, net loans increased by $37,858,000 from
$182,009,000 to $219,867,000 while investment securities decreased by
$3,026,000 from $38,676,000 to $35,650,000. For the first six months of 1996,
other assets increased $288,000 from $17,508,000 to $17,796,000.
The increase in loans is due largely to increased economic activity and demand
for loans secured by real estate in the Company's market area. Total commercial
loans increased by approximately $10,388,000, real estate loans increased by
approximately $16,750,000 and consumer loans increased by approximately
$2,220,000. The company also began a leasing division in January 1996 and new
leases totaling approximately $8,500,000 were funded in the first six months of
1996. Investment securities decreased as a result of maturities. Purchases of
premises and equipment, the majority of which resulted from construction of a
branch facility, accounted for $512,000 of the increase in other assets.
At June 30, 1996, one branch remains under construction in Bernalillo, which is
expected to be completed in August 1996.
Deposits, which are the Company's main source of funds for loans, investments
and federal funds sold, increased by $19,617,000 from $218,847,000 as of
December 31, 1995 to $238,464,000 as of June 30, 1996. Non interest-bearing
deposits increased by $6,913,000 and interest-bearing deposits increased by
$12,704,000. For the first six months of 1996, other liabilities increased by
$14,621,000 due largely to borrowings from the Federal Home Loan Bank of
$8,000,000, federal funds purchased of $3,970,000 and an increase in securities
sold under repurchase agreements of $2,116,000.
CONSOLIDATED RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1996.
Net income for the Company for the three months ended June 30, 1996, was
$275,000, a decrease of $306,000 or 53% from $581,000 for the same period of
1995. The Company's return on average assets was 0.40% for the second quarter
of 1996, compared to 1.13% for the same period of 1995. The most significant
items contributing to this decrease were a $516,000 provision for loan losses
and an increase of $1,032,000 in non-interest expenses.
The provision for loan losses increased by $398,000 from the same quarter of
1995 as a result of net charge-offs of $286,000 and approximately $20,000,000 in
loan growth in the second quarter of 1996.
Net interest income before provision for loan losses increased $669,000 to
$3,967,000 for the three months ended June 30, 1996, from $3,298,000 for the
three months ended June 30, 1995, due to increased loan volume. The Company's
net interest margin decreased to 6.43% at June 30, 1996, from 6.84% at June 30,
1995. This decrease was due to increased interest expense due to higher deposit
rates and growth in the volume of interest bearing deposits.
1
<PAGE>
Total non-interest income increased by $215,000 to $599,000 for the three months
ended June 30, 1996, compared to $384,000 for the same period of 1995, due to an
increase in credit card servicing revenue and increased service charges due to
deposit growth.
Total non-interest expense increased by $1,032,000 to $3,609,000 for the second
quarter of 1996, compared to $2,577,000 for the same period of 1995. The
opening and staffing of new branches subsequent to the second quarter of 1995,
including Los Lunas in August, the Journal Center branch and operations center
in September, and the Santa Fe Downtown branch in December and the beginning of
the leasing division in January 1996, accounted for a substantial portion of the
increases in salaries and employee benefits, occupancy and equipment which
totaled $587,000. Data processing expense increased by approximately $280,000
mainly as a result of costs related to the conversion of the company's banking
and credit card processing software packages. Credit card interchange expense
is related to credit card servicing revenue and increased as a result of the
company issuing its own credit cards.
CONSOLIDATED RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1996
Net income for the Company for the six months ended June 30, 1996, was $780,000,
a decrease of $406,000 or 34.23% from $1,186,000 for the same period of 1995 The
Company's return on average assets was 0.58% for the first six months compared
to 1.13% for the same period of 1995. The most significant items contributing
to this decrease were a $634,000 provision for loan losses for the first six
months of 1996 and an increase of $1,885,000 in non-interest expenses.
The provision for loan losses increased by $425,000 from the same period of 1995
as a result of net charge-offs of $264,000 for the first six months of 1996
compared to $76,000 for the same period of 1995 and as a result of approximately
$38,228,000 in loan growth in the first six months of 1996.
Net interest income before provision for loan losses increased $721,000 to
$6,992,000 for the six months ended June 30, 1996, from $6,271,000 for the six
months ended June 30, 1995, due to increased loan volume. The Company's net
interest margin decreased to 6.42% at June 30, 1996, from 6.92% at June 30,
1995. This decrease was due to increased interest expense due to higher deposit
rates and growth in the volume of interest bearing deposits.
Total non-interest income increased by $382,000 to $1,136,000 for the six months
ended June 30, 1996, compared to $754,000 for the same period of 1995, due to an
increase in credit card servicing revenue and increased service charges due to
deposit growth.
Total non-interest expense increased by $1,885,000 to $6,945,000 for the first
six months of 1996, compared to $5,060,000 for the same period of 1995. The
opening and staffing of new branches subsequent to the first quarter of 1995,
including Los Lunas in August, the Journal Center branch and operations center
in September, and the Santa Fe Downtown branch in December and the beginning of
the leasing division in January 1996, accounted for a substantial protion of the
increase in salaries and employee benefits, occupancy and equipment which
totaled $1,095,000. Data processing expense increased by approximately $408,000
mainly as a result of costs related to the conversion of the company's banking
and credit card processing software packages. Credit card interchange expense is
related to credit card servicing revenue and increased as a result of the
company issuing its own credit cards.
LIQUIDITY AND CAPITAL EXPENDITURES
The Company's primary sources of funds are customer deposits, loan repayments,
loan sales and sales and maturities of investment securities. The Company has
additional sources of liquidity in the form of borrowings. Borrowings include
federal funds purchased, securities sold under repurchase agreements, and
borrowings from the Federal Home Loan Bank.
2
<PAGE>
During the second quarter of 1996 the company used additional sources of
liquidity in the form of Federal Home Loan Bank advances of $8,000,000 and
federal funds purchased of $3,900,000 to fund loan growth during the second
Quarter of 1996. Management intends to reduce these short term borrowings
through increased customer deposits over the last six months of 1996.
Item 4. Submission of Matters to a Vote of Security Holders
On June 7, 1996 the company held its annual meeting of shareholders. At that
meeting the following items were submitted to a vote of security holders:
1. The following ten directors were elected:
NAME TERM
---- ----
Eloy A Jeantete 1 Year
Michael R. Stanford 1 Year
A. James Wells 1 Year
H. Patrick Dee 2 Years
Leonard J. Delayo, Jr. 2 Years
Bradford M. Johnson 2 Years
Manual Lujan, Jr. 3 Years
Sherman McCorkle 3 Years
Douglas M. Smith, M.D. 3 Years
Herman N. Wisenteiner 3 Years
2. To approve an amendment to the Articles of Incorporation of the Company to
divide the Board of Directors into three classes, each class to serve a three-
year term, after initial terms of one, two and three years, respectively, and to
fix the number of directors elected by the holders of the Common Stock between
nine and fifteen. Votes: For 1,016,855; Against 309,655; Abstain 13,907; Not
Voted 582,971.
3. To approve an amendment to the Articles of Incorporation to establish
certain notice procedures in order for shareholders to nominate directors or
bring other business before meetings of shareholders. Votes: For 1,077,601;
Against 250,423; Abstain 12,393; Not Voted 582,971.
4. To approve an amendment to the Articles of Incorporation to require a two-
thirds vote of the outstanding Common Stock (i) to amend, alter, change,
repeal, or adopt any provision inconsistent with the provisions of the
amendments adopted pursuant to items 2, 3, or 4, if adopted, or (ii) to remove
any director of the Company without cause. Votes: For 1,059,223; Against
255,587; Abstain 13,115; Not Voted 595,463.
5. To ratify the appointment of KPMG Peat Marwick LLP as independent public
accountants for the year ending December 31, 1996. Votes: For 1,838,079;
Against 76,457; Abstain 8,852.
Item 6. Exhibits and Reports on Form 8-K
3.3 ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF FIRST STATE
BANCORPORATION.
10.14 EXECUTIVE INCOME PROTECTION PLAN
27.2 Financial Data Schedule as of June 30, 1996.
3
<PAGE>
PART II - OTHER INFORMATION
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.
FIRST STATE BANCORPORATION
Date: August 5, 1996 By: Michael R. Stanford
-------------- --------------------------------------------------
Michael R. Stanford, President & Chief
Executive Officer
Date: August 5, 1996 By: H. Patrick Dee
-------------- --------------------------------------------------
H. Patrick Dee, Executive Vice President & Chief
Operating Officer
Date: August 5, 1996 By: Brian C. Reinhardt
-------------- --------------------------------------------------
Brian C. Reinhardt, Senior Vice President
and Chief Financial Officer
4
<PAGE>
EXHIBIT A
FIRST STATE BANCORPORATION AND SUBSIDIARY
Consolidated Condensed Balance Sheets
(unaudited)
<TABLE>
<CAPTION>
June 30 December 31
Assets 1996 1995
------ ------------ ------------
<S> <C> <C>
Cash and due from banks $ 14,448,922 $ 14,787,266
Federal funds sold - -
------------ ------------
Total cash and cash equivalents 14,448,922 14,787,266
Investment securities:
Held to maturity (at amortized cost, market value of $21,090,000 at
June 30, 1996, and $22,232,000 at December 31, 1995) 21,287,957 21,171,746
Available for sale (at market, amortized cost of $14,453,000 at
June 30, 1996, and $17,329,000 at December 31, 1995) 14,361,979 17,504,265
------------ ------------
35,649,936 38,676,011
Loans net of unearned interest 222,087,905 183,859,770
Less allowance for loan losses 2,220,879 1,850,605
------------ ------------
Net loans 219,867,026 182,009,165
Other assets 17,795,737 17,508,118
------------ ------------
Total assets $287,761,621 $252,980,560
============ ============
Liabilities and Stockholders' Equity
------------------------------------
Liabilities:
Deposits
Noninterest-bearing $ 48,939,764 $ 42,026,645
Interest bearing 189,524,597 176,820,223
------------ ------------
Total deposits 238,464,361 218,846,868
Other liabilities 31,329,072 16,707,784
------------ ------------
Total liabilities 269,793,433 235,554,652
Stockholders' equity:
Preferred stock, no par value, 1,000,000 share
authorized, none issued or outstanding
Common stock, no par value, 4,000,000 shares authorized, issued
and outstanding 1,985,003 at June 30, 1996,and 1,962,067 at
December 31, 1995 9,999,907 9,864,598
Retained earnings 8,026,801 7,445,338
Unrealized (losses) gains on investment securities available for sale (58,520) 115,972
------------ ------------
Total stockholders' equity 17,968,188 17,425,908
------------ ------------
Total liabilities and stockholders' equity $287,761,621 $252,980,560
============ ============
Book value per share $9.05 $8.88
============ ============
Tangible book value per share $8.57 $8.39
============ ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
EXHIBIT A
FIRST STATE BANCORPORATION AND SUBSIDIARY
Consolidated Condensed Statements of Operations
For the three and six months ended June 30, 1996, and 1995
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995
----------- ------------ ----------- ----------
<S> <C> <C> <C> <C>
Interest Income
Interest on fees and loans $5,693,538 $4,528,410 $10,904,724 $8,686,749
Interest on investment securties:
Taxable 474,192 413,424 954,423 839,778
Non-taxable 54,963 31,923 108,531 58,900
Federal funds sold 28,754 36,932 94,562 71,891
----------- ---------- ----------- ----------
Total interest income 6,251,447 5,010,689 12,062,240 9,657,318
----------- ---------- ----------- ----------
Interest expense:
Deposits 1,954,273 1,430,432 3,881,264 2,669,486
Short-term borrowings 219,004 169,770 335,889 287,387
Long-term debt and capital leases 111,654 112,011 218,626 220,501
---------- ---------- ------------ ----------
Total interest expense 2,284,931 1,712,213 4,435,779 3,177,374
---------- ---------- ----------- ----------
Net interest income before provision for loan losses 3,966,516 3,298,476 7,626,461 6,479,944
Provision for loan losses 515,903 117,500 634,403 209,000
---------- ---------- ------------ ----------
Net interest income after provision for loan losses 3,450,613 3,180,976 6,992,058 6,270,944
Other Income
Service Charges on deposit accounts 270,778 238,227 530,951 471,981
Other banking service fees 220,186 54,209 378,479 107,331
Loss from equity investment - (70,000) - (100,000)
Gain on sale of investment securities - (26,997) 156 (26,997)
Other 107,806 92,636 226,860 175,592
---------- ---------- ----------- ----------
Total other income 598,770 288,075 1,136,446 627,907
---------- ---------- ----------- ----------
Other Expenses:
Salaries and employee benefits 1,550,089 1,149,037 2,997,593 2,318,872
Occupancy 423,423 329,880 835,679 632,979
Data Processing 320,697 40,923 490,627 82,033
Credit Card interchange 140,427 - 233,897 -
Equipment 273,872 181,655 529,665 316,333
Legal and accounting 85,811 55,990 165,381 120,270
Marketing 158,562 122,726 319,651 221,865
Other real estate owned expenses (3,153) 25,999 7,867 62,755
FDIC insurance premiums 500 94,884 1,000 189,681
Amortization of goodwill 47,238 45,570 94,474 91,140
Other 611,169 530,169 1,268,934 1,023,632
---------- ---------- ------------ ----------
Total other expenses 3,608,635 2,576,833 6,944,768 5,059,560
---------- ---------- ----------- ----------
Income before income taxes 440,748 892,218 1,183,736 1,839,291
Income tax expense 165,546 311,000 403,939 653,000
---------- ---------- ----------- ----------
Net income $ 275,202 $ 581,218 $ 779,797 $1,186,291
========== ========== =========== ==========
Earnings per common and common equivalent share $0.13 $0.28 $0.38 $0.58
========== ========== =========== ==========
Earnings per common share-assuming full dilution $0.13 $0.26 $0.36 $0.52
========== ========== =========== ==========
Dividends per common share $0.05 $0.04 $0.10 $0.08
========== ========== =========== ==========
</TABLE>
See Accompanying notes to consolidated condensed financial statements.
<PAGE>
EXHIBIT A
FIRST STATE BANCORPORATION AND SUBSIDIARY
Consolidated Condensed Statements of Cash Flows
For the three and six months ended June 30, 1996, and 1995
<TABLE>
<CAPTION>
Three months Three months Six months Six months
ended ended ended ended
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Operating activities:
Net Income $ 275,202 $ 581,218 $ 779,797 $ 1,186,291
---------- ----------- ----------- -----------
Adjustments to reconcile net income to cash provide by operations:
Provisions for loan losses 515,903 117,500 634,403 209,000
Provision for decline in value of other real estate owned - - - 30,000
Depreciation and amortization 383,094 268,592 686,951 520,469
Loss (gain) on sale of investment securities available for sale - 26,997 (156) 26,997
Loss from credit card operation - 70,000 - 100,000
Increase in accrued interest receivable (923,667) (170,009) (791,006) (86,056)
Decrease (increase) in other assets, net 416,632 (296,660) 173,473 (661,238)
Increase (decrease) in other liabilities, net (424,551) (319,999) (65,105) 20,857
----------- ----------- ----------- -----------
Total adjustments (32,589) (303,579) 638,560 160,029
----------- ----------- ----------- -----------
Net cash provided by operating activities 242,613 277,639 1,418,357 1,346,320
----------- ----------- ----------- -----------
Cash flows from investing activities:
Net increase in loans (20,991,549) (11,696,139) ( 38,763,899) ( 16,063,310)
Purchase of investment securities available for sale (454,400) - (3,606,000) (494,065)
Maturity of investment securities available for sale 1,000,000 17,166 6,000,000 1,017,166
Purchase of investment securities held to maturity (3,743,339) (570,614) (6,243,339) (5,548,648)
Maturity of investment securities held to maturity 1,025,000 5,000 6,135,000 5,505,000
Sale of investment securities available for sale - 3,971,749 500,156 3,971,749
Purchases of premises and equipment (640,950) (1,742,602) (1,152,682) (3,199,252)
Sales of premises and equipment 1,209,483 - 1,209,483 -
Sale of other real estate owned - 497,327 67,917 497,327
Payment received on loans classified as other real estate owned 458 118,494 958 221,885
Acquisition of other real estate owned - - (145,156) -
----------- ----------- ----------- ----------
Net cash used in investing activities (22,595,297) (9,399,619) (35,997,562) (14,092,148)
----------- ----------- ----------- -----------
Cash flows from financing activities:
Net increase in interest bearing deposits 3,906,340 14,127,224 12,704,374 16,555,052
Net increase (decrease) in non-interest bearing deposits 5,660,804 136,082 6,913,119 (591,238)
Net increase (decrease) in securities sold under repurchase
agreements 2,116,034 (1,188,911) 2,732,998 (1,031,457)
Borrowings on long term debt and capital lease obligations - - - 250,000
Federal Home Loan Bank borrowings 8,000,000 5,000,000 8,000,000 5,000,000
Payments on long-term debt and capital lease obligations (8,395) (48,155) (16,605) (94,306)
Federal funds purchased 3,970,000 - 3,970,000 -
Issuance of common stock 37,113 - 135,309 -
Dividends paid (99,251) (62,784) (198,334) (125,571)
----------- ----------- ----------- -----------
Net Cash provided by financing activities 23,582,645 17,963,456 34,240,861 19,962,480
----------- ----------- ----------- -----------
Increase (decreae) in cash and cash equivalents 1,229,961 8,841,476 (338,344) 7,216,652
Cash and cash equivalents at beginning of period 13,218,961 12,569,413 14,787,266 14,194,237
----------- ----------- ----------- -----------
Cash and cash equivalents at end of period $14,448,922 $21,410,889 $14,448,922 $21,410,889
=========== =========== =========== ===========
Supplemental disclosure of noncash investing activities:
Additions to loans in settlement of other real estate owned - $ 73,419 - $ 73,419
=========== =========== =========== ===========
Additions to other real estate owned in settlement of loans $ 143,395 $ 128,291 $ 271,635 $ 128,291
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
EXHIBIT A
FIRST STATE BANCORPORATION AND SUBSIDIARY
Notes to Consolidated Condensed Financial Statements
(Unaudited)
1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The accompanying consolidated condensed financial statements are unaudited and
include the accounts of First State Bancorporation (the "Company") and its
subsidiary, First State Bank of Taos (100% owned).
All significant intercompany accounts and transactions have been eliminated.
Information contained in the consolidated condensed financial statements and
notes thereto of the Company should be read in conjunction with the Company's
consolidated financial statements and notes thereto contained in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1995.
The consolidated condensed financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting only of normally recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three and six month period ended June 30, 1996, are not necessarily indicative
of the results that may be expected for the year ending December 31, 1996.
Net income per common share and common equivalent share are computed by dividing
net income applicable to common stock by the total of the weighted average
number of common shares outstanding and any additional dilutive effect of stock
options and warrants outstanding during the respective periods. The dilutive
effect of stock options and warrants is computed using the average market price
of the Company's common stock for the period.
Net income per common share, assuming full dilution, is computed based on the
weighted average number of common shares outstanding during the period, and any
additional dilutive effect of stock options and warrants during the period. The
dilutive effect of outstanding stock options and warrants is computed using the
greater of the closing price or the average market price of the Company's common
stock for the period. Net income per common share, assuming full dilution, also
includes the dilution which would result if the convertible debentures
outstanding during the period had been converted at the beginning of the period.
The number of shares used in the net income per share calculations at June 30,
1996, and 1995, are as follows:
<TABLE>
<CAPTION>
For the three months For the six months
ended ended
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Earnings per common and common 2,078,060 2,048,114 2,075,378 2,046,100
equivalent share (primary) ========= ========= ========= =========
Earnings per common share-assuming full 2,641,171 2,595,733 2,639,197 2,593,719
dilution ========= ========= ========= =========
</TABLE>
The June 30, 1995, shares have been adjusted for a 5-for-4 common stock split
which occurred on November 20, 1995.
<PAGE>
EXHIBIT 3.3
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
FIRST STATE BANCORPORATION
Pursuant to the provisions of Section 53-13-4 of the New Mexico Business
Corporation Act (Chapter 53, Articles 11 through 18 NMSA 1978), FIRST STATE
BANCORPORATION hereby adopts the following Articles of Amendment to its Articles
of Incorporation:
ARTICLE I.
The name of the corporation is FIRST STATE BANCORPORATION (the "Company").
ARTICLE II.
The following amendment to the Company's articles of incorporation was
adopted by the shareholders of the Company on June 7, 1996, in the manner
prescribed by the New Mexico Business Corporation Act:
ARTICLE 6
Section 6.1. The number of directors shall be fixed as provided in
the Bylaws of the Corporation (the "Bylaws"), but in no case shall the
number of directors elected by the holders of the Common Stock be less than
nine, or greater than fifteen. The Board of Directors shall be divided into
three classes, designated "Class I," "Class II," and "Class III." The
number of directors in each class elected by the holders of the Common
Stock, shall be as nearly equal as possible. The term of directors in Class
I shall be initially one year and thereafter three years. The term of
directors in Class II shall be initially two years and thereafter three
years. The term of directors in Class III shall be three years. The initial
term for each of the foregoing classes shall commence on the election of
directors
<PAGE>
at the annual meeting of shareholders in 1996. At each annual meeting of
shareholders commencing with the annual meeting in 1997, a number of
directors equal to the number of the class whose term expires at the
meeting shall be elected (unless the number of directors in such class has
been increased or decreased, in which case the larger or smaller number
shall be elected) by the affirmative vote of the holders of the majority of
the shares represented at the meeting either in person or by proxy and
entitled to vote on the election of directors. Notwithstanding the
foregoing, each director shall hold office until his or her successor is
chosen and qualified in his or her stead.
Newly created directorships resulting from any increase in the number
of directors or any vacancies in the Board of Directors resulting from
death, resignation, retirement, disqualification, removal from office, or
other cause may be filled by a majority vote of the directors then in
office (even though the number of directors then in office may constitute
less than a quorum). A director elected to fill a vacancy shall be elected
for the unexpired term of his or her predecessor in office. A director
elected to fill an increase in the number of directors may be elected by
the Board of Directors for a term of office continuing only until the next
election of directors by the shareholders.
Any repeal or modification of this Section 6.1 by the shareholders of
the corporation shall not adversely affect any right or protection of a
director of the Corporation in respect of any act or omission before the
repeal or modification.
2
<PAGE>
ARTICLE III.
The number of shares of the Company's common stock outstanding on June
7, 1996 was 1,981,667 and the number of shares entitled to vote on the amendment
was 1,981,667. No shares of any class were entitled to vote as a class.
ARTICLE IV.
The number of shares voted for the amendment was 1,016,855. The
number of shares voted against the amendment was 309,655.
ARTICLE V.
The following amendment to the Company's articles of incorporation was
adopted by the shareholders of the Company on June 7, 1996, in the manner
prescribed by the New Mexico Business Corporation Act:
ARTICLE 11
Subject to the rights of holders of any class or series of shares
ranking prior to the Common Stock in respect of dividends or assets, only
persons who are nominated in accordance with the procedures in this Article
shall be eligible to be nominated as directors at any meeting of the
shareholders of the Corporation. At any meeting of the shareholders of the
Corporation, nominations of persons for election to the Board of Directors
may be made (1) by or at the direction of the Board of Directors or (2) by
any shareholder of the Corporation who is a shareholder of record at the
time of giving the notice provided for in this Article, who shall be
entitled to vote at the meeting, and who complies with the notice
procedures set forth in this Article. For a nomination to be properly
brought before a shareholders' meeting by a shareholder, timely written
notice shall be
3
<PAGE>
made to the Secretary of the Corporation. The shareholder's notice shall
be delivered to, or mailed and received at, the principal office of the
Corporation not less than 35 days nor more than 50 days before the meeting;
provided, however, less than 45 days notice or prior public disclosure of
the date of the meeting is given or made to shareholders, notice by the
shareholders to be timely must be received not later than the close of
business on the tenth day following the day on which the notice of the
meeting was mailed or the public disclosure was made. The shareholder's
notice shall set forth (1) as to each person whom the shareholder proposed
to nominate for election or reelection as a director, all information
relating to such person that is required to be disclosed in solicitations
of proxies for election of directors, or is otherwise required by
applicable law (including the person's written consent to being named as a
nominee and to serving as a director if elected); and (2)(a) the name and
address, as they appear on the Corporation's books, of the shareholder, (b)
a description of all arrangements or understandings between the shareholder
and each nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination or nominations are to be made by
the shareholder. The shareholder shall also comply with all applicable
requirements of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and the rules and regulations thereunder with respect to the matters
in this paragraph. If the chairman of the meeting determines and declares
at the meeting that a nomination was not made in accordance with the
procedures prescribed by this Article, the nomination shall not be
accepted.
4
<PAGE>
At any meeting of the shareholders of the Corporation, only such
business shall be conducted as has been brought before the meeting (1) by
or at the direction of the Board of Directors or (2) by any shareholder of
the Corporation who is a shareholder of record at the time of giving the
notice provided for in this Article, who shall be entitled to vote at the
meeting, and who complies with the notice procedures set forth in this
Article. For business to be properly brought before a shareholder's
meeting by a shareholder, timely written notice shall be made to the
Secretary of the Corporation. The shareholder's notice shall be delivered
to, or mailed and received at, the principal office of the Corporation not
less than 35 days or more than 50 days before the meeting; provided,
however, if less than 45 day notice or prior public disclosure of the date
of the meeting is given or made to shareholders, notice by the shareholder
to be timely must be received not later than the close of business on the
tenth day following the day on which the notice of the meeting was mailed
or the public disclosure was made. The shareholder's notice shall set
forth (1) a brief description of the business desired to be brought before
the meeting and the reasons for considering the business, and (2)(a) the
name and address, as they appear on the Corporation's books, of the
shareholder, (b) a representation that the shareholder is a holder of
record of the Common Stock entitled to vote at the meeting on the date of
the notice and intends to appear in person or by proxy at the meeting to
present the business specified in the notice, and (c) any material interest
of the shareholder in the proposed business. The shareholder shall also
comply with all applicable requirements of the 1934 Act and the rules and
regulations thereunder with respect to the matters set forth in this
5
<PAGE>
paragraph. If the chairman of the meeting determines and declares at the
meeting that the proposed business was not brought before the meeting in
accordance with the procedures prescribed by this paragraph, the business
shall not be considered.
The notice procedures set forth in this Article 11 do not change or
limit any procedures the Corporation may require in accordance with
applicable law with respect to the inclusion of matters in the
Corporation's proxy statement.
ARTICLE VI.
The number of shares of the Company's common stock outstanding on June 7,
1996 was 1,981,667 and the number of shares entitled to vote on the amendment
was 1,981,667. No shares of any class were entitled to vote as a class.
ARTICLE VII.
The number of shares voted for the amendment was 1,077,601. The number of
shares voted against the amendment was 250,423.
ARTICLE VIII.
The following amendment to the Company's articles of incorporation was
adopted by the shareholders of the Company on June 7, 1996, in the manner
prescribed by the New Mexico Business Corporation Act:
ARTICLE 12
These Articles of Incorporation may be amended by the affirmative vote
of the holders of a majority of the shares of the Common Stock.
Notwithstanding the foregoing or any other provision of these Articles
of Incorporation or the Bylaws (and notwithstanding that a lesser
percentage may be
6
<PAGE>
specified by law), to amend, alter, change, or repeal, or to adopt any
provisions inconsistent with, Section 6.1, Article 11 or this paragraph of
Article 12, or to remove any director of the Corporation without cause, the
affirmative vote of the holders of at least two-thirds of the Common Stock
shall be required.
ARTICLE IX.
The number of shares of the Company's common stock outstanding on June 7,
1991 was 1,981,667 and the number of shares entitled to vote on the amendment
was 1,981,667. No shares of any class were entitled to vote as a class.
ARTICLE X.
The number of shares voted for the amendment was 1,059,223. The number of
shares voted against the amendment was 255,587.
DATED: June 7, 1996
FIRST STATE BANCORPORATION
By: Michael Stanford
----------------
Michael Stanford, President
By: H. Patrick Dee
--------------
H. Patrick Dee, Secretary
Under the penalty of perjury, the undersigned declares that the foregoing
document executed by the corporations and that the statements contained therein
are true and correct to the best of my knowledge.
Michael Stanford
----------------
Michael Stanford
7
<PAGE>
EXHIBIT 10.14
EXECUTIVE INCOME PROTECTION PLAN
THIS PLAN is adopted this 19th day of April, 1996, by First State
Bancorporation, a corporation organized under the laws of the State of New
Mexico ("Corporation"), effective as of April 19, 1996 (the "Effective Date").
RECITALS
1. Corporation desires to establish this Executive Income Protection Plan
to protect Corporation against loss of key personnel during periods of exposure
to changes in control, and from the difficulty and expense of replacing key
employees who leave or are unable to perform at their optimum level during such
a period.
2. The President of Corporation has, pursuant to the powers vested in him
by Corporation's Board of Directors, duly executed this Plan.
PLAN
1. Definitions.
-----------
a. "Board" or "Board of Directors" shall mean the Board of Directors
------------------------------
of Corporation.
b. "Control Change" shall mean:
----------------
(1) a sale or sales (including an exchange) of shares of
Corporation, other than pursuant to a public offering, at one or
more times by Corporation, a stockholder or stockholders of
Corporation, or by any combination of the foregoing, which in the
aggregate results in the beneficial ownership of more than fifty
percent (50%) of the combined voting power of Corporation's
outstanding securities after such sale or sales by one or more
stockholders who are not stockholders of Corporation on the date of
this Plan and who are not controlled after such sale or sales,
directly or indirectly, by one or more of the stockholders of
Corporation on the date of this Plan; or
(2) a sale or sales by Corporation of all or substantially all of
its assets
<PAGE>
to one or more persons or entities who are not stockholders of
Corporation on the date of this Plan and who are not controlled
after such sale or sales, directly or indirectly, by one or more of
such stockholders; or
(3) a merger or other combination in which Corporation is either
the surviving or disappearing corporation, which results in the
beneficial ownership of more than fifty percent (50%) of the
combined voting power of the outstanding securities of the
surviving corporation by one or more persons or entities who are
not stockholders of Corporation on the date of this Plan and who
are not controlled after such merger or other combination, directly
or indirectly, by one or more of such stockholders; or
(4) the stockholders of Corporation have approved any plan or
proposal for the liquidation or dissolution of Corporation; or
(5) during any period of two consecutive years, individuals who at
the beginning of the period constitute the entire Board of
Directors shall cease for any reason to constitute a majority
thereof unless the election or the nomination for election by
Corporation's shareholders of each new director was approved by a
vote of at least two-thirds of the directors then still in office
who were directors at the beginning of the period.
c. "Compensation" shall mean the sum of: (i) an Eligible Employee's
--------------
average taxable compensation from Corporation; (ii) the Employee's average
elective salary reduction contributions to a plan under Internal Revenue Code
Section 401(k) and/or 125; and (iii) the product of the average percent of
covered payroll contributed by Corporation to Corporation's 401(k) profit
sharing plan multiplied by the sum of (i) and (ii), all for the five calendar
years preceding the Control Change.
d. "Corporation" shall mean First State Bancorporation, a New Mexico
-------------
corporation.
e. "Eligible Employee" shall mean each individual whom Corporation
------------------
designates in writing as a participant in this Plan; the Eligible Employees are
set forth on Exhibit
2
<PAGE>
A to this Plan.
f. "Fringe Benefit" shall mean Corporation's welfare benefit plans as
----------------
that term is defined in Section (3)(1) of the Employee Retirement Income
Security Act of 1974, as amended .
g. "Misconduct" shall exist if an Eligible Employee:
------------
(1) fails, on a willful and continuing basis, to devote his full
business time to Corporation's business affairs (other than due to
illness or incapacity, vacations, incidental civic activities and
incidental personal time); or
(2) is convicted of a crime involving dishonesty or breach of
trust; or
(3) participates in an act of fraud, embezzlement or theft
(regardless of whether a criminal conviction is obtained); or
(4) makes an unauthorized disclosure of confidential information
that results in significant injury to Corporation; or
(5) is investigated by the Comptroller of the Currency, the Federal
Bureau of Investigation, or the State of New Mexico for diversion
of Bank assets.
h. "Plan Administrator" shall mean a committee of not more than five
--------------------
and not fewer than two individuals appointed by Corporation in writing to
administer this Plan.
i. "Reduction in Position" shall occur if an Eligible Employee is:
-----------------------
(1) removed as an officer or director; or
(2) experiences significant decrease in managerial or supervisory
authority; or
(3) experiences a reduction in salary or bonus; or
(4) is required by Corporation to relocate to an office more than
fifty miles from his location prior to the Control Change; or
(5) is reduced in the rate of his awards under any stock option
plan in effect prior to the Control Change; or
(6) experiences a material adverse change in his terms and
conditions
3
<PAGE>
of employment.
j. "Total Disability" shall mean that the Eligible Employee is unable,
------------------
because of a physical or mental incapacity, to perform his duties as an Employee
of Corporation for a period of at least six (6) continuous months and the
incapacity is expected to be permanent and to continue for the remainder of the
Eligible Employee's life. If, as a result of the Eligible Employee's Total
Disability, the Eligible Employee shall have been absent from his duties with
Corporation on a full-time basis for six (6) continuous months and he has not
returned to the full-time performance of his duties within thirty (30) days of
his receipt of a written notice from Corporation notifying him that he is
Totally Disabled pursuant to the terms of this Plan, Corporation may terminate
his employment on account of Total Disability.
2. Income Protection Benefit. In the event that an Eligible Employee (i)
-------------------------
resigns; or (ii) is discharged other than because of Total Disability, death, or
Misconduct; or (iii) experiences a Reduction in Position other than because of
Total Disability, death, or Misconduct, within a three (3) year period beginning
on the Control Change, the Eligible Employee shall have income protection
benefits comprised of the following:
a. A compensation benefit, payable in a single sum, equal to the
number of years' Compensation set forth for each Eligible Employee in Exhibit A,
as it may be modified from time-to-time.
b. Provision of the same level of Fringe Benefits as existed on the
date of the Control Change for a period ending three years after the Control
Change including, without limitation, any plan or arrangement to receive and
exercise stock options and/or stock appreciation rights, restricted stock or
grants thereof in which the Eligible Employee is participating on the date of
the Control Change (or plans or arrangements providing him with substantially
similar benefits).
c. Corporation will indemnify each Eligible Employee against any legal
expenses he may incur in litigation against Corporation, any shareholder of
Corporation, or any other person, to enforce or defend his rights under this
Plan; further, Corporation shall indemnify, defend and hold harmless each
Eligible Employee against all losses, claims, damages, costs, expenses
(including attorney fees), liabilities, judgments or amounts paid in settlement
(which
4
<PAGE>
settlement shall require the prior written consent of Corporation, which consent
shall not be unreasonably withheld) of or in connection with any claim, action,
suit, proceeding or investigation which arises out of such person serving in his
capacity as an Employee of Corporation and pertaining to any matter or fact
arising, existing or occurring before the Control Change (including, without
limitation, the events giving rise to the Control Change) to the full extent
permitted under applicable New Mexico or federal law (including, but not limited
to, Title XII of the United States Code) and the articles of incorporation and
bylaws of Corporation as in effect at the time of the Control Change.
Corporation will advance expenses incurred by such persons in connection with
such claims to the full extent permitted by such laws, articles of incorporation
and bylaws.
These indemnification obligations of Corporation will continue in force for
a period of five (5) years after the date on which the Control Change is
effective, and will apply to any claims asserted or made within such period.
Such indemnification shall not be due if an arbitrator and/or court of law, as
appropriate under Section 13, determines that the Eligible Employee's position
in the litigation was not reasonable and/or that the Eligible Employee did not
pursue such litigation in good faith. Such arbitrator or court of law shall
presume that the Eligible Employee's position in the litigation was reasonable
and pursued in good faith, without regard to whether the litigation was resolved
in the Eligible Employee's favor.
Corporation shall use its best efforts to maintain in effect for three (3)
years after a Control Change officers and directors liability insurance with
respect to claims arising from facts or events which occurred before the Control
Change of at least the same coverage and amounts, and containing terms and
conditions no less advantageous, as the coverage provided by Corporation prior
to the Control Change.
d. In the event that the Eligible Employee is not fully vested under
the terms of Corporation's qualified retirement plan(s), Corporation shall pay
the Eligible Employee an amount equal to the Employee's non-vested accrued
benefit in such plan(s), determined as of the last valuation date under such
plan(s).
e. Corporation will pay for out-placement services for the Eligible
Employee, up to maximum of thirty percent (30%) of Compensation.
5
<PAGE>
f. In the event that Corporation has purchased a split dollar life
insurance policy on the life of an Eligible Employee, Corporation shall make a
lump sum payment at the same time as the payment in (a) above. Corporation
shall remit to the insurance company issuing any such policy the lesser of (i)
the remaining premiums payable by Corporation on the same basis as prior to the
Control Change as are required to put the policy on a "paid up" basis for the
ten year period beginning on the date the policy was issued; or (ii) the maximum
premium that can be prepaid without converting such policy to a modified
endowment policy, in the written opinion of Corporation's tax counsel. In the
event that the insurance company issuing such policy will not accept a single
sum payment of the amount of Corporation's remaining premiums for the balance of
the ten year period, Corporation shall pay such amount into an escrow account in
the name of the Eligible Employee, and the escrow account shall pay such
premiums as they become due. Such payment shall equal the discounted present
value (using the applicable federal rate for obligations) of the portion of
premiums that Corporation had paid prior to the Control Change. Any amounts
remaining in the escrow account when all Corporation premiums have been fully
paid shall be remitted to Corporation.
g. In the event that the present value of the lump sum severance
payments and other payments and benefits to be paid under this Section 2 either
alone or together with other payments which the Eligible Employee has the right
to receive from Corporation, would constitute a "parachute payment" (as defined
in Internal Revenue Code Section 280G), Corporation shall pay the Eligible
Employee an amount equal to all excise taxes payable by the Eligible Employee
under Internal Revenue Code Section 4999.
3. Claim for Benefits. Within two (2) weeks after the Eligible Employee's
------------------
resignation, discharge or Reduction in Position following a Control Change, the
Eligible Employee shall present a written claim for benefits under the Plan,
specifically referring to the Plan, to the Plan Administrator. The Plan
Administrator shall notify the President of Corporation, who will deliver
written notice within two (2) weeks to the Plan Administrator if Corporation
intends to assert that the discharge or resignation or Reduction in Position was
caused by Misconduct or Total Disability. The Plan Administrator shall deliver
written notice to the Eligible Employee of such dispute, and the dispute shall
be resolved pursuant to the arbitration procedure
6
<PAGE>
or litigation, as appropriate under Section 13. All such notices shall be
effected by delivery in person, or by sending the notice by certified mail,
return receipt requested, to Corporation at 111 Lomas Boulevard NE, Albuquerque,
New Mexico 87102, or to the Eligible Employee at his last address on
Corporation's records.
4. Payment of Income Protection Benefits. Corporation shall pay each
-------------------------------------
Eligible Employee who is entitled to benefits under Subsection 2(a) in a single
sum in cash, not later than the first day of the second month following the
Eligible Employee's discharge, resignation or Reduction in Position unless
Corporation has notified the Eligible Employee that there is a dispute as
provided in Section 3 above. If any Eligible Employee dies while any amounts are
still payable to him hereunder, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Plan to the Eligible
Employee's estate.
5. Limitation on Payment. No payment shall be made under this Plan to the
---------------------
extent such payment violates the laws of the State of New Mexico or the United
States.
6. No Assignment. The right of any Eligible Employee or any other person
-------------
to the payment of compensation or other benefits under this Plan shall not be
assigned, alienated, transferred, pledged, hypothecated or encumbered except by
will or by the laws of descent and distribution.
7. Incompetence. If the Plan Administrator finds that any person to whom
------------
any payment is payable under this Plan is unable to care for his affairs because
of illness or accident, or is a minor, any payment due (unless a prior claim
therefor shall have been made by a duly appointed guardian, committee or other
legal representative) may be paid to the person's spouse, child, parent, brother
or sister, or to any person deemed by the Plan Administrator to have incurred
expense for such person otherwise entitled to payment, in such manner and
proportions as the Plan Administrator may determine. Any such payment shall be
a complete discharge of all liabilities of Corporation under this Plan.
8. No Right of Employment. Nothing contained herein confers upon any
----------------------
Eligible Employee the right to continue in the employ of Corporation at any
time, nor abridges the right of an Eligible Employee to resign from the employ
of Corporation, or the right of Corporation to discharge any employee at any
time for any reason.
7
<PAGE>
9. No Obligation to Mitigate Damages. No Eligible Employee shall be
---------------------------------
required to mitigate damages arising from failure of Corporation to make any
payment provided for under this Plan by seeking other employment, performing
other services or otherwise; nor shall the amount of any payment under this Plan
be reduced by any compensation earned by an Eligible Employee.
10. Other Benefit Plans. Any amounts payable under this Plan shall not be
-------------------
deemed salary or other compensation to a Eligible Employee for the purpose of
computing benefits to which he may be entitled under any qualified retirement
plan or pension or welfare plan or other arrangement of Corporation for the
benefit of its employees.
11. Action by Corporation. Any action required to be taken by Corporation
---------------------
under the Plan shall be by written resolution of the Board of Directors of
Corporation, the President of Corporation, or a person or persons authorized by
the Board or President.
12. Corporation's Determinations Final. The records of Corporation as to
----------------------------------
any Eligible Employee's Compensation will be conclusive against all persons
unless determined to Corporation's satisfaction to be incorrect.
13. Resolution of Dispute. Any and all disputes arising out of, under, in
---------------------
connection with, or relating to this Plan, the breach or alleged breach of this
Plan, or its enforceability, shall be settled either by litigation in the courts
of the United States or the State of New Mexico or by arbitration in
Albuquerque, New Mexico, such forum to be selected by the Eligible Employee, in
his discretion. In the event the Eligible Employee elects to resolve disputes
through arbitration, such arbitration shall be conducted before a single
arbitrator under the terms set forth in this Plan and otherwise in accordance
with the federal arbitration act and the Rules of the American Arbitration
Association. Judgement upon an arbitration award may be entered in any court
having jurisdiction of the matter. The duty to arbitrate shall survive the
cancellation or termination of this Plan.
a. The arbitrator shall be selected in the following manner:
(1) The parties shall select an arbitrator.
(2) If the parties are unable to agree on an arbitrator within
thirty (30) days of the demand for arbitration, then the American
Arbitration Association shall submit a list of seven individuals to
the parties and the
8
<PAGE>
arbitrator shall be selected by the parties alternately striking
names from the list of seven with the Eligible Employee making the
first strike.
b. The arbitrator designated and acting under this Plan shall
determine the controversy in accordance with the laws of the State of New Mexico
and applicable federal law as applied to the facts as he finds them.
c. The decision of the arbitrator shall be rendered within thirty (30)
days after the hearing by the arbitrator, unless otherwise agreed to in writing
by all parties, and such decision shall be in writing and in duplicate, one
counterpart to be delivered to each party.
d. The parties desire that, in the event the Eligible Employee
elects to resolve disputes by arbitration, the enforceability of this
arbitration provision and the proceedings thereunder be subject to the fullest
extent possible to the provisions of the federal arbitration act.
14. Liability. No member of the Plan Administrator shall be liable to any
---------
person for any action taken or omitted in connection with the interpretation and
administration of this Plan unless attributable to his own willful misconduct or
lack of good faith.
15. Entire and Binding Agreement. No agreements or representations, oral
----------------------------
or otherwise, express or implied, with respect to the subject matter hereof have
been made which are not set forth expressly in this Plan. The invalidity or
unenforceability of any provision of this Plan shall not effect the validity or
enforceability of any other provision of this Plan, which shall remain in full
force and effect. This Plan shall be binding upon and inure to the benefit of
Corporation, its successors and assigns and each Eligible Employee and his
heirs, executors, administrators and legal representatives.
16. Controlling Law. This Plan shall be construed in accordance with and
---------------
governed by the laws of the State of New Mexico, and applicable federal law.
17. Gender and Number. The pronouns "he", "him" and "his" hereunder shall
-----------------
also refer to similar pronouns of the feminine gender unless otherwise qualified
by the context.
18. Amendment and Termination. This Plan (including Exhibit A) may be
-------------------------
amended or terminated at any time by written resolution of the Board of
Directors of First State Bancorporation, with the written consent of each
Eligible Employee; notwithstanding the foregoing, Corporation may add additional
Eligible Employees to Exhibit A without the consent
9
<PAGE>
of Eligible Employees who are then listed on Exhibit A.
19. Termination of Plan. This Plan shall terminate on January 1, 2003,
-------------------
unless a Control Change has occurred on or before December 31, 2002, or
Corporation, by written resolution of the Board, elects to continue the Plan for
one or more one year terms.
IN WITNESS WHEREOF, the duly authorized officers of Corporation have executed
this Plan.
FIRST STATE BANCORPORATION
ATTEST:
By: H. Patrick Dee By: Eloy Jeantete
Its Secretary Its Chairman
10
<PAGE>
EXHIBIT
ELIGIBLE EMPLOYEES AND COMPENSATION BENEFITS AS OF APRIL 1, 1996
<TABLE>
<CAPTION>
YEARS OF COMPENSATION
BENEFIT UNDER
ELIGIBLE EMPLOYEE TITLE SUBSECTION 2(a)
- -----------------------------------------------------------------------------------
<S> <C> <C>
Michael R. Stanford President and Chief Executive Officer 3
- -----------------------------------------------------------------------------------
H. Patrick Dee Executive Vice President 3
- -----------------------------------------------------------------------------------
Robert L. Chavez Senior Vice President 2
- -----------------------------------------------------------------------------------
Brian C. Reinhardt Senior Vice President 2
- -----------------------------------------------------------------------------------
Patrick G. Cahalan Senior Vice President 2
- -----------------------------------------------------------------------------------
</TABLE>
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
CONDENSED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 14,448,922
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 14,361,979
<INVESTMENTS-CARRYING> 21,287,957
<INVESTMENTS-MARKET> 21,090,000
<LOANS> 222,087,905
<ALLOWANCE> 2,220,879
<TOTAL-ASSETS> 287,761,621
<DEPOSITS> 238,464,361
<SHORT-TERM> 23,616,472
<LIABILITIES-OTHER> 1,962,600
<LONG-TERM> 5,750,000
0
0
<COMMON> 18,026,708
<OTHER-SE> (58,520)
<TOTAL-LIABILITIES-AND-EQUITY> 287,761,621
<INTEREST-LOAN> 10,904,724
<INTEREST-INVEST> 1,157,516
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 12,062,240
<INTEREST-DEPOSIT> 3,881,264
<INTEREST-EXPENSE> 4,435,779
<INTEREST-INCOME-NET> 7,626,461
<LOAN-LOSSES> 634,403
<SECURITIES-GAINS> 156
<EXPENSE-OTHER> 6,944,768
<INCOME-PRETAX> 1,183,736
<INCOME-PRE-EXTRAORDINARY> 779,797
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 779,797
<EPS-PRIMARY> 0.38
<EPS-DILUTED> 0.36
<YIELD-ACTUAL> 5.65
<LOANS-NON> 1,086,000
<LOANS-PAST> 127,000
<LOANS-TROUBLED> 128,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,851,000
<CHARGE-OFFS> 322,000
<RECOVERIES> 58,000
<ALLOWANCE-CLOSE> 2,220,879
<ALLOWANCE-DOMESTIC> 2,220,879
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
