SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1998
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 33-60230
Albion Banc Corp.
(Exact name of registrant as specified in its charter)
Delaware 16-1435160
(State or other jurisdiction (IRS Employer
of incorporation or organization Identification No.)
48 North Main Street, Albion, New York 14411-0396
(Address of principal executive offices) (Zip Code)
(716) 589-5501
(Registrants telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
X Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding as of August 1,1998
Common Stock, $.01 par value 791,553 shares
ALBION BANC CORP.
INDEX
Page
Number
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statement of Financial Condition
June 30, 1998 (unaudited)and December 31, 1997 1
Consolidated Statement of Income (unaudited)
Three months ended June 30, 1998 and 1997 2
Consolidated Statement of Income (unaudited)
Six months ended June 30, 1998 and 1997 3
Consolidated Statement of Comprehensive Income (unaudited) 4
Three and six months ended June 30, 1998 and 1997
Consolidated Statement of Cash Flows (unaudited) 5
Six months ended June 30, 1998 and 1997
Notes to Consolidated Financial Information 6-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11-13
Part II. Other Information 15
Signatures 16
ALBION BANC CORP.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
June 30, December 31,
1998 1997
Assets (unaudited)
Cash and due from banks $ 1,327,414 $ 1,539,966
Federal funds sold 2,950,000 2,850,000
Investment securities:
Available for sale 4,758,505 4,034,900
Held to maturity (fair value of
$4,794,579 and $6,883,000, respectively) 4,750,146 6,833,577
Loans held for sale 123,417 550,340
Loans 57,075,403 52,743,312
Less-Allowance for loan losses (254,837) (276,300)
Net Loans 56,943,983 52,467,012
Accrued interest receivable 399,812 411,638
Federal Home Loan Bank (FHLB)stock, at cost 528,800 500,000
Premises and equipment, net 2,258,963 2,350,964
Other assets 200,797 180,852
Total Assets $74,118,420 $71,719,249
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing $ 3,029,560 $ 2,395,245
Interest-bearing 52,947,007 52,514,936
Total deposits 55,976,567 54,910,181
FHLB advances and other borrowings 10,184,967 9,200,526
Advances from borrowers for taxes & insurance 1,004,673 891,392
Other liabilities 656,031 562,318
Total Liabilities $67,822,238 $65,564,417
Shareholders' Equity:
Preferred stock, $.01 par value
500,000 shares authorized, none outstanding
Common stock, $.0033 par value
3,000,000 shares authorized, 791,553 and
789,258 shares issued, respectively 2,643 2,631
Capital surplus 2,403,348 2,383,434
Retained earnings 4,115,815 3,986,735
Treasury stock, 39,105 shares, at cost (221,595) (221,595)
Unearned ESOP shares (37,685) (44,638)
Accumulated other comprehensive income 33,656 48,265
Total Shareholders' Equity 6,296,182 6,154,832
Total Liabilities and Shareholders'
Equity $74,118,420 $71,719,249
The accompanying notes are an integral part of these consolidated financial
statements.
ALBION BANC CORP.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
Three Months Ended
June 30,
1998 1997
Interest income:
Interest and fees on loans $1,138,945 $1,019,868
Interest on investment securities
and federal funds sold 206,313 250,466
Total interest income 1,345,258 1,270,334
Interest expense:
Interest on deposits 599,604 554,371
Interest on borrowed funds 151,642 144,088
Total interest expense 751,246 698,459
Net interest income 594,012 571,875
Provision for loan losses 13,000 8,764
Net interest income after
provision for loan losses 581,012 563,111
Noninterest income:
Gain on sale of loans and real estate owned 3,840 6,717
Other noninterest income 92,757 77,324
Total noninterest income 96,597 84,041
Noninterest expense:
Salaries and employee benefits 260,658 234,479
Occupancy expenses 108,751 83,377
Deposit insurance premiums 8,639 11,584
Professional fees 31,672 30,553
Data processing fees 48,545 52,801
Other operating expenses 74,701 126,504
Total noninterest expense 532,966 539,298
Income before income tax expense 144,643 107,854
Income tax expense 54,650 57,730
Net income $ 89,993 $ 50,124
Basic earnings per common share $0.12 $0.07
Diluted earnings per common share $0.12 $0.07
The accompanying notes are an integral part of these consolidated financial
statements.ALBION BANC CORP
CONSOLIDATED STATEMENT OF INCOME (unaudited)
Six Months Ended
June 30, 1998
1998 1997
Interest income:
Interest and fees on loans $2,228,488 $2,026,335
Interest on investment securities 434,926 469,501
and federal funds sold
Total interest income 2,663,414 2,495,836
Interest expense:
Interest on deposits 1,209,587 1,082,884
Interest on borrowed funds 292,960 290,608
Total interest expense 1,502,547 1,373,492
Net interest income 1,160,867 1,122,344
Provision for loan losses 22,000 17,414
Net interest income after
provision for loan losses 1,138,867 1,104,930
Noninterest income:
Gain on sale of loans and real estate owned 15,400 6,717
Other noninterest income 179,303 191,246
Total noninterest income 194,703 197,963
Noninterest expense:
Salaries and employee benefits 466,186 473,013
Occupancy expenses 213,960 167,256
Deposit insurance premiums 17,191 22,709
Professional fees 60,027 60,972
Data processing fees 97,562 96,145
Other operating expenses 165,660 203,373
Total noninterest expense 1,020,586 1,023,468
Income before income tax expense 312,984 279,425
Income tax expense 120,750 115,963
Net income 192,234 163,462
Basic earnings per common share $0.26 $0.22
Diluted earnings per common share $0.25 $0.22
The accompanying notes are an integral part of these consolidated financial
statements.
ALBION BANC CORP.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Ended
June 30,
1998 1997
Net income $ 89,993 $ 50,124
Other comprehensive income, net of tax:
Unrealized gains on securities: 22,627
Unrealized holding losses arising
during period (6,910)
Less: reclassification adjustments for gains
included in net income 0 0
Other comprehensive (loss) gain (6,910) 22,627
Comprehensive income $ 83,083 $ 72,751
Six Months Ended
June 30,
1998 1997
Net income $192,234 $163,462
Other comprehensive income, net of tax:
Unrealized gains on securities: 15,336
Unrealized holding losses arising
during period (14,609)
Less: reclassification adjustments for gains
included in net income 0 0
Other comprehensive (loss) gain (14,609) 15,336
Comprehensive income $177,625 $178,798
The accompanying notes are an integral part of these consolidated financial
statements.
ALBION BANC CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) Six Months Ended
June 30,
1998 1997
Cash flows from operating activities:
Net Income $ 192,234 $ 163,462
Depreciation, amortization and accretion 162,118 79,019
Provision for loan losses 22,000 17,414
Net gain on sale of mortgage loans (15,400) (6,717)
Net gain on sale of real estate owned 0 (34,476)
ESOP expense 19,230 24,223
Originations of loans held for sale (802,094) (388,939)
Proceeds from sale of loans held for sale 1,244,417 506,570
Changes in operating assets and liabilities-
Decrease in other assets (8,119) (117,628)
Increase in other liabilities 103,373 59,409
Net cash provided by operating activities $ 917,759 $ 302,337
Cash flows from investing activities:
Proceeds from maturities of investment securities
held to maturity 2,050,064 3,100,000
Proceeds from maturities and calls of investment
securities available for sale 735,488 523,805
Purchases of investment securities held to maturity 0 (2,624,738)
Purchases of investment securities
available for sale (1,493,899)
Net increase in loans receivable (4,375,554) (1,083,608)
Proceeds from the sale of foreclosed real estate 0 254,586
Purchase of FHLB stock (28,800) (50,000)
Net purchase of fixed assets (26,804) (144,564)
Net cash used in investing activities (3,139,505) (24,519)
Cash flows from financing activities:
Net increase in demand deposits, NOW accounts
and money market accounts 2,532,568 733,637
Net (decrease) increase in time deposits (1,466,182) 3,095,946
Proceeds from FHLB and other borrowings 1,000,000 2,000,000
Payment on FHLB advances and other borrowings (15,559) (2,012,308)
Net increase in advances from borrowers for
taxes and insurance 113,281 38,936
Proceeds from exercise of stock options 7,649
Dividends paid (62,563) (75,923)
Net cash provided by financing activities 2,109,194 3,780,288
Net (decrease) increase in cash and cash equivalents (112,552) 4,058,106
Cash and cash equivalents at beginning of period 4,389,966 2,125,929
Cash and cash equivalents at end of period $4,277,414 $6,184,035
Cash paid during the period for:
Interest $1,502,547 $1,373,492
Income taxes 5,000 68,000
The accompanying notes are an integral part of these consolidated financial
statements.
ALBION BANC CORP.
NOTES TO CONSOLIDATED FINANCIAL INFORMATION
JUNE 30, 1998
NOTE 1 - BASIS OF PRESENTATION:
The unaudited interim financial information includes the accounts of Albion Banc
Corp. (the "Company", Albion Federal Savings and Loan Association (the
"Association") and New Frontier of Albion Corp. ("New Frontier"). The financial
information has been prepared in accordance with the Summary of Significant
Accounting Policies as outlined in the Company's Annual Report for the year
ended December 31, 1997, and in the opinion of management, contains all
adjustments necessary to present fairly the Company's financial position as
of June 30, 1998 and December 31, 1997, and its results of operations and
comprehensive income for the three month and six month period ended June 30,
1998 and 1997. All adjustments made to the unaudited interim financial
information were of a recurring nature.
NOTE 2 - COMPREHENSIVE INCOME:
In the first quarter, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 130, "Reporting Comprehensive Income." SFAS No. 130
establishes standards for reporting and displaying comprehensive income and its
components. Reclassification of financial statements for earlier periods
provided for comparative purposes is required. The Company has chosen to
disclose comprehensive income in a separate statement, in which the
components of comprehensive income are displayed net of income taxes. The
following table sets forth the related tax effects allocated to each element
of comprehensive for the three months and six months ended June 30, 1998 and
1997:
Three months ended June 30, 1998
Before-tax Tax Net-of-Tax
Amount Expense Amount
Unrealized losses on
securities:
Unrealized holding losses
arising during period $ (11,509) $ 4,599 $ (6,910)
Less: reclassification
adjustment for gains
realized in net income 0 0 0
Net unrealized loss (11,509) 4,599 (6,910)
Other comprehensive loss $ (11,509) $ 4,599 $ (6,910)
Three months ended June 30, 1997
Before-tax Tax Net-of-Tax
Amount Expense Amount
Unrealized losses on
securities:
Unrealized holding gains
arising during period $ 35,043 $(12,416) $ 22,627
Less: reclassification
adjustment for gains
realized in net income 0 0 0
Net unrealized gains 35,043 (12,416) 22,627
Other comprehensive income $ 35,043 $(12,416) $ 22,627
Six months ended June 30, 1998
Before-tax Tax Net-of-Tax
Amount Benefit Amount
Unrealized losses on
securities:
Unrealized holding losses
arising during period $ (24,268) $ 9,659 $(14,609)
Less: reclassification
adjustment for gains
realized in net income 0 0 0
Net unrealized loss (24,268) 9,659 (14,609)
Other comprehensive loss $ (24,268) $ 9,659 $(14,609)
Six months ended June 30, 1997
Before-tax Tax Net-of-Tax
Amount Expense Amount
Unrealized gains on
securities:
Unrealized holding gains
arising during period $ 22,939 $ (7,603) $ 15,336
Less: reclassification
adjustment for gains
realized in net income 0 0 0
Net unrealized gain 22,939 (7,603) 15,336
Other comprehensive income $ 22,939 $ (7,603) $ 15,336
The following table sets forth the components of accumulated other comprehensive
income for the six months ended June 30, 1998 and 1997:
Six Months Ended
June 30,
1998 1997
Beginning balance $48,265 $55,615
Unrealized (losses) gains on securities, net (14,609) 15,336
Ending balance $33,656 $70,951
Note 3 - INVESTMENT SECURITIES AVAILABLE FOR SALE:
The amortized cost and estimated market value of investment securities available
for sale are as follows:
June 30, 1998 December 31, 1997
Amortized Market Amortized Market
Cost Value Cost Value
Mortgage-backed securities $4,702,412 $4,758,505 $3,954,539 $4,034,900
Note 4 - INVESTMENT SECURITIES HELD TO MATURITY:
The amortized cost and estimated market value of investment securities held to
maturity are as follows:
June 30, 1998 December 31, 1997
Amortized Market Amortized Market
Cost Value Cost Value
Mortgage-backed securities 4,750,146 4,794,579 5,832,311 5,882,700
U.S. Agencies 0 0 1,001,266 1,000,300
$4,750,146 $4,794,579 $6,833,577 $6,883,000
NOTE 5 - LOANS RECEIVABLE:
Loans consist of the following:
June 30, December 31,
1998 1997
Real estate loans:
Secured by one-to-four family residences $47,111,522 $42,473,738
Secured by other properties 2,010,412 2,203,839
Construction loans 241,160 413,200
49,363,094 45,090,777
Other loans:
Automobile loans 105,553 100,607
Home improvement loans 7,330,253 7,152,228
Other 699,206 688,245
8,135,012 7,941,080
Less:
Undisbursed portion of loans (356,640) (327,480)
Net deferred loan origination costs 57,355 38,935
Allowance for loan losses (254,837) (276,300)
(554,122) (564,845)
$56,943,984 $52,467,012
NOTE 6 - ALLOWANCE FOR LOAN LOSSES:
An analysis of changes in the allowance for loan losses is as follows:
Six-months ended
June 30,
1998 1997
Balance at beginning of period $276,300 $305,900
Provision expense 22,000 17,414
Net (charge-offs) (43,463) (56,567)
Balance at end of period $254,837 $266,747
NOTE 7 - EARNINGS PER SHARE:
Earnings per share was calculated as follows:
Three-months ended
June 30, 1998
Per-Share
Income Shares Amount
Basic EPS $ 89,993 739,535 $ .12
Effect of Dilutive Securities:
Options 29,920
Diluted EPS $ 89,993 769,455 $ .12
Six-months ended
June 30, 1998
Per-Share
Income Shares Amount
Basic EPS $192,234 739,104 $ .26
Effect of Dilutive Securities:
Options 31,361
Diluted EPS $113,337 770,465 $ .25
ALBION BANC CORP.
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
JUNE 30, 1998
Financial Condition
Total assets of Albion Banc Corp. were $74.1 million as of June 30, 1998, an
increase of $2.4 million or 3.3% over total assets as of December 31, 1997.
Deposits, the Company's primary source of funds, increased $1.1 million or 1.9%
to $56.0 million at June 30, 1998. Borrowings from the Federal Home Loan Bank of
New York were $10.0 million at June 30, 1998,an increase of $1.0 million from
the $9.0 million at December 31, 1997.
Investment securities available for sale, primarily mortgage-backed securities,
increased from $4.0 million at December 31, 1997 to $4.8 million at June 30,
1998. This increase can be attributed to the purchase of $1.5 million
of mortgage-backed securities during the first quarter and the normal principal
paydowns of this type of security.
Investment securities held to maturity, primarily mortgage-backed securities and
U.S. agency securities decreased from $6.8 million at December 31, 1997 to $4.8
million at June 30, 1998. This decrease can be attributed to the normal
principal paydowns of mortgage-backed securities and the call of a $1.0 million
U.S. agency security.
Total loans receivable as of June 30, 1998 were $56.9 million, an increase of
$4.5 million over total loans at December 31, 1997. The majority of this
increase occurred in real estate loans, primarily one-to-four family properties.
Real estate loans secured by one-to-four family properties increased by $4.6
million while real estate loans secured by other properties, including
construction loans as of June 30, 1998, decreased by $.4 million during the
period.
Deposits increased $1.1 million from $54.9 million at December 31, 1997 to $56.0
million at June 30, 1998. Noninterest-bearing deposits increased .6 million or
26.5% and interest-bearing deposits increased $.5 million.
The Company's shareholders' equity increased $141,350 or 2.3%, from $6,154,832
at December 31, 1997 to $6,296,182 at June 30, 1998. This increase is due
primarily to earnings in the first two quarters and the resulting increase in
equity, offset by cash dividends on common stock of $62,563. The Company's
equity as a percentage of total assets at June 30, 1998 was 8.5% and exceeded
all regulatory requirements.
Liquidity measures the ability of the Company to meet its maturing obligations
and existing commitments, to withstand fluctuations in deposit levels, to fund
its operations and to provide for customers' credit needs. The Company's
principal sources of funds are customer deposits, advances from the Federal Home
Loan Bank of New York and principal and interest payments on loans,
mortgage-backed securities and investments. Under current federal
regulations, Albion Federal is required to maintain specified liquid assets
in an amount equal to at least 4% of its net withdrawable liabilities plus
short-term borrowings. The Company has generally maintained liquidity
levels well above those required by regulation. At June 30, 1998, the
Association's liquidity ratio was 23.8%,exceeding the minimum required.
Federal funds sold at June 30, 1998 amounted to $2,950,000. These funds are
available immediately to meet upcoming obligations. During the period, the
Company did not sell any investments prior to maturity and did not transfer
any securities between its available for sale and held to maturity categories.
Comparison of Operating Results for the Six Months Ended June 30, 1998 and 1997
Net Income. Net income of $192,234 for the six months ended June 30, 1998
represents an increase of $28,772 from the $163,462 earned in the comparable
period ended June 30, 1997.
Net Interest Income. Net interest income increased to $1,160,867 for the six
months ended June 30, 1998, up 3.4% from $1,122,344 earned during the six month
period ended June 30, 1997. This increase is due primarily to growth in the
balance sheet, primarily real estate loans. The Company's net interest margin
declined during the period, however the increase in loan volume offset the
decline. Total interest income increased 6.7% or $167,578 during the period
while total interest expense increased 9.4% or $129,055.
Provision for Loan Losses. The provision for possible loan losses, the charge
to earnings for potential credit losses associated with lending activities, was
$22,000 for the six months ended June 30, 1998, an increase of $4,586 from the
comparable period in 1997. Management charges earnings for an amount necessary
to maintain the allowance for possible loan losses at a level considered
adequate to absorb potential losses in the loan portfolio. The level of the
allowance is based on management's evaluation of individual loans, past loan
loss experience, the assessment of prevailing conditions and anticipated
economic conditions and other relevant factors. The allowance for possible loan
losses of the Association at June 30, 1997 was $254,837 or .45% of total loans,
compared to $276,300, or .52% of total loans at December 31, 1997. The level of
nonperforming assets increased from $276,267 at December 31, 1997 to 350,416 at
June 30, 1998. Also, the ratio of allowance for loan losses to nonaccrual loans
was 72.7% at June 30, 1998 as compared to 100.0% at December 31, 1997. Although
the Association believes its allowance for loan losses is at a level which it
considers to be adequate to provide for losses, there can be no assurances such
losses will not exceed the estimated amounts.
Noninterest Income. Noninterest income for the six month period ended June 30,
1998 was $194,703 compared with $197,963 during the same period in the prior
year. However, included in June 30, 1997 was $34,000 of nonrecurring loan
recovery income related to profits on the sale of real estate owned. Recurring
noninterest income increased from $163,963 at June 30, 1997 to $194,703 at June
30, 1998. This increase was attributable to increased fee income from
depository transaction accounts and fee income from New Frontier of Albion
Corp.
Noninterest Expense. Noninterest expense for the six month period ended June
30, 1998 was $1,020,586 a slight decrease from the $1,023,468 recorded for the
same period in the prior year. This decrease is a result of decreases in the
following: salaries and employee benefits expense of $6,827 or 1.4%; deposit
insurance premiums of $5,518 or 24.3%; and other operating expenses of $37,713
or 18.5%. In 1997, other operating expenses included a nonrecurring charge of
$41,642 for expenses related to the conversion to our in-house data processing
system. These decreases were partially offset by increased occupancy expenses of
$46,704 or 27.9%. This increase was primarily the result of depreciation
expenses related to computer equipment and software purchased for our in-house
data processing system.
Income Taxes. The provision for income taxes increased to $120,750 for the six
months ended June 30, 1998 from $115,963 for the six months ended June 30, 1997,
primarily as a result of increased taxable income.
Comparison of Operating Results for the Three Months Ended June 30, 1998 and
1997
Net Income. Net income of $89,993 for the three months ended June 30, 1998
represents an increase of $39,869 or 79.5% from the $50,124 earned in the
comparable period ended June 30, 1997.
Net Interest Income. Net interest income increased to $594,012 for the three
months ended June 30, 1998, up 3.9% from $571,875 earned during the three month
period ended June 30, 1997. This increase is primarily due to growth in the
balance sheet, primarily loans. The Company's net interest margin declined
during the period, however the increase in loan volume offset the decline.
Total interest income increased 5.9% or $74,924 during the period while total
interest expense increased 7.6% or $52,787.
Provision for Loan Losses. The provision for possible loan losses, the charge
to earnings for potential credit losses associated with lending activities, was
$13,000 for the three months ended June 30, 1998, an increase of $4,236 from the
comparable period in 1997.
Noninterest Income. Noninterest income for the three month period ended June
30, 1998 was $96,597 compared with $84,041 during the same period in the prior
year. This increase was attributable primarily to increased fee income from
depository transaction accounts and fee income from New Frontier of Albion Corp.
Noninterest Expense. Noninterest expense for the three month period ended June
30, 1998 was $532,966 a decrease of 1.2% from the $539,298 recorded for the same
period in the prior year. This decrease is a result of decreases in the
following: deposit insurance premiums of $2,945 or 25.4%; data processing fees
of $4,256 or 8.1% and other operating expenses of $51,803 or 41.0%. These
decreases were partially offset by increases in salaries and employee benefits
of $26,179 or 11.2% and occupancy expenses of $23,374 or 30.4%.
Income Taxes. The provision for income taxes decreased to $54,650 for the three
months ended June 30, 1998 from $57,730 for the three months ended June 30,
1997.
Impact of the Year 2000. The year 2000 problem, which is common to most
companies, concerns the inability of information systems, primarily computer
software programs, to properly recognize and process date sensitive information
as the year 2000 approaches. The Company has completed an assessment of its
systems to identify the systems that could be affected by the year 2000 issue.
All of the Company's applications used in operations are purchased from an
outside vendor. The vendor providing the software is responsible for
maintenance of the systems and modifications to enable uninterrupted usage after
December 31, 1999. The Company's plan includes obtaining certification of
compliance from third parties and testing all of the impacted applications. The
Company estimates that 60% of its plan has been completed and expects to meet
the target completion date of year-end 1998. The Company's plan also includes
reviewing any potential risks associated with the loan and investment portfolios
due to the year 2000 issue. In June 1997, the Company converted its data
processing to an in-house system, which is year 2000 compliant. At that time,
the majority of computer equipment was also upgraded to meet system
requirements. At this time, the Company does not anticipate incurring
significant costs related to the year 2000 problem and the Company does not
expect that such costs will be material to the Company's results of operations.
To the extent that costs are incurred related to the year 2000 problem, they
will be expensed.
New Accounting Pronouncement. In June 1998, the Financial Accounting Standards
Board issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities." This Statement requires that an entity recognize all derivatives
as either assets or liabilities and measure those instruments at fair value. If
certain conditions are met, a derivative may be specifically designated as a
hedge. The accounting for changes in the fair value of a derivative depends on
the intended use of the derivative and the resulting designation. SFAS No. 133
must be adopted by the Company in the first quarter of 2000, but may be adopted
in any earlier fiscal quarter and is not to be applied retroactively. When
adopted, this Statement is not expected to have a material impact on the results
of operations or financial position of the Company. Management has not yet
determined when it will adopt the provisions of this Statement.
PART II - OTHER INFORMATION
Item 1. Legal proceedings
Periodically, there have been various claims and lawsuits involving
the Company, mainly as a defendant, such as claims to enforce
liens, condemnation proceedings on properties in which the Company
holds security interests, claims involving the making and servicing
of real property loans and other issues incident to the Company's
business. The Company is not a party to any pending legal
proceedings that it believes would have a material adverse effect
on the financial condition or operation of the Company.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security-Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27 - Financial Data Schedule
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned therunto duly authorized.
Albion Banc Corp.
(Registrant)
Dated: August 10, 1998 \s\Jeffrey S. Rheinwald
Jeffrey S. Rheinwald
President and C.E.O.
Dated: August 10, 1998 \s\John S. Kettle
John S. Kettle
Senior VP and Treasurer
Dated: August 10, 1998 \s\Mark F. Reed
Mark F. Reed
Vice President and C.F.O.
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 1,327,414
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0
0
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</TABLE>
