SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 12 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
Commission file number 0-22536
-------
Monocacy Bancshares, Inc.
--------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Maryland 52-1824297
-------------------------------- -------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
222 E. Baltimore Street
Taneytown, Maryland 21787
-------------------------------- -------------------
(Address of Principal Executive (Zip Code)
Offices)
(410) 756-2655
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the classes of common
stock, as of the latest practical date.
1,798,922 shares of Common Stock, $5 par value per share, were outstanding as of
July 31, 1998.
<PAGE>
MONOCACY BANCSHARES, INC.
Index to Form 10-QSB Report
<TABLE>
<S><C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets ..........................................1
Consolidated Statements of Income and Comprehensive Income............2
Consolidated Statements of Stockholders' Equity.......................3
Consolidated Statements of Cash Flows.................................4
Notes to Consolidated Financial Statements............................5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.....................................6
PART II - OTHER INFORMATION
Item 1. Legal Proceedings...........................................................10
Item 2. Changes in Securities.......................................................10
Item 3. Defaults Upon Senior Securities.............................................10
Item 4. Submission of Matters to a Vote of Security Holders.........................10
Item 5. Other Information...........................................................10
Item 6. Exhibits and Reports on Form 8-K............................................10
Signatures...........................................................................11
</TABLE>
<PAGE>
Part I
Item 1. Financial Statements
Monocacy Bancshares, Inc. and Subsidiary
Consolidated Balance Sheets
<TABLE>
<CAPTION>
June 30, December 31,
Assets 1998 1997
------ ------------ ------------
(unaudited)
<S><C>
Cash and due from banks $ 8,710,776 $ 7,081,321
Federal funds sold 1,579,229 12,613,708
Interest-bearing deposits with other banks 325,055 1,184,481
Loans held for sale 4,079,213 4,940,424
Securities available for sale 106,489,141 95,164,265
Loans, less allowance for loan losses of
$2,610,675 and $2,538,853 159,444,391 155,715,968
Bank premises and equipment 8,095,273 8,170,589
Other real estate owned 772,052 137,296
Deferred income taxes 1,043,541 771,011
Accrued interest receivable 2,073,149 2,151,978
Other assets 1,813,477 2,309,380
------------ ------------
Total Assets $294,425,297 $290,240,421
============ ============
Liabilities and Stockholders' Equity
Liabilities:
Non-interest bearing deposits $ 33,243,587 $ 25,224,565
Interest bearing deposits 205,825,581 203,645,080
------------ ------------
239,069,168 228,869,645
Federal funds purchased - -
Other borrowings 25,811,503 35,658,153
Accrued interest and other expenses payable 1,098,491 1,270,535
Dividends payable 215,857 179,137
Other liabilities 2,966,172 94,663
------------ ------------
Total liabilities 269,161,191 266,072,133
Stockholders' Equity:
Common stock 8,994,060 8,142,610
Common stock dividend to be distributed - 4,033,720
Surplus 15,357,400 11,862,866
Retained earnings 1,130,737 66,301
Accumulated comprehensive income (218,091) 62,791
------------ ------------
Total stockholders' equity 25,264,106 24,168,288
------------ ------------
Total liabilities and stockholders' equity $294,425,297 $290,240,421
============ ============
</TABLE>
See the accompanying Notes to Consolidated Financial Statements.
1
<PAGE>
Monocacy Bancshares, Inc. and Subsidiary
Consolidated Statements of Income and Comprehensive Income
For the six and three month periods ended June 30, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30, Three Months Ended June 30,
1998 1997 1998 1997
----------- ----------- ---------- ----------
<S><C>
Interest income:
Loans, including fees 7,668,083 $ 8,000,602 $3,807,794 $3,999,634
Interest-bearing deposits with other banks 40,009 10,570 14,295 4,017
Federal funds sold 236,482 36,148 66,371 9,007
Securities available for sale 2,914,157 1,504,271 1,538,618 789,974
Investment securities - 577,754 - 289,071
----------- ----------- ---------- ----------
Total interest income $10,858,731 10,129,345 5,427,078 5,091,703
----------- ----------- ---------- ----------
Interest expense:
Deposits 4,755,226 4,704,869 2,409,315 2,374,249
Federal funds purchased 11,290 15,310 11,290 9,681
Other borrowings 1,007,897 314,489 497,396 136,290
----------- ----------- ---------- ----------
Total interest expense 5,774,413 5,034,668 2,918,001 2,520,220
----------- ----------- ---------- ----------
Net interest income 5,084,318 5,094,677 2,509,077 2,571,483
Provision for loan losses 106,400 660,000 - 480,000
----------- ----------- ---------- ----------
Net interest income after provision for loan losses 4,977,918 4,434,677 2,509,077 2,091,483
----------- ----------- ---------- ----------
Noninterest income:
Service charges on deposit accounts 339,980 264,468 173,270 158,062
Loan service charges 366,116 324,031 194,463 169,016
Trust department fees 55,942 78,651 22,633 40,276
Gains and fees on sales of loans 707,008 631,249 399,325 277,849
Gains (losses) on sales of securities 703,273 (2,550) (20,900) -
Other 106,020 153,922 58,949 27,574
----------- ----------- ---------- ----------
Total noninterest income 2,278,339 1,449,771 827,740 672,777
----------- ----------- ---------- ----------
Noninterest expense:
Salaries & employee benefits 3,111,046 2,733,615 1,554,247 1,372,960
Occupancy 364,426 368,107 190,528 167,273
Equipment 407,064 387,069 207,208 200,247
Deposit insurance 30,000 30,000 15,000 15,000
Professional fees 264,813 206,824 144,286 112,322
Other 804,896 763,893 397,143 318,935
----------- ----------- ---------- ----------
Total noninterest expense 4,982,245 4,489,508 2,508,412 2,186,737
----------- ----------- ---------- ----------
Income before income taxes 2,274,012 1,394,940 828,405 577,523
Provision for income taxes 586,638 149,276 175,249 (900)
----------- ----------- ---------- ----------
Net income 1,687,374 1,245,664 653,156 578,423
Other comprehensive income, net of tax:
Unrealized gains (losses) on securities 422,391 87,275 76,374 436,581
Reclassification of gains (losses) included in income (703,273) - 20,900 -
----------- ----------- ---------- ----------
Other comprehensive income (280,882) 87,275 97,274 436,581
----------- ----------- ---------- ----------
Comprehensive income $ 1,406,492 $ 1,332,939 $ 750,430 $1,015,004
=========== =========== ========== ==========
Net income per common share - basic $ 0.94 $ 0.70 $ 0.36 $ 0.33
=========== =========== ========== ==========
Net income per common share - diluted $ 0.91 $ 0.69 $ 0.35 $ 0.33
=========== =========== ========== ==========
</TABLE>
See the accompanying Notes to Consolidated Financial Statements.
2
<PAGE>
Monocacy Bancshares, Inc. and Subsidiary
Consolidated Statements of Stockholders' Equity
(Information for the six months ended June 30, 1998 is unaudited)
<TABLE>
<CAPTION>
Accumulated
Common Stock Other Total
Common Dividend to be Retained Comprehensive Stockholders'
Stock Distributed Surplus Earnings Income Equity
---------- -------------- ----------- ----------- ------------- -------------
<S><C>
Balance at December 31, 1995 $6,617,775 $ 2,845,643 $ 6,777,176 $ 4,908,739 $ 18,748 $21,168,081
Net income - - - 1,610,804 - 1,610,804
Issuance of shares of common stock
in connection with employee benefit
and dividend reinvestment plans 63,440 - 182,778 - - 246,218
Issuance of 10% common stock dividend 660,405 (2,845,643) 2,185,238 -
Cash dividend - - - (585,020) - (585,020)
10% stock dividend to be distributed - 3,699,159 - (3,699,159) - -
Other comprehensive income - - - - (791,698) (791,698)
---------- ----------- ----------- ----------- --------- -----------
Balance at December 31, 1996 7,341,620 3,699,159 9,145,192 2,235,364 (772,950) 21,648,385
Net income - - - 2,117,723 - 2,117,723
Issuance of shares of common stock
in connection with employee benefit
and dividend reinvestment plans 66,855 - 221,615 - - 288,470
Issuance of 10% common stock dividend 734,135 (3,699,159) 2,496,059 461,483 - (7,482)
Cash dividend - - - (714,549) - (714,549)
10% stock dividend to be distributed - 4,033,720 - (4,033,720) - -
Other comprehensive income - - - - 835,741 835,741
---------- ----------- ----------- ----------- --------- -----------
Balance at December 31, 1997 8,142,610 4,033,720 11,862,866 66,301 62,791 24,168,288
Net income for six months - - - 1,687,374 - 1,687,374
Issuance of shares of common stock
in connection with employee benefit
and dividend reinvestment plans 56,475 - 173,314 - - 229,789
Retirement of outstanding shares (19,260) - (98,265) - - (117,525)
Issuance of 10% common stock dividend 814,235 (4,033,720) 3,419,485 (200,000) - -
Cash dividend - - - (422,938) - (422,938)
Other comprehensive income - - - - (280,882) (280,882)
========== =========== =========== =========== ========= ===========
Balance at June 30, 1998 $8,994,060 $ - $15,357,400 $ 1,130,737 $(218,091) $25,264,106
========== =========== =========== =========== ========= ===========
</TABLE>
See the accompanying Notes to Consolidated Financial Statements.
3
<PAGE>
Monocacy Bancshares, Inc. and Subsidiary
Consolidated Statements of Cash Flows
For the six and three month periods ended June 30, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30, Three Months Ended June 30,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S><C>
Cash flows from operating activities:
Net income $ 1,687,374 $ 1,245,664 $ 653,156 $ 578,423
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 396,125 392,407 144,048 187,799
Provision for loan losses 106,400 660,000 - 480,000
Deferred income taxes (127,833) (318,593) (64,983) (127,513)
(Gains)losses on sales of securities available for sale (703,273) 2,550 20,900 -
Proceeds from sales of loans originated for sale 18,109,572 18,646,355 13,580,326 5,801,733
Disbursements for loans originated for sale (16,541,353) (10,793,768) (12,263,103) (5,631,673)
Gains on sale of loans (707,008) (631,249) (399,325) (281,054)
Increase(decrease) in unearned income,
net of origination costs 693,438 (89,219) 162,145 (13,712)
Writdeown of other real estate owned - 5,500 - -
Increase)decrease in accrued interest receivable 78,829 (150,623) (510,017) (227,378)
Increase(decrease) in accrued interest and other
expenses payable (289,569) 489,874 266,442 (280,746)
Other, net 696,282 187,925 66,173 253,647
Net cash provided by
------------ ------------ ------------ ------------
operating activities 3,398,984 9,646,823 1,655,762 739,526
------------ ------------ ------------ ------------
Cash flows from investing activities:
Net decrease in interest-bearing
deposits with other banks 859,426 104,578 5,203,528 406,339
Proceeds from maturities of investment securities - 8,296 - 3,992
Proceeds from sales of securities available for sale 46,037,056 1,383,549 3,021,222 -
Proceeds from maturities of securities available for sale 35,897,247 1,591,416 1,640,000 -
Purchases of securities available for sale (92,981,485) (13,851,081) (20,338,637) (9,442,167)
Sales of loan participations 2,044,000 - - -
Purchases of loan participations (2,438,975) - (958,975) -
Loan originations, net of principal repayments (2,130,043) (7,827,533) 1,612,797 (3,473,542)
Purchases of bank premises and equipment (320,809) (394,139) (231,860) (187,527)
Proceeds from real estate owned 69,851 18,885 69,851 18,885
Net cash used in
------------ ------------ ------------ ------------
investing activities (12,963,732) (18,966,029) (9,982,074) $(12,674,020)
------------ ------------ ------------ ------------
Cash flows from financing activities:
Net increase in deposits 10,199,523 2,826,291 7,058,359 2,111,266
Proceeds from issuance of other borrowings - 9,616,119 - 9,616,119
Repayments of other borrowings (9,846,650) (6,631,889) (8,087,873) -
Issuance of common stock 229,789 158,033 66,533 67,285
Dividends paid on common stock (422,938) (356,590) (197,854) (202,285)
Net cash provided by (used in)
------------ ------------ ------------ ------------
financing activities 159,724 5,611,964 (1,160,835) 11,592,385
------------ ------------ ------------ ------------
Net decrease in cash and cash equivalents (9,405,024) (3,707,242) (9,487,147) (342,109)
Cash and cash equivalents at beginning of period 19,695,029 12,373,937 19,777,152 9,008,804
============ ============ ============ ============
Cash and cash equivalents at end of period $ 10,290,005 $ 8,666,695 $ 10,290,005 $ 8,666,695
============ ============ ============ ============
Supplemental disclosures of cash flow information:
Interest paid on deposits and borrowings $ 5,145,783 $ 4,360,973 $ 2,608,573 $ 2,193,644
Income taxes paid 961,450 639,834 960,000 639,834
Transfers of loans to other real estate owned 704,607 - 704,607 -
Securitization of residential mortgage loans - - - -
Retirement of common stock 117,525 - 117,525 -
</TABLE>
See the accompanying Notes to Consolidated Financial Statements.
4
<PAGE>
MONOCACY BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Information as of and for the six months
ended June 30, 1998 is unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared
in accordance with the instructions for Form 10-QSB and, therefore, do
not include all information and notes necessary for a fair presentation
of financial condition, results of operations and cash flows in
conformity with generally accepted accounting principles. The
consolidated financial statements should be read in conjunction with
the audited financial statements included in the Monocacy Bancshares,
Inc., (the "Company") 1997 Annual Report on Form 10-KSB.
The consolidated financial statements include the accounts of the
Company's subsidiary, Taneytown Bank & Trust Company (the "Bank). All
significant intercompany balances and transactions have been
eliminated.
The consolidated financial statements as of June 30, 1998, and for the
six month periods ended June 30, 1998 and 1997 are unaudited but
include all adjustments (consisting only of normal recurring
adjustments) which the Company considers necessary for a fair
presentation of financial position and results of operations for those
periods. The Consolidated Statements of Income for the six months ended
June 30, 1998 are not necessarily indicative of the results that will
be achieved for the entire year.
NOTE 2 - EARNINGS PER COMMON SHARE
Basic earnings per common share are based upon the weighted average
number of common shares outstanding during the periods, giving
retroactive effect to stock dividends. Diluted earnings per share are
based upon the weighted average number of common shares outstanding
during the periods, adjusted by any common stock equivalents and giving
retroactive effect to stock dividends.
NOTE 3 - ALLOWANCE FOR LOAN LOSSES
The Allowance for Loan Losses is established through a provision for
loan losses charged to expenses. Loans are charged against the
allowance when management believes that the collectibility of the
principal is unlikely. The allowance is an amount that management
believes will be adequate to absorb possible losses on existing loans
that may become uncollectible, based on evaluations of the
collectibility of loans and prior loan loss experience. While
management uses available information to recognize losses on loans,
future additions to the allowance may be necessary based on changes in
economic conditions. In addition, various regulatory agencies, as an
integral part of their examination process, periodically review the
Bank's allowance for loan losses. Such agencies may require the Bank to
recognize additions to the allowance based on their judgments about
information available to them at the time of their examinations.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (dollars in thousands)
FINANCIAL CONDITION
Total assets at June 30, 1998, were $294,425, a 1.44% or $4,185 increase from
December 31, 1997. The increase in assets from December 31, 1997 occurred
primarily in the loan portfolio and securities available for sale portfolio. Net
loans at June 30, 1998 were $159,444, compared to $155,716 at December 31, 1997.
The majority of the loan increase was a result of growth in the commercial real
estate, residential construction and residential mortgage portfolios. The
securities portfolio increased to $106,489 at June 30, 1998 from $95,164 at
December 31, 1997. Deposits increased $10,199 or 4.46% from December 31, 1997,
primarily in the non-interest bearing deposit category, which increased $8,019
from December 31, 1997. The Company had $25,812 outstanding in borrowings at
June 30, 1998 compared to $35,658 at December 31, 1997.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses was $2,611 at June 30, 1998, which was 1.61% of
loans. During the first six months of 1998, Monocacy had a $106 provision for
loan losses and had net charge-offs of $34. At December 31, 1997, the allowance
for loan losses was $2,539 or 1.60% of loans.
Table 1, "Non-Performing Assets and Past Due Loans" for Monocacy shows total
non-performing assets of $1,516 at June 30, 1998, a decrease of 27.74% from the
December 31, 1997 level of $2,098. Based upon the latest quarterly analysis of
the loan portfolio, Management considers the allowance for loan losses to be
adequate to absorb any reasonable, foreseeable loan losses. The allowance for
loan losses is 350.94% of non-accrual loans and 172.23% of non-performing assets
at June 30, 1998.
Table 2, "Allowance for Loan Losses" shows the activity in the allowance for
loan losses for the six month periods ended June 30, 1998 and 1997.
LIQUIDITY
Liquidity describes the ability of the Company to meet financial obligations,
including lending commitments and contingencies, that arise during the normal
course of business. Liquidity is primarily needed to meet the borrowing and
deposit withdrawal requirements of the customers of the Company, as well as for
loan funding and to meet current and planned expenditures.
The Company's liquidity is derived primarily from its deposit base and equity
capital. Core deposits, defined as all deposits except certificates of deposit
of $100 or more, totaled $231,218 or 96.72% of total deposits at June 30, 1998.
Liquidity is also provided through the Company's portfolios of cash and interest
bearing deposits in other banks, federal funds sold (purchased), loans held for
sale and securities available for sale. Such assets totaled $121,183 or 41.16%
of total assets at June 30, 1998.
In addition, the Bank has established lines of credit totaling $45,000 with the
Federal Home Loan Bank of Atlanta (the "FHLB") as an additional source of
liquidity. At June 30, 1998, the Bank had $24,912 outstanding with the FHLB and
had sufficient collateral necessary to borrow the full amount available under
the lines of credit.
CAPITAL RESOURCES
The Federal Reserve Board has adopted risk-based capital guidelines for bank
holding companies. As of June 30, 1998, the required minimum ratio of capital to
risk-adjusted assets (including certain off-balance sheet items, such as standby
letters of credit) was 8%. At least nine months of the total capital must be
comprised of common equity, retained earnings and a limited amount of perpetual
preferred stock, after subtracting goodwill and making certain other adjustments
("Tier I capital").
The remainder may consist of perpetual debt, mandatory convertible debt
securities, a limited amount of subordinated debt, remaining preferred stock and
a limited amount of loan loss reserves ("Tier 2 capital"). The maximum amount of
supplementary capital elements that qualify as Tier 2 capital is limited to 100%
of Tier 1
6
<PAGE>
capital net of goodwill and certain other intangible assets. The Federal Reserve
Board also has adopted a minimum leverage ratio (Tier 1 capital to assets) of 3%
for bank holding companies that meet certain specified criteria, including
having the highest regulatory rating. The rule indicates that the minimum
leverage ratio should be at least 1.0% to 2.0% higher for holding companies that
do not have the highest rating or that are undertaking major expansion programs.
Failure to meet the capital guidelines could subject a banking institution to a
variety of enforcement remedies available to federal regulatory authorities.
The table below presents the Company's capital position relative to its various
minimum statutory and regulatory capital requirements at June 30, 1998.
Minimum
Monocacy Bancshares, Inc. Regulatory
June 30, 1998 Requirements
------------- ------------
Risk-based capital ratios:
Tier I capital 13.50% 4.00%
Total capital 14.75% 8.00%
Leverage capital ratio 7.31% 3.00%-5.00%
RESULTS OF OPERATIONS
Net income was $1,687 for the first six months of 1998, up from $1,246 or 35.39%
for the same period last year. Net interest income was relatively stable for the
first six months of 1998, as compared to the first six months of 1997. The
provision for loan losses was $106 for the first six months of 1998 and $660 for
the same period last year. The provision for loan losses was higher in 1997 due
to an intense credit effort in 1997 dealing with the recognition and disposition
of loan relationships that management had concluded no longer fit our long term
objectives. These relationships generally involved credit and servicing issues.
These initiatives have been concluded and, accordingly, reserves have been
decreased to a level that management believes is sufficient, taking into
consideration our improved credit culture.
Non-interest income increased by $828 or 57.10% for the first six months of 1998
with higher deposit service charges, loan servicing fees and more gains realized
on the sales of securities. Mortgage-banking activities were more profitable
during the six month period ended June 30, 1998, as evidenced by a 11.3%
increase in servicing fees and gains on sales of loans. This increase is
attributable to the improved performance of the Bank's mortgage banking
division, Classic Mortgage Company.
The Company realized net gains on sales of securities available for sale of $703
for the six months ended June 30, 1998 as compared to losses of $3 for the same
period in 1997. These security gains occurred with the sale of securities
related to the Bank's overall asset/liability management practices and were
taken to reposition the Bank's securities portfolio for funding loan growth and
interest rate considerations.
Non-interest expenses grew by $492 or 10.96% for the six month period ended June
30, 1998, with higher staff levels and related costs and the additional
investments in other resources made in late 1996 and early 1997. Professional
fees are up 28.02% primarily due to the expenses related to workouts of credits
and to the litigation noted in Note 13 to the Company's Consolidated Financial
Statements in the Company's 1997 Annual Report to Stockholders.
Income taxes were $587 in the first six months of 1998 as compared to $149 for
the first six months of 1997. The increased effective tax rate is due primarily
to the decreased investment in tax-exempt municipal securities by the Company.
7
<PAGE>
Table 1
Monocacy Bancshares, Inc.
Non-Performing Assets and Past Due Loans
(dollars in thousands)
June 30, June 30, December 31,
1998 1997 1997
-------- -------- ------------
Non-accrual loans:
Real Estate
Commercial mortgage $ 365 $ 2,961 $ 1,330
Residential mortgage 273 205 319
Commercial 84 189 289
Consumer 22 2 23
-------- ------- --------
Total non-accrual loans 744 3,357 1,961
Foreclosed properties 772 631 137
======== ======= ========
Total non-performing assets $ 1,516 $ 3,988 $ 2,098
======== ======= ========
Allowance for loan losses to:
Non-accrual loans 350.94% 79.80% 129.47%
======== ======= ========
Non-performing assets 172.23% 67.18% 121.02%
======== ======= ========
Accruing loans past due
90 days or more $ 156 $ 677 $ 760
======== ======= ========
Allowance for loan losses $ 2,611 $ 2,679 $ 2,539
======== ======= ========
8
<PAGE>
Table 2
Monocacy Bancshares, Inc.
Allowance For Loan Losses
(dollars in thousands)
<TABLE>
<CAPTION>
Six months ended June 30, Three months ended June 30,
1998 1997 1998 1997
-------- -------- -------- --------
<S><C>
Allowance for loan losses
at beginning of period $ 2,539 $ 2,100 $ 2,709 $ 2,250
Provision for loan losses 106 660 - 480
Charge-offs (150) (86) (138) (53)
Recoveries 116 5 40 2
Allowance for loan losses
======== ======== ======== ========
at end of period $ 2,611 $ 2,679 $ 2,611 $ 2,679
======== ======== ======== ========
Allowance for loan losses
as a percentage of loans
receivable, net of
unearned income 1.61% 1.61%
======== ========
</TABLE>
9
<PAGE>
PART II
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
None
Item 5. Other Information
On June 29, 1998, the Board of Directors of the Company declared a $.12
per share cash dividend to common stockholders of record on July 13,
1998, payable July 27, 1998.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No.
-----------
11.0 Information used in the computation Page 12
of earnings per share
27.0 Financial Data Schedule Page 13
(b) Reports on Form 8-K
Press release on resignation of Frank W. Neubauer.*
*Exhibit incorporated by reference
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MONOCACY BANCSHARES, INC.
Registrant
Principal Executive Officer:
By: /s/ Eric E. Glass
___________________________
Eric E. Glass, Chairman of the Board and Acting CEO
Date: August 11, 1998
Principal Financial and Accounting Officer:
By: /s/ Michael K. Walsch
____________________________
Michael K. Walsch, Executive Vice President
Date: August 11, 1998
11
MONOCACY BANCSHARES, INC. AND SUBSIDIARY EXHIBIT 11.0
Information used in the computation
of net income per common share
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
1998 1997 1998 1997
---- ---- ---- ----
<S><C>
Basic:
Net income $1,687,374 $1,245,664 $653,156 $578,423
========== ========== ======== ========
Weighted average common shares outstanding 1,797,177 1,782,458 1,799,019 1,784,310
========= ========= ========= =========
Net income per common share - basic $.94 $.70 $.36 $.33
==== ==== ==== ====
Diluted:
Net income $1,687,374 $1,245,664 $653,156 $578,423
========== ========== ======== ========
Weighted average common shares outstanding 1,797,177 1,782,458 1,799,019 1,784,310
Adjustment for common stock equivalents 50,881 29,407 50,881 29,978
---------- ---------- --------- ---------
Weighted average common shares outstanding 1,848,058 1,811,865 1,849,900 1,814,288
========= ========= ========= =========
Net income per common share - diluted $.91 $.69 $.35 $.33
==== ==== ==== ====
</TABLE>
12
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0
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