U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20459
FORM 10-Q
Quarterly Report under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Quarter Ended: Commission File No.:
March 31, 1997 0-22836
SOUTHERN FINANCIAL BANCORP, INC.
Virginia 54-1779978
___________________________________ ____________________________________
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
37 East Main Street
Warrenton, Virginia 20186
______________________________________ _______________
(address of principal executive office) Zip Code
Registrant's Telephone Number, including area code: (540) 349-3900
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
As of March 31, 1997, there were issued 1,594,122 shares and
outstanding 1,564,248 shares of the registrant's Common Stock and
issued and outstanding 15,634 shares of preferred stock.
PAGE 2
TABLE OF CONTENTS
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Financial Condition
as of March 31, 1997 (Unaudited), and
December 31, 1996 3
Consolidated Statements of Operation for the
Three Months Ended March 31, 1997 and 1996
(Unaudited) 4
Consolidated Statement of Changes in
Stockholders' Equity for the Three Months
Ended March 31, 1997 (Unaudited) 5
Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 1997 and 1996
(Unaudited) 6
Notes to Consolidated Financial Statements
(Unaudited) 7-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Exhibits and Reports on Form 8-K. 15
PART III. SIGNATURES 16
PAGE 3
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
March 31, December 31,
ASSETS 1997 1996
Cash and Due from Banks $ 4,991,087 $ 4,004,149
Overnight Earning Deposits 1,570,573 2,395,574
Investment Securities - Available-for-Sale 5,099,611 5,099,619
Investment Securities - Held-to-Maturity 70,076,922 65,217,243
Loans Held for Sale 315,400 444,500
Loans Receivable, Net 111,178,137 108,286,903
Federal Home Loan Bank Stock, at Cost 930,500 867,600
Furniture and Equipment, Net 1,611,948 1,487,446
Interest Receivable 1,414,433 1,328,551
Real Estate Owned 337,023 340,023
Other Assets 1,360,587 1,337,114
Total Assets $198,886,221 $190,808,722
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $175,861,641 $164,279,105
Advances from Federal Home Loan Bank 4,500,000 8,500,000
Advances from Borrowers for Taxes and Insurance 206,741 105,292
Other Liabilities 1,490,623 1,523,373
Total Liabilities 182,059,005 174,407,770
Preferred Stock 156 156
Common Stock 15,941 15,941
Capital in Excess of Par Value 15,276,373 15,276,373
Retained Earnings 2,060,859 1,655,575
Net Unrealized Loss on Securities
Available-for-Sale (55,026) (76,006)
Treasury Stock (471,087) (471,087)
Total Stockholders' Equity 16,827,216 16,400,952
Total Liabilities and Stockholders' Equity $198,886,221 $190,808,722
The accompanying notes are an integral part of these financial
statements.
PAGE 4
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
March 31,
1997 1996
INTEREST INCOME
Loans $2,586,038 $2,581,623
Investment Securities 1,236,544 931,074
Total Interest Income 3,822,582 3,512,697
INTEREST EXPENSE
Deposits 1,940,024 1,781,108
Borrowings 73,409 83,325
Total Interest Expense 2,013,433 1,864,433
Net Interest Income 1,809,149 1,648,264
Provision for Loan Losses 130,000 160,000
Net Interest Income after Provision
for Loan Losses 1,679,149 1,488,264
OTHER INCOME
Gain on Sale of Loans 56,180 75,081
0ther Income 346,246 179,791
Total Other Income 402,426 254,872
OPERATING EXPENSE
Employee Compensation and Benefits 616,341 491,557
Premises and Equipment 444,552 325,973
Deposit Insurance Assessments 24,907 81,330
Professional Fees 24,383 23,000
Other Expense 235,652 238,047
Total Operating Expense 1,345,835 1,159,907
Income Before Income Taxes 735,740 583,229
Provision for Income Taxes 233,200 192,500
Net Income $ 502,540 $ 390,729
Earnings per Share:
Primary Earnings per Share $ 0.31 $ 0.24
Fully Diluted Earnings per Share $ 0.31 $ 0.24
Weighted Average Number of Primary
Common Shares Outstanding 1,564,248 1,524,208
The accompanying notes are an integral part of these financial
statements.
PAGE 5
<TABLE>
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<CAPTION>
Net Unrealized
Capital in Gain (Loss) Total
Preferred Common Excess of Retained Treasury on Securities Stockholders'
Stock Stock Par Value Earnings Stock Available-for Sale Equity
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996 $156 $15,941 $15,276,373 $1,655,575 $(471,087) $(76,006) $16,400,952
Dividends on Preferred and
Common Stock - - - (97,256) - - (97,256)
Net Unrealized Gain on
Securities Available-for-Sale - - - - - 20,980 20,980
Net Income - - - 502,540 - - 502,540
Balance, March 31, 1997 $156 $15,941 $15,276,373 $2,060,859 $(471,087) $(55,026) $16,827,216
</TABLE>
The accompanying notes are an integral part of these financial statements.
PAGE 6
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended
March 31,
1997 1996
Cash Flows from Operating Activities:
Net Income $ 502,540 $ 390,729
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 146,539 120,301
Provision for Loan Losses 130,000 160,000
Provision for Deferred Income Taxes 10,333 (36,505)
Gain on Sale of Loans (56,180) (75,081)
Amortization of Deferred Loan Fees (44,521) (123,640)
Loans Originated for Sale (2,295,126) (3,424,284)
Proceeds from Sales of Loans 2,321,494 3,083,365
Increase in Interest Receivable (85,882) (26,081)
(Increase) Decrease in Other Assets (33,806) 171,280
Increase (Decrease) in Other Liabilities (32,750) 75,780
Net Cash Provided by Operating Activities 562,641 315,864
Cash Flows from Investing Activities:
Net Funding of Loans Receivable (3,048,619) (18,256)
Purchase of Investment Securities (9,058,418) (14,701,155)
Paydown of Investment Securities 4,304,006 3,102,380
Net (Increase) Decrease in Overnight Earning
Deposits 825,001 (418,055)
Net Increase in Bank Premises and Equipment (124,502) (6,732)
Paydown of Real Estate Owned 3,000 -
Increase (Decrease) in Federal Home Loan Bank Stock (62,900) 32,400
Net Cash (Used in) Investing Activities (7,162,432) (12,009,418)
Cash Flows from Financing Activities:
Net Increase in Deposits 11,582,536 9,445,546
Increase/(Decrease) in Advances from Federal
Home Loan Bank (4,000,000) 2,500,000
Increase in Advances from Borrowers for Taxes
and Insurance 101,449 120,987
Dividends on Preferred and Common Stock (97,256) (86,723)
Net Cash Provided by Financing Activities 7,586,729 11,979,810
Net Increase in Cash and Due from Banks 986,938 286,256
Cash and Due from Banks, Beginning of Period 4,004,149 3,894,884
Cash and Due from Banks, End of Period $4,991,087 $4,181,140
The accompanying notes are an integral part of these statements.
PAGE 7
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements
have been prepared in accordance with the instructions to Form 10-
Q, and, therefore, do not include all information or footnotes
necessary for a fair presentation of financial position, results of
operations, changes in stockholders' equity and cash flows in
conformity with generally accepted accounting principles.
However, all adjustments which are, in the opinion of management,
necessary for a fair presentation have been included. All
adjustments are of a normal recurring nature. The results of
operations for the three-month period ended March 31, 1997 are not
necessarily indicative of the results of the full year. These
consolidated financial statements should be read in conjunction with
the consolidated financial statements and the notes included in
Southern Financial Bancorp, Inc.'s Annual Report for the year
ended December 31, 1996.
NOTE 2 - INVESTMENT SECURITIES
The portfolio of investment securities classified as available-for-sale
consists of the following securities:
March 31, 1997 December 31, 1996
Amortized Estimated Amortized Estimated
Cost Fair Value Cost Fair Value
FHLMC Preferred Stock $4,310,235 $4,241,487 $4,310,235 $4,205,287
FNMA MBS 871,503 858,124 902,824 894,332
Total $5,181,738 $5,099,611 $5,213,059 $5,099,619
The FNMA mortgage backed securities classified as available-for-
sale have a fixed rate of interest and an original maturity of 15
years.
The portfolio of investment securities which are classified as held-to-
maturity consist of the following securities:
March 31, 1997 December 31, 1996
Amortized Estimated Amortized Estimated
Cost Fair Value Cost Fair Value
FHLB Intermediate Notes $ 3,000,000 $ 2,968,125 $ 2,000,000 $ 2,001,875
FHLMC MBS 7,042,452 7,048,338 7,300,246 7,268,332
FNMA MBS 22,432,684 22,251,492 21,981,743 21,840,553
GNMA MBS 31,692,831 31,724,563 27,387,797 27,437,141
CMO 5,908,955 5,861,983 6,547,457 6,426,176
Total $70,076,922 $69,854,501 $65,217,243 $64,974,077
The FHLB intermediate notes are due in August, 2002 and earlier
and are callable at the option of the issuer at varying times. The
remainder of the securities classified as held-to-maturity are all
mortgage backed securities. $10.3 million of the mortgage backed
securities have fixed rates of interest and original maturities of 15
years. The interest rates on $9.9 million of the mortgage backed
securities are indexed to the 11th District and national cost of funds
indices and adjust monthly. The interest rates on the balance of the
mortgage backed securities, $46.9 million, are indexed to the one
year constant maturity treasury index and adjust annually or more
frequently.
PAGE 8
NOTE 4 - LOANS RECEIVABLE
Loans receivable consist of the following:
March 31, 1997 December 31, 1996
Real estate mortgage loans:
Permanent
Residential $ 34,905,529 $ 35,032,684
Nonresidential 49,184,927 46,548,847
Construction
Residential 3,977,477 5,616,121
Nonresidential 8,346,590 7,510,374
Business 13,513,264 12,197,921
Consumer 3,344,793 3,294,171
Total loans receivable 113,272,580 110,200,118
Less:
Deferred loan fees, net (457,571) (412,274)
Allowance for loan losses (1,636,872) (1,500,941)
Loans receivable, net $111,178,137 $108,286,903
The following sets forth information regarding the allowance for
loan losses:
Three Months Year
Ended Ended
March 31, 1997 December 31, 1996
Balance, beginning of period $1,500,941 $1,190,249
Charge-offs (9,155) (389,249)
Recoveries 15,086 4,941
Provision charged to operations 130,000 695,000
Balance, end of period $1,636,872 $1,500,941
NOTE 5 - ADVANCES FROM FEDERAL HOME LOAN BANK
At March 31, 1997, advances from the Federal Home Loan Bank
("FHLB") of Atlanta totaled $4.5 million which consisted of $2.5
million of advances which reprice daily but may be prepaid at any
time without penalty and $2.0 million of fixed rate advances
maturing in January, 1998. At December 31, 1996, advances
from the FHLB of Atlanta totaled $8.5 million.
These advances are made under a credit availability agreement
with the FHLB of Atlanta totaling $25 million. The agreement
does not have a maturity date and advances are made at the FHLB
of Atlanta's discretion.
NOTE 6 - STOCKHOLDERS' EQUITY
At March 31, 1997 and December 31, 1996, the Bancorp had
15,634 shares of 6% cumulative convertible
PAGE 9
preferred stock issued and outstanding. Par value is $0.01 per
share. Five hundred thousand shares are authorized. Each share of
the Bancorp's preferred stock is convertible to 1.61 shares of
common stock. The preferred stock has an annual dividend rate of
6%. Dividends are payable quarterly and are cumulative.
At March 31, 1997 and December 31, 1996, the Bancorp had
1,594,122 shares of common stock issued and 1,564,248 shares of
common stock outstanding. The par value is $0.01 per share.
There were 5,000,000 shares authorized by the Bancorp's charter.
The Bancorp's board of directors declared a 10 percent stock
dividend in July, 1996. Prior period earnings per share amounts
have been restated to reflect the effect of this dividend.
PAGE 10
Financial Condition
The total assets of Southern Financial Bancorp, Inc. (the
"Bancorp") at March 31, 1997 were $198.9 million, an increase of
$8.1 million, or 4.2%, from total assets of $190.8 million at December
31, 1996. Total liabilities increased by $7.7 million, or 4.4%, to
$182.1 million at March 31, 1997 from $174.4 million at December
31, 1996.
The increase in total assets resulted from increases of $2.9 million
in total loans receivable and $4.9 million in investment securities (held-
to-maturity) from December 31, 1996 to March 31, 1997.
Although total loans receivable increased by $2.9 million, or
2.7%, to $111.2 million at March 31, 1997 from $108.3 million at
December 31, 1996, a shift occurred in the composition of the
categories. The principal changes were an increase in non-residential
permanent loans of $2.6 million, an increase in non-mortgage business
loans of $1.3 million and a decrease in residential construction loans of
$1.6 million, reflecting a change in emphasis on the part of the
Bancorp from residential mortgage lending to business lending.
Investment securities available-for-sale remained constant at $5.1
million at March 31, 1997, as compared to December 31, 1996. At
March 31, 1997 investment securities available-for-sale consisted
entirely of Federal Home Loan Mortgage Corporation ("FHLMC")
preferred stock and 15 year Federal National Mortgage Association
(FNMA) mortgage backed securities and were recorded at current
market value. Investment securities held-to-maturity increased by $4.9
million, or 7.5%, to $70.1 million at March 31, 1997 from $65.2
million at December 31, 1996. This increase was due to the purchase
of $1.0 million of U. S. Government agency securities and a net
increase in mortgage backed securities of $3.9 million during the three
months ended March 31, 1997.
The increase in total assets was funded by an increase in customer
deposits of $11.6 million, or 7.1%, to $175.9 million at March 31,
1997 from $164.3 million at December 31, 1996. Part of the increase
in customer deposits went to fund a decrease of $4.0 million in
advances from the Federal Home Loan Bank ("FHLB") of Atlanta
which decreased from $8.5 million at December 31, 1996 to $4.5
million at March 31, 1997. The advances from the FHLB of Atlanta at
March 31, 1997 consisted of $2.5 million of advances which mature in
one year or less and $2.0 million of advances which mature in January,
1998.
The primary sources of funds for operations of the Bancorp
include principal repayments and sales of loans and mortgage-backed
securities, new savings deposits and borrowings. The Bancorp had
outstanding commitments under existing construction loan agreements
to fund loans approximating $6.4 million at March 31, 1997. In the
opinion of management, the Bancorp's liquid assets are adequate to
meet commitments for loan fundings and other obligations and
expenditures.
Results of Operations
The Bancorp recorded net income of $502,540 for the three
months ended March 31, 1997, compared to $390,729 for the three
months ended March 31, 1996, an increase of $111,811, or 28.6%.
Primary earnings per share were $0.31 and $0.24 for the three months
ended March 31, 1997 and 1996, respectively. Weighted average
shares of common stock outstanding were 1,564,248 and 1,524,208 for
the same periods in 1997 and 1996, respectively. As explained in
footnote 6, in order to provide consistency, the weighted average
number of common shares outstanding for current and prior periods
have been adjusted to give effect to a 10% stock dividend in July,
1996.
PAGE 11
The Bancorp's principal sources of revenues are interest and fees
on loans and mortgage-backed securities, interest and dividends on
investments, and other revenue associated with fees on deposit accounts
and related services.
Net interest income before provision for loan losses for the three
months ended March 31, 1997 was $1.8 million, an increase of
$160,885, or 9.8%, from $1.6 million for the three months ended
March 31, 1996. The increase resulted primarily from a growth in
average interest-earning assets, which was partially offset by a decrease
in interest margin. Total interest-earning assets in the three months
ended March 31, 1997 averaged $187.2 million as compared to $163.8
million for the same period in 1996. For the three months ended
March 31, 1997 the interest rate spread was 3.69%, a decrease of 3
basis points from 3.72% for the three months ended March 31, 1996.
The yield on interest-earning assets decreased by 30 basis points from
8.58% for the three months ended March 31, 1996 to 8.28% for the
three months ended March 31, 1997. The cost of interest bearing
liabilities decreased by 27 basis points to 4.59% for the three months
ended March 31, 1997 from 4.86% for the three months ended March
31, 1996.
Total interest income increased by $309,885, or 8.8%, to $3.8
million for the three months ended March 31, 1997 from $3.5 million
for the three months ended March 31, 1996. This increase was
primarily due to an increase of $18.6 million in average investment
securities to $77.3 million for the three months ended March 31, 1997
from $58.8 million for the three months ended March 31, 1996, as well
as an increase in the average yield on these securities from 6.34% to
6.49% for the same periods. Average loans receivable increased by
$4.8 million from $105.1 million in the three months ended March 31,
1996 to $109.9 million in the three months ended March 31, 1997. The
yield on average loans receivable for the three months ended March 31,
1997 was 9.54% a decrease of 29 basis points from 9.83% for the three
months ended March 31, 1996.
PAGE 12
The following table presents, for periods indicated, average
monthly balances of and weighted average yields on interest-earning
assets and average balances and weighted average effective interest
paid on interest-bearing liabilities. During the period calculations
utilize month end balances.
Three Months Ended March 31,
1997 1996
Average Average
Average Yield/ Average Yield/
Balance Rate Balance Rate
(Dollars in Thousands)
Interest-Earning Assets:
Loans Receivable $109,912 9.54% $105,070 9.83%
Investment Securities 77,312 6.49 58,755 6.34
Total Interest-Earning
Assets 187,224 8.28 163,825 8.58
Interest-Bearing Liabilities:
Deposits 172,023 4.57 148,671 4.83
Borrowings 5,511 5.37 6,833 5.44
Total Interest-Bearing
Liabilities $177,534 4.59% $155,504 4.86%
Average Dollar Difference
Between Interest-Earning
Assets and Interest-Bearing
Liabilities $9,690 $8,321
Interest Rate Spread 3.69% 3.72%
Interest Margin 3.93% 3.97%
PAGE 13
The following table presents information regarding changes in
interest income and interest expense for the periods indicated. For
each category of interest-earning asset and interest-bearing liability,
information is provided on changes attributable to changes in volume
(changes in volume multiplied by old rate), changes in rates (changes in
rates multiplied by old volume), and changes in rate-volume (change in
rates multiplied by the change in volume).
For the Three Months Ended
March 31, 1997
Versus
March 31, 1996
(Dollars in Thousands)
Rate/
Volume Rate Volume Net
Interest Income:
Loans Receivable $120 ($111) ($ 5) $ 4
Investment Securities 294 9 3 306
Total Interest Income 414 (102) (2) 310
Interest Expense:
Deposits 278 (95) (15) 168
Borrowings (18) (1) 0 (19)
Total Interest Expense 260 (96) (15) 149
Net Interest Income $154 ($ 6) $13 $161
Total interest expense increased by $149,000, or 8.0%, to $2.0
million for the three months ended March 31, 1997 from $1.9 million
for the three months ended March 31, 1996. Customer deposits
averaged $172.0 million for the three months ended March 31, 1997,
up $23.3 million from $148.7 million for the three months ended
March 31, 1996; however, the average effective rate paid on deposits
decreased by 26 basis points to 4.57% in the 1997 period from 4.83%
in the 1996 period. FHLB of Atlanta advances averaged $5.5 million
for the three months ended March 31, 1997, a decrease of $1.3 million
from $6.8 million for the three months ended March 31, 1996. The
average effective rate paid on FHLB of Atlanta advances decreased to
5.37% for the three months ended March 31, 1997 from 5.44% for the
same period in 1996.
The provision for loan losses for the three months ended March
31, 1997 was $130,000, as compared to $160,000 for the three months
ended March 31, 1996. In recognition of any nonperforming loans and
the inherent risk in lending, the Bancorp has established a provision for
loan losses. The provision for loan losses is a reserve of funds
established to absorb the inherent risk in lending, after evaluating the
loan portfolio, considering current economic conditions, changes in the
nature and volume of lending and past loan loss experience. In
management's opinion the allowance for loan losses is adequate to
absorb potential losses in the current loan portfolio. The allowance for
loan losses at March 31, 1997 was $1.6 million, or 1.47% of total
loans receivable and 94.1% of nonperforming loans and real estate
owned, versus $1.5 million at December 31, 1996, which was 1.39%
of total loans receivable and 75.5% of nonperforming loans and real
estate owned.
Total other income for the three months ended March 31, 1997
was $402,426 as compared to $254,872 for the three months ended
March 31, 1996, an increase of $147,554, or 57.9%. This was
primarily due to an increase in fees on deposit accounts, resulting from
an increased retail deposit base.
PAGE 14
Total operating expense increased by $185,928, or 16.0%, to
$1.3 million for the three months ended March 31, 1997 from $1.2
million for the three months ended March 31, 1996. Employee
compensation and benefits increased by $124,784, or 25.4%, reflecting
the cost of opening one new branch in July, 1996. Premises and equipment
increased by $118,579, or 36.4% which principally reflects the cost of
opening one new branch in July, 1996.
Deposit insurance assessments decreased $56,423, or 69.4%, to
$24,907 for the three months ended March 31, 1997 from $81,330 for
the three months ended March 31, 1996, reflecting the one-time
recapitalization of the Savings Association Insurance Fund (SAIF) in
the third quarter of 1996 which had the effect of reducing the ongoing
periodic insurance payments.
Regulatory Capital Requirements
At March 31, 1997 the Bancorp exceeded all regulatory capital
standards, which were as follows:
Actual Capital Required Capital Excess Capital
(Amounts in thousands)
Amount Ratio Amount Ratio Amount Ratio
Leverage
Capital $16,783 8.51% $7,892 4.00% $8,891 4.51%
Tier I
Capital $16,783 14.90% $4,505 4.00% $12,278 10.90%
Tier I and II
Capital $18,194 16.15% $9,011 8.00% $9,183 8.15%
Impact of Inflation and Changing Prices
The consolidated financial statements and accompanying notes
presented herein have been prepared in accordance with generally
accepted accounting principles which require the measurement of
financial position and operating results in terms of historical dollars
without considering changes in the relative purchasing power of money
over time due to inflation.
Unlike many industrial companies, substantially all of the assets
and virtually all of the liabilities of the Bancorp are monetary in nature.
As a result, interest rates have a more significant impact on the
Bancorp's performance than the effects of general levels of inflation.
Interest rates may not necessarily move in the same direction or in the
same magnitude as the prices of goods and services. However, other
expenses do reflect general levels of inflation.
PAGE 15
Part II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Not applicable
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
The Annual Meeting of Shareholders was held on April 24,
1997 at 3:00 p.m. at the Fauquier Springs Country Club,
Springs Road, Warrenton, Virginia. The following is a
summary of items voted upon at the meeting:
1. The following Directors were elected to serve three
year terms expiring in the year 2000:
Neil J. Call
David de Give
R. Roderick Porter
2. The appointment of Arthur Andersen, LLP as
independent auditors for the year ending December
31, 1997 was approved by the following vote: For
1,326,724; Against 1909; Abstain 4175.
3. The amendment to the Bancorp's 1993 Stock Option
and Incentive Plan increasing the shares authorized
under the plan from 161,000 to 261,000 was
approved by the following vote: For 741,281;
Against 224,293; Abstain 13,270.
Item 5. OTHER INFORMATION
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibits Required
None.
Reports on Form 8-K
No reports on Form 8-K were filed during the three months
ended March 31, 1997.
PAGE 16
Part III. 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.
SOUTHERN FINANCIAL BANCORP, INC.
(Registrant)
Date 5/14/97 By: /s/Georgia S. Derrico
Georgia S. Derrico
Chairman and
Chief Executive Officer
(Duly Authorized Representative)
Date 5/14/97 By: /s/William H. Lagos
William H. Lagos
Senior Vice President and Controller
Principal Accounting Officer
(Duly Authorized Representative)
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