U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______________ TO
_________________
COMMISSION FILE NUMBER 000-22449
PTC Bancorp
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
Indiana 35-1606016
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
Reservoir Hill Road
9014 State Road 101
P.O. Box 7
Brookville, Indiana 47012
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
765-647-3591
(ISSUER'S TELEPHONE NUMBER)
NA
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST REPORT)
Check whether the issuer (1) 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 X No
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.
Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. 1,026,401 shares
of common stock outstanding on October 30, 1997
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT
(Check one):
Yes No X
--- ---
<PAGE>
TABLE OF CONTENTS
Part I
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Income . . . . . . . . . . . . . . 4
Consolidated Statements of Changes in Shareholders' Equity . 5
Consolidated Statements of Cash Flows . . . . . . . . . . . . 6
Notes to Consolidated Financial Statements . . . . . . . . . 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operation . . . . . . . . . . . . . . . . . 8
Part II
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . 14
Item 2. Change in Securities . . . . . . . . . . . . . . . . . . . . 14
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . 14
Item 4. Submission of Matters to a Vote of Security Holders . . . . . 14
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . 14
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 14
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2
<PAGE>
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
PTC BANCORP
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands)
<TABLE>
<CAPTION>
____________________________________________________________________________________
September 30, December 31,
1997 1996
---- ----
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 18,281 $ 26,185
Interest-bearing balances with financial institutions 1,398 1,897
Available-for-sale securities 28,132 38,376
Held-to-maturity securities 25,761 25,218
Total loans 220,653 196,963
Less: Allowances for loan losses (1,969) (2,000)
------------ ------------
Net loans 218,684 194,963
Premises and equipment, net 3,939 3,512
Accrued interest receivable and other assets 6,539 6,425
------------ ------------
$ 302,734 $ 296,576
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits $ 275,679 $ 271,127
Notes payable 250 500
Accrued interest payable and other liabilities 3,065 3,296
------------ ------------
Total liabilities 278,994 274,923
Shareholders' equity
Common stock 1,026 1,024
Additional paid-in capital 10,439 10,413
Retained earnings 12,109 10,018
Net unrealized gain or loss on
available-for-sale securities 166 198
------------ ------------
Total shareholders' equity 23,740 21,653
------------ ------------
$ 302,734 $ 296,576
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
PTC BANCORP
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in Thousands Except Per Share Data)
<TABLE>
<CAPTION>
_______________________________________________________________________________________________________________________
Three Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 5,017 $ 4,312 $ 14,316 $ 12,648
Interest on securities 836 946 2,639 2,696
Other interest 62 135 279 460
-------------- -------------- --------------- ---------------
Total interest income 5,915 5,393 17,234 15,804
Interest expense
Interest on deposits 2,976 2,752 8,653 8,074
Interest on notes payable 9 13 26 47
-------------- -------------- --------------- ---------------
Total interest expense 2,985 2,765 8,679 8,121
============== ============== =============== ===============
Net interest income 2,930 2,628 8,555 7,683
Provision for loan losses (210) (227) (610) (616)
Net interest income after
provision for loan losses 2,720 2,401 7,945 7,067
Non-interest income
Service charges and fees
on deposit accounts 331 299 944 887
Mortgage banking income 360 257 766 577
Gain/(loss) on securities 8 4 8 103
Other income 48 49 142 195
-------------- -------------- --------------- ---------------
Total non-interest income 747 609 1,860 1,762
Non-interest expense
Salaries and benefits 1,156 1,045 3,346 3,117
Occupancy and equipment,
net 306 230 895 682
FDIC insurance 7 1 22 2
Data processing expense 98 88 289 266
Other operating expenses 509 437 1,366 1,205
-------------- -------------- --------------- ---------------
Total non-interest
expense 2,076 1,801 5,918 5,272
-------------- -------------- --------------- ---------------
Income before income taxes 1,391 1,209 3,887 3,557
Less: income taxes (429) (363) (1,185) (1,166)
-------------- -------------- --------------- ---------------
Net income $ 962 $ 846 $ 2,702 $ 2,391
============== ============== =============== ===============
Earnings per share $ .94 $ .82 $ 2.64 $ 2.31
Average shares outstanding 1,025,102 1,032,129 1,024,629 1,034,244
Dividends per share $ .205 $ .165 $ .595 $ .475
___________________________________________________________________________________________
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
PTC BANCORP
CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY (UNAUDITED)
(Dollars in Thousands Except Per Share Data)
<TABLE>
<CAPTION>
________________________________________________________________________________________________
Nine Months Nine Months
Ended Ended
September 30, September 30,
1997 1996
---- ----
<S> <C> <C>
BALANCE JANUARY 1 $ 21,653 $ 19,218
Net income 2,702 2,391
Issuance of stock 28 485
Redemption of stock - (620)
Cash dividends paid (610) (490)
Change in net unrealized gain or loss
on available-for-sale securities (33) (231)
-------- --------
Balance September 30 $ 23,740 $ 20,753
======== ========
________________________________________________________________________________________________
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
PTC BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in Thousands)
<TABLE>
<CAPTION>
______________________________________________________________________________________________________________
Nine Months Nine Months
Ended Ended
September 30, September 30,
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,702 $ 2,391
Adjustments to reconcile net income to net cash
from operating activities
Depreciation 367 274
Provision for loan losses 610 616
(Gain)/loss on sale of securities (8) (103)
Amortization of intangible assets 173 164
Other adjustments (342) (787)
-------------- --------------
Net cash from operating activities 3,502 2,555
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from paydowns and maturities of
held-to-maturity securities 2,873 5,470
Proceeds from sales of available-for-sale securities 4,506 3,381
Proceeds from paydowns and maturities of
available-for-sale securities 7,728 12,874
Purchases of held-to-maturity securities (3,416) (11,774)
Purchases of available-for-sale securities (1,982) (17,116)
Net change in loans (24,300) (16,207)
Net change in deposits with other financial institutions 499 294
Property and equipment expenditures (794) (616)
-------------- --------------
Net cash from investing activities (14,886) (23,694)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits (2,236) 6,907
Deposits assumed in branch acquisition, net of premium paid 6,548 -
Dividends paid (610) (490)
Payments on note payable (250) (392)
Proceeds from issuance of stock 28 485
Redemption of stock - (620)
-------------- --------------
Net cash from financing activities 3,480 5,890
-------------- --------------
Net change in cash and cash equivalents (7,904) (15,249)
Cash and cash equivalents at beginning of period 26,185 (24,474)
-------------- --------------
Cash and cash equivalents at end of period $ 18,281 $ 9,225
============== ==============
______________________________________________________________________________________________________________
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
PTC BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The consolidated financial statements include the accounts of PTC Bancorp
(the "Company") and its wholly owned subsidiary, Peoples Trust Company (the
"Bank"). All significant intercompany accounts and transactions have been
eliminated.
These financial statements were prepared in accordance with the instructions
for Form 10-QSB and, therefore, do not include all of the disclosures
necessary for a complete presentation of financial position, results of
operations and cash flows in conformity with generally accepted accounting
principles. These financial statements have been prepared on a basis
consistent with the annual financial statements and include, in the opinion
of management, all adjustments, consisting of only normal recurring
adjustments, necessary for a fair presentation of the results of operations
and financial position at the end of and for the periods presented.
NOTE 2 - PENDING ACCOUNTING CHANGES
The Company does not expect the anticipated adoption of any newly issued
accounting standards to have a material impact on future operations or
financial position.
NOTE 3 - EARNINGS PER SHARE
Earnings per share have been computed based upon the weighted average number
of shares outstanding during the periods presented, adjusted for any stock
dividends. Common stock equivalents are not materially dilutive.
NOTE 4 - PENDING BUSINESS COMBINATION
On October 8, 1997, the Company agreed to merge with Indiana United Bancorp
("IUB"). IUB is a bank and thrift holding company located in Greensburg,
Indiana. Under terms of the agreement, each outstanding common share of PTC
Bancorp, including shares outstanding under option plans, will be converted
into 1.075 common shares of IUB. The proposed transaction requires approval
by regulatory authorities and shareholders of both companies. The proposed
transaction is expected to be consummated during the first quarter of 1998.
It is expected to be accounted for as a pooling-of-interests.
7
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
FORWARD-LOOKING STATEMENTS.
Except for historical information contained herein, the discussion in this
Form 10-Q quarterly report includes certain forward-looking statements based
upon management expectations. Factors which could cause future results to
differ from these expectations include the following: general economic
conditions; legislative and regulatory initiatives; monetary and fiscal
policies of the federal government; deposit flows; the costs of funds;
general market rates of interest; interest rates on competing investments;
demand for loan products; demand for financial services; changes in
accounting policies or guidelines; and changes in the quality or composition
of the Company's loan and investment portfolios.
The Company does not undertake and specifically disclaims any obligation to
update any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the date of such
statements.
RECENT DEVELOPMENTS.
IUB Merger
On October 8, 1997, the Company signed a definitive agreement to merge with
Indiana United Bancorp (IUB), Greensburg, Indiana in a proposed transaction
viewed as a merger of equals, with the combined entity retaining the name of
Indiana United Bancorp. The definitive agreement provides that PTC
shareholders (including option holders) will receive 1.075 shares of IUB
common stock in exchange for each share owned or option held of PTC common
stock.
The consolidated company will hold assets totaling almost $650 million and
will have market capitalization of more than $100 million based upon current
market values. Upon completion of the merger, Indiana United Bancorp will
operate 29 offices in 12 counties throughout the eastern and southern
regions of Indiana.
The proposed transaction is subject to various regulatory approvals and the
approval of the shareholders of both organizations. It is expected that the
transaction will be accounted for as a "pooling of interests." Although the
Company anticipates that the merger will be consummated during the first
quarter of 1998, there can be no assurance that the transaction will be
completed.
FACILITIES AND TECHNOLOGY.
In an effort to make its service more accessible and convenient, the Company
is considering renovating its main banking facility in Rushville. This
renovation will enhance customer accessibility to the bank's various
products and services as well as enhance drive-through banking, ATM
accessibility and customer parking.
During 1997, the Company initiated many technological improvements. Certain
of these improvements represent capital investments, which allows the
Company to continue to
8
<PAGE>
efficiently compete within the financial services industry which is becoming
increasingly dependent upon technology. Investments are being made in
additional ATM's, cash dispensers, Automated Voice Response System, Debit
Cards, and additional state of the art PC's which will allow for improved
efficiencies in customer service.
EARNINGS.
Net income for the nine months ended September 30, 1997 was $2,702 compared
to $2,391 for the same period in 1996, which represented a $311 or 13.0%
increase. Earnings per share also increased from $2.31 per share to $2.64
per share for the same period. Higher net interest income, which was
partially offset by higher non-interest expense, accounted for most of the
increase in net income. Net income and earnings per share for the third
quarter of 1997 versus the third quarter of 1996 were also higher. Again,
higher net interest income, offset by higher non-interest expenses, were the
main contributors.
For the nine month period ended September 30, 1997 as compared to the same
period in 1996, net interest income increased by $872 or 11.3%. A similar
proportional increase also occurred during the third quarter of 1997 versus
the third quarter of 1996. Higher volumes (average balances) of financial
assets and liabilities, rather than changes in underlying interest rates,
were the main reason for increased interest income and interest expense.
Average loans were $209.0 million for the nine months ended September 30,
1997, compared to $181.3 million the same period in 1996, or about $27.7
million higher. Average deposits were $266.9 million for the nine month
period ended September 30, 1997 versus $243.9 million for 1996, or about
$23.0 million higher. Net interest margin (net interest income on a tax
equivalent basis divided by average total earnings assets) was 4.46% for the
nine month period ended September 30, 1997 and 4.38% for the same period in
1996.
Non-interest income was relatively stable for the nine month period ended
September 30, 1997 versus 1996; however, certain components of non-interest
income did change significantly. Mortgage banking income, which consists of
gains (losses) on loan sales and service fee income, was $103 higher for the
third quarter of 1997 versus 1996, and $189 higher for the nine month period
ended September 30, 1997 versus 1996. During the second and third quarters,
the long-term interest rates charged on mortgages eased and the Company saw
an increase in refinancing and new originations take place. Gains on
securities included a sale of common stock in 1996, but was a one-time gain
and therefore not reported in 1997.
Non-interest expense increased from $5,272 for the nine months ended
September 30, 1996 to $5,918 for the same period in 1997, or a $646
increase. Most of this increase was related to higher salaries and benefits
and higher occupancy and equipment expense. Higher salary and benefit costs
were directly attributed to a revised management structure which was
implemented January 1, 1997; and called for the hiring of several new
commercial lenders, a financial controller, an executive vice president, and
several regional sales managers so the Company could be better positioned
for additional growth and loan production activity.
9
<PAGE>
Higher occupancy and equipment expenses were directly attributed to the
Company's expansion of its current ATM program which included the
refurbishing of four existing ATM's, the addition of four new ATM's and the
addition of one cash dispenser at a an Indiana convenience store. The
Company also converted to a new network and service provider in order to
attain long term cost reductions in driving the ATM network. In addition,
the Company expanded its branch network by acquiring a full service branch
in March 1997 in Hanover, Indiana, and establishing a de novo branch in
Madison, Indiana in September 1997.
FINANCIAL CONDITION.
Total assets increased slightly, $6,158 or 2.1% from December 31, 1996 to
September 30, 1997. Gross loans increased by $23,690 or 12.0% during the
same period. A decline in cash equivalents of $7,904 was used to fund the
increase in loans, along with sales and maturities of available-for-sale
securities. Loan demand continued to be strong in 1997. The Company
believes it has positioned itself to grow its loan portfolio by adding
employees to increase originations. As of September 30, 1997, the Company
had obtained a 80.0% loan to deposit ratio. A detailed presentation of
loans by category follows:
<TABLE>
<CAPTION>
September 30, December 31, $ %
1997 1996 Change Change
---- ---- ------ ------
<S> <C> <C> <C> <C>
Construction loans $ 13,462 $ 13,650 $ (188) (1.4)%
Real estate farmland 11,948 8,302 3,646 43.9
Real estate 1-4 family
residential 88,473 79,808 8,665 10.8
Real estate non-farm,
non-residential 48,917 35,068 13,849 39.5
Commercial and industrial 17,932 22,986 (5,054) (22.0)
Consumer loans 22,277 24,543 (2,266) (9.2)
Tax-exempt loans 11,347 8,390 2,957 35.2
Other loans 6,297 4,216 2,081 49.3
------------ ------------ ----------- -----
Total loans $ 220,653 $ 196,963 $ 23,690 12.0%
============ ============ =========== =====
</TABLE>
ASSET QUALITY.
Provision for loan losses was relatively stable for 1997 versus 1996. An
analysis of activity in the allowance for loan losses follows:
Nine months Nine months
ended ended
September 30, 1997 September 30, 1996
------------------ ------------------
Balance at January 1 $ 2,000 $ 1,722
Provision for loan losses 610 616
Losses charged to allowance (750) (327)
Recoveries credited to allowance 109 144
----------- -----------
Balance at June 30 $ 1,969 $ 2,155
=========== ===========
The Company maintains a watch list and performs an ongoing loan review
function. On a quarterly basis the allowance for loan loss calculation is
completed. While management
10
<PAGE>
believes that the allowance is adequate as of September 30, 1997, it intends
to significantly fund the provision during the fourth quarter because the
Company's overall loan growth exceeded 13.5% in 1996 and will exceed 14%
growth again in 1997. A comparative review of the Company's allowance for
loan loss to its peer group, which consists of financial institutions
between $150 and $300 million in assets, was completed. Through this
analysis, it was determined that the Company's allowance to total loans
percentage relationship was significantly less than peer. Management will
fund the reserve during the fourth quarter of 1997 to bring the Company
closer to its peer group and to recognize the tremendous growth experienced
during the past two years.
A summary of non-performing loans follows:
September 30, December 31,
1997 1996
---- ----
Non-accrual loans $ 2,349 $ 1,794
Restructured loans - -
Accruing loans 90 days or more past due 56 34
------- -------
Total non-performing loans $ 2,405 $ 1,828
======= =======
Allowance for loan losses $ 1,969 $ 2,000
Allowance/total loans 0.89% 1.02%
Allowance/non-performing loans 81.9% 109.4%
Non-performing loans/total loans 1.09% 0.93%
Charge offs were $750 for 1997, of which $550 was related to one loan
relationship. As of September 30, 1997, the carrying value of loans to
Bennett Funding was $750, which is included in non-accrual loans. An agreed
settlement has been approved through the bankruptcy courts and payment is
expected before year end. No additional loss is expected.
CAPITAL.
Shareholders' equity increased from $21,653 at December 31, 1996 to $23,740
at September 30, 1997. The increase of $2,087 was almost solely due to
retained earnings - net income less cash dividends.
The Company and Bank are subject to regulatory capital requirements
administered by the federal banking agencies. "Consolidated" actual and
minimum required capital ratios for capital adequacy and prompt corrective
action purposes are presented below. ("Bank only" ratios are substantially
the same as "consolidated"). The Company and Bank are both considered "well
capitalized" for prompt corrective action purposes.
<TABLE>
<CAPTION>
Minimum Required
Minimum Required To Be "Well
For Capital Capitalized" Under
Adequacy Prompt Corrective
Actual Purposes Action Regulations
------ ---------------- ------------------
<S> <C> <C> <C>
As of September 30, 1997
------------------------
Tier 1 Capital to Average Assets 7.26% 4.0% 5.0%
Tier 1 Capital to Risk Based Assets 10.73% 4.0% 6.0%
Total Capital to Risk Based Assets 11.70% 8.0% 10.0%
11
<PAGE>
As of December 31, 1996
-----------------------
Tier 1 Capital to Average Assets 6.73% 4.0% 5.0%
Tier 1 Capital to Risk Based Assets 10.54% 4.0% 6.0%
Total Capital to Risk Based Assets 11.60% 8.0% 10.0%
</TABLE>
LIQUIDITY.
Liquidity management involves maintaining sufficient cash levels to fund
operations and to meet the requirements of borrowers, depositors and
creditors. High levels of liquidity bear higher corresponding costs,
measured in terms of lower yields on short-term investments, more liquid
earnings assets, and higher interest expense involved in extending liability
maturities. Liquid assets include cash and cash equivalents, loans and
securities maturing within one year, and money market instruments. In
addition, the Company holds $20,972 of AFS securities maturing after one
year which can be sold to meet liquidity needs.
Liquidity is supported by maintaining a relatively stable funding base,
which is achieved by diversifying funding sources, extending the contractual
maturity of liabilities, and limiting reliance on volatile short-term
purchased funds. Short-term funding needs may arise from declines in
deposits or other funding sources, draw downs of loan commitments and
requests for new loans. The Company's strategy is to fund assets to the
maximum extent possible with core deposits, which provide a sizable source
of relatively stable and low-cost funds. Average core deposits funded
approximately 87% of total earning assets at September 30, 1997.
Management believes the Company has sufficient liquidity to meet all
reasonable borrower, depositor, and creditor needs in the present economic
environment. The Company has not received any recommendations from
regulatory authorities, which would materially affect liquidity, capital
resources or operations.
INTEREST RATE RISK.
At September 30, 1997, the Company held approximately $178,606 in assets
comprised of securities, loans, short-term investments, and federal funds
sold, which were interest sensitive in one year or less time horizons. The
Company's interest rate sensitivity analysis at September 30, 1997 appears
below. Core deposits are distributed or spread among the various repricing
categories based upon historical patterns of repricing which are reviewed
periodically by management. The assumptions regarding these repricing
characteristics greatly influence conclusions regarding interest
sensitivity. Management believes its assumptions regarding these
liabilities are reasonable.
Effective asset/liability management requires the maintenance of a proper
ratio between maturing or repriceable interest-earning assets and
interest-bearing liabilities. It is the policy of the Company that
rate-sensitive assets less rate-sensitive liabilities to total assets are
kept within a range of 85% to 115% for all time periods one year and longer.
<TABLE>
<CAPTION>
Maturing or Repricing
(dollars in thousands)
3 Months One Year 5 Years 5 Years +
-------- -------- ------- ---------
<S> <C> <C> <C> <C>
Rate-sensitive assets $63,131 $115,475 $ 85,065 $ 25,335
Rate-sensitive liabilities 88,169 111,064 47,496 29,396
12
<PAGE>
Rate-sensitive GAP
(assets less liabilities) (25,038) 4,411 37,569 (4,061)
Rate-sensitive GAP (cumulative) $(25,038) $(20,627) $ 16,942 $ 12,881
Percent of total assets (cumulative) (8.3)% (6.8)% 5.6% 4.3%
Rate-sensitive assets/liabilities
(cumulative) 71.6% 89.6% 106.9% 104.7%
</TABLE>
EFFECTS OF CHANGING PRICES.
The Company's asset and liability structure is substantially different from
that of an industrial company in that most of its assets and liabilities are
monetary in nature. Management believes the impact of inflation on financial
results depends upon the Company's ability to react to changes in interest
rates and, by such reaction, reduce the inflationary impact on performance.
Interest rates do not necessarily move in the same direction at the same
time, or at the same magnitude, as the prices of other goods and services.
As discussed previously, management relies on its ability to manage the
relationship between interest- sensitive asset and liabilities to protect
against wide interest rate fluctuations, including those resulting from
inflation.
13
<PAGE>
Part II -- Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
In September, 1997, two directors exercised an outstanding option
for 1,949 shares of Common Stock at $13.24 per share. The shares
were issued in reliance upon Section 4(2) of the Securities Act of
1933, as amended.
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
(a) Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
None
14
<PAGE>
Signatures
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PTC BANCORP
Date: November 13, 1997 /s/ JAMES L. SANER
----------------------------
James L. Saner, Sr.
President
15
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 10631
<INT-BEARING-DEPOSITS> 1398
<FED-FUNDS-SOLD> 7650
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 28132
<INVESTMENTS-CARRYING> 25761
<INVESTMENTS-MARKET> 26119
<LOANS> 220653
<ALLOWANCE> 1969
<TOTAL-ASSETS> 302734
<DEPOSITS> 275679
<SHORT-TERM> 250
<LIABILITIES-OTHER> 3065
<LONG-TERM> 0
0
0
<COMMON> 1026
<OTHER-SE> 22714
<TOTAL-LIABILITIES-AND-EQUITY> 302734
<INTEREST-LOAN> 14316
<INTEREST-INVEST> 2639
<INTEREST-OTHER> 279
<INTEREST-TOTAL> 17234
<INTEREST-DEPOSIT> 8653
<INTEREST-EXPENSE> 8679
<INTEREST-INCOME-NET> 8555
<LOAN-LOSSES> 610
<SECURITIES-GAINS> 8
<EXPENSE-OTHER> 5918
<INCOME-PRETAX> 3887
<INCOME-PRE-EXTRAORDINARY> 3887
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2702
<EPS-PRIMARY> 2.64
<EPS-DILUTED> 2.64
<YIELD-ACTUAL> 4.46
<LOANS-NON> 2349
<LOANS-PAST> 56
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2000
<CHARGE-OFFS> 750
<RECOVERIES> 109
<ALLOWANCE-CLOSE> 1969
<ALLOWANCE-DOMESTIC> 810
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1159
</TABLE>
