<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 0-25160
ALABAMA NATIONAL BANCORPORATION
-------------------------------
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 63-1114426
-------- ----------
(State of Incorporation) (I.R.S. Employer Identification No.)
1927 FIRST AVENUE NORTH, BIRMINGHAM, ALABAMA 35203-4009
-------------------------------------------------------
(Address of principal executive office)
Registrant's telephone number, including area code: (205) 583-3654
--------------
----------------------------------------------------
(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 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 registrant's
classes of common stock, as of the latest practicable date.
Class Outstanding at November 11, 1997
----- --------------------------------
Common Stock, $1.00 Par Value 6,574,942
<PAGE> 2
INDEX
ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
PART 1. FINANCIAL INFORMATION PAGE
----
<S> <C>
Item 1. Financial Statements (Unaudited)
Consolidated statements of condition
September 30, 1997 and December 31, 1996 .............................. 3
Consolidated statements of income
Three month periods ended September 30, 1997 and 1996;
Nine month periods ended September 30, 1997 and 1996 .................. 4
Consolidated statements of cash flows
Nine month periods ended September 30, 1997 and 1996 .................. 8
Notes to the unaudited consolidated financial statements
September 30, 1997 .................................................... 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ............................................. 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K ....................................... 22
SIGNATURES ..................................................................... 23
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED)
ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)
<TABLE>
<CAPTION>
September 30, 1997 December 31, 1996
------------------ -----------------
(In thousands)
<S> <C> <C>
ASSETS
Cash and due from banks .................................................... $ 35,437 $ 36,730
Interest-bearing deposits in other banks ................................... 2,069 200
Investment securities (estimated market values of $61,900 and $74,772) ..... 61,455 74,745
Securities available for sale .............................................. 115,963 76,080
Trading securities ......................................................... 2,590 1,936
Federal funds sold and securities purchased under resell agreements ........ 44,838 46,249
Loans ...................................................................... 631,134 612,897
Unearned income ............................................................ (995) (1,456)
--------- ---------
Loans, net of unearned income .............................................. 630,139 611,441
Allowance for loan losses .................................................. (9,699) (9,322)
--------- ---------
Net loans .................................................................. 620,440 602,119
Property, equipment, and leasehold improvements, net ....................... 22,747 20,891
Intangible assets .......................................................... 7,060 7,308
Other assets ............................................................... 26,193 21,454
--------- ---------
Totals ..................................................................... $ 938,792 $ 887,712
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest bearing ..................................................... $ 114,993 $ 110,962
Interest bearing ........................................................ 596,412 563,719
--------- ---------
Total deposits ............................................................. 711,405 674,681
Federal funds purchased and securities sold under repurchase agreements .... 102,861 91,871
Treasury, tax and loan account ............................................. 4,523 2,968
Short-term borrowings ...................................................... 18,250 41,000
Accrued expenses and other liabilities ..................................... 15,088 10,771
Long-term debt ............................................................. 14,480 300
--------- ---------
Total liabilities .......................................................... 866,607 821,591
Common stock, $1 par, authorized 10,000,000 shares;
issued 6,573,503 and 6,515,418 shares at September 30, 1997
and December 31, 1996, respectively ..................................... 6,574 6,515
Additional paid-in capital ................................................. 48,286 48,782
Retained earnings .......................................................... 17,054 11,093
Unearned restricted stock .................................................. (115) (185)
Unrealized gain (loss) on securities available for sale, net of tax ........ 386 (84)
--------- ---------
Total stockholders' equity ................................................. 72,185 66,121
--------- ---------
Totals ..................................................................... $ 938,792 $ 887,712
========= =========
</TABLE>
See accompanying notes to unaudited consolidated financial statements
3
<PAGE> 4
ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the three months
ended September 30,
-------------------
1997 1996
---- ----
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans ................................. $14,321 $13,456
Interest on securities ..................................... 2,760 2,430
Interest on deposits in other banks ........................ 3 15
Interest on trading securities ............................. 42 30
Interest on Federal funds sold and securities purchased
under resell agreements ................................. 592 215
------- -------
Total interest income ......................................... 17,718 16,146
INTEREST EXPENSE
Interest on deposits ....................................... 6,897 6,034
Interest on Federal funds purchased and securities sold
under repurchase agreements ............................. 1,062 711
Interest on long and short-term borrowings ................. 634 605
------- -------
Total interest expense ........................................ 8,593 7,350
------- -------
Net interest income ........................................... 9,125 8,796
Provision for loan losses ..................................... 40 --
------- -------
Net interest income after provision for loan losses ........... 9,085 8,796
NONINTEREST INCOME:
Securities gains ........................................... 3 7
Service charges on deposit accounts ........................ 961 935
Investment services ........................................ 2,170 1,801
Trust department income .................................... 500 395
Other ...................................................... 592 725
------- -------
Total noninterest income ...................................... 4,226 3,863
</TABLE>
4
<PAGE> 5
ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the three months
ended September 30,
-------------------
1997 1996
---- ----
<S> <C> <C>
NONINTEREST EXPENSE:
Salaries and employee benefits ................................... 5,732 4,819
Occupancy and equipment expenses ................................. 1,146 1,156
Other ............................................................ 2,243 3,202
------ ------
Total noninterest expense ........................................... 9,121 9,177
------ ------
Income before provision for income taxes ............................ 4,190 3,482
Provision for income taxes .......................................... 1,346 897
------ ------
Net income .......................................................... $2,844 $2,585
====== ======
Net income per common share ......................................... $ .42 $ .39
====== ======
Weighted average common and common equivalent shares outstanding .... 6,774 6,679
====== ======
</TABLE>
See accompanying notes to unaudited consolidated financial statements
5
<PAGE> 6
ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the nine months
ended September 30,
-------------------
1997 1996
---- ----
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans ................................. $42,181 $39,487
Interest on securities ..................................... 7,859 7,355
Interest on deposits in other banks ........................ 7 203
Interest on trading securities ............................. 111 154
Interest on Federal funds sold and securities purchased
under resell agreements ................................. 1,757 1,274
------- -------
Total interest income ......................................... 51,915 48,473
INTEREST EXPENSE
Interest on deposits ....................................... 20,463 18,534
Interest on Federal funds purchased and securities sold
under repurchase agreements ............................. 2,964 2,530
Interest on long and short-term borrowings ................. 1,662 1,620
------- -------
Total interest expense ........................................ 25,089 22,684
------- -------
Net interest income ........................................... 26,826 25,789
Provision for loan losses ..................................... 107 209
------- -------
Net interest income after provision for loan losses ........... 26,719 25,580
NONINTEREST INCOME:
Securities gains ........................................... 7 41
Service charges on deposit accounts ........................ 2,803 2,780
Investment services ........................................ 5,833 5,942
Trust department income .................................... 1,324 1,105
Other ...................................................... 2,022 2,114
------- -------
Total noninterest income ...................................... 11,989 11,982
</TABLE>
6
<PAGE> 7
ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the nine months
ended September 30,
-------------------
1997 1996
---- ----
<S> <C> <C>
NONINTEREST EXPENSE:
Salaries and employee benefits ................................... 15,724 15,867
Occupancy and equipment expenses ................................. 3,281 3,325
Other ............................................................ 7,536 8,140
------- -------
Total noninterest expense ........................................... 26,541 27,332
------- -------
Income before provision for income taxes ............................ 12,167 10,230
Provision for income taxes .......................................... 3,974 3,288
------- -------
Net income .......................................................... $ 8,193 $ 6,942
======= =======
Net income per common share ......................................... $ 1.22 $ 1.04
======= =======
Weighted average common and common equivalent shares outstanding .... 6,736 6,675
======= =======
</TABLE>
See accompanying notes to unaudited consolidated financial statements
7
<PAGE> 8
ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
For the nine months
ended September 30,
-------------------
1997 1996
---- ----
(In thousands)
<S> <C> <C>
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES ................................. $ 9,505 $ 202
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investment securities .............................................. (3,580) (23,857)
Proceeds from maturities of investment securities ............................... 16,860 9,569
Purchases of securities available for sale ...................................... (51,299) (34,832)
Proceeds from sale of securities available for sale ............................. -- 1,816
Proceeds from maturities of securities available for sale ....................... 12,107 49,452
Net (increase) decrease in interest bearing deposits in other banks ............. (1,869) 10,929
Net decrease in Federal funds sold and securities purchased
under resell agreements ...................................................... 1,411 16,136
Net increase in loans ........................................................... (19,239) (35,588)
Purchases of property, equipment, and leasehold improvements .................... (3,219) (1,916)
Proceeds from sale of property, equipment, and leasehold improvements ........... -- 381
Proceeds from sale of assets .................................................... -- 851
-------- --------
Net cash used by investing activities ........................................... (48,828) (7,059)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits ........................................................ 36,724 189
Sale of deposits ................................................................ -- (8,500)
Increase (decrease) in Federal funds purchased and securities sold
under agreements to repurchase ............................................... 10,990 (3,823)
Net increase (decrease) in short and long-term borrowings and capital leases .... (7,015) 19,640
Exercise of stock options ....................................................... (437) 100
Dividends on common stock ....................................................... (2,232) (1,168)
Dividends on and retirement of preferred stock .................................. -- (57)
-------- --------
Net cash provided by financing activities ....................................... 38,030 6,381
-------- --------
Decrease in cash and cash equivalents ........................................... (1,293) (476)
Cash and cash equivalents, beginning of period .................................. 36,730 39,202
-------- --------
Cash and cash equivalents, end of period ........................................ $ 35,437 $ 38,726
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest .......................................................... $ 25,482 $ 23,209
======== ========
Cash paid for income taxes ...................................................... $ 3,977 $ 3,669
======== ========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Acquisition of collateral in satisfaction of loans .............................. $ 811 $ 275
======== ========
Adjustments to market value of other real estate owned .......................... $ -- $ (16)
======== ========
Adjustment to market value of securities available for sale, net
of deferred income taxes ..................................................... $ 470 $ (678)
======== ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements
8
<PAGE> 9
ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine months ended September
30, 1997 are subject to year-end audit and are not necessarily indicative of the
results of operations to be expected for the year ending December 31, 1997.
These interim financial statements should be read in conjunction with the
consolidated financial statements and footnotes thereto included in the
Company's Form 10-K for the year ended December 31, 1996.
NOTE B - COMMITMENT AND CONTINGENCIES
The Company's subsidiary banks make loan commitments and incur contingent
liabilities in the normal course of business which are not reflected in the
consolidated statements of condition.
NOTE C - RECENTLY ISSUED PRONOUNCEMENTS
Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities
In October 1996, the FASB issued SFAS 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities," as amended by
SFAS 127, "Deferral of the Effective Date of Certain Provisions of SFAS
Statement No. 125." The latter establishes standards in 1997 for accounting for
certain transfers of assets and extinguishments of liabilities. It requires that
an entity recognize the financial and servicing assets it controls and the
liabilities it has incurred, and derecognize financial assets when control has
been surrendered, as well as liabilities when extinguished. Certain guidelines
set forth in the statement must be met before an asset can be considered
transferred or a liability extinguished. This statement is applied prospectively
for transfers of financial assets and extinguishments of liabilities occurring
after December 31, 1996. The adoption of SFAS 125, as amended by SFAS 127, did
not have a material effect on the accompanying unaudited consolidated financial
statements of the Company.
Earnings Per Share
In February 1997, the FASB issued SFAS 128, "Earnings Per Share". SFAS 128
specifies the computation, presentation, and disclosure requirements for
earnings per share (EPS). Some of the changes made to the EPS computations
include: (a) eliminating the presentation of primary EPS and replacing it with
basic EPS, with the principal difference being that common stock equivalents
(CSEs) are not considered in computing basic EPS, (b) eliminating the modified
treasury stock method and the three percent materiality provision, and (c)
revising the contingent share provisions and the supplemental EPS data
requirements. SFAS 128 requires dual presentation of basic and diluted EPS on
the face of the income statement for all entities with complex capital
structures regardless of whether basic and diluted EPS are the same; it also
requires a reconciliation of the numerator and denominator used in computing
basic and diluted EPS. SFAS 128 is effective for financial statements issued for
periods ending after December 15, 1997, including interim periods. Earlier
application is not permitted. Under SFAS 128, the Company's basic and diluted
EPS would be $.43 and $.42, respectively for the Company's 1997 Quarter ended
September 30, 1997. The Company's basic and diluted EPS would be $1.25 and
$1.21, respectively for the Company's 1997 Nine Months ended September 30, 1997.
9
<PAGE> 10
ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
Comprehensive Income
In June 1997, the FASB issued SFAS 130, "Reporting Comprehensive Income." SFAS
130 establishes standards for reporting and display of comprehensive income and
its components (revenues, expenses, gains, and losses) in a full set of
general-purpose financial statements. This Statement requires that all items
that are required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. Comprehensive income includes
all changes in equity during a period, excluding investments by and
distributions to stockholders. Under SFAS 130, the Company will report changes
in realized gains and losses attributable to available for sale securities, as
well as the amortization of unearned restricted stock, as components of
comprehensive income. This statement is effective for fiscal years beginning
after December 15, 1997, and requires comparative financial information
presented for prior periods to be reclassified to conform to the requirements of
the statement. Early application is permitted.
Segment Reporting
In June 1997, the FASB issued SFAS 131, "Disclosures About Segments of a
Business Enterprise and Related Information." SFAS 131, effective for fiscal
years beginning after December 15, 1997, establishes standards for the way that
public business enterprises report information about operating segments in
annual financial statements and requires that those enterprises report selected
information about operating segments in interim financial reports issued to
shareholders. It also establishes standards for related disclosures about
products and services, geographic areas, and major customers. Early application
is permitted, but is not required. Comparative information for interim periods
must be reported in interim financial statements commencing with the first
quarter immediately subsequent to the first year of adoption.
NOTE D-MERGERS AND ACQUISITIONS
On September 30, 1996, the Company merged with FIRSTBANC Holding Company, Inc.
("FIRSTBANC"), a one bank holding company headquartered in Robertsdale, Alabama.
The Company acquired all of the outstanding common stock of FIRSTBANC in
exchange for 305,000 shares of the Company's common stock. The Company recorded
the FIRSTBANC merger as a pooling-of-interests, and, accordingly, financial
statements for all periods have been restated to reflect the results of
operations of the two companies on a combined basis from the earliest period
presented, except for dividends per share.
On July 25, 1997, the Company announced that it had entered into a definitive
agreement to merge with First American Bancorp, located in Decatur, Alabama
("FIRST AMERICAN"). At September 30, 1997, FIRST AMERICAN's assets totaled $233
million. Terms of the agreement with FIRST AMERICAN call for the Company to
exchange a total of 2.2 million shares of the Company's common stock for FIRST
AMERICAN shares on a 0.7199-to-one ratio for outstanding FIRST AMERICAN common
shares and outstanding stock options. Completion of the merger is subject to the
approval of the shareholders of both the Company and FIRST AMERICAN. The
shareholder meetings for both the Company and FIRST AMERICAN to consider the
merger are scheduled for November 26, 1997. The merger is expected to be
accounted for as a pooling of interests.
On August 15, 1997, the Company completed the relocation of one of its bank
subsidiaries, First Bank of Baldwin County ("First Bank"), to Cantonment,
Florida. First Bank was converted in connection with the relocation to a
national banking association to be known as Citizens and Peoples Bank, N.A.
("C&P"). This is the first banking subsidiary of the Company located in
Florida. On August 15, 1997, the Company also completed, in connection with the
C&P formation, the combination of certain assets and liabilities of First Bank
with Gulf Bank, to form First Gulf Bank.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BASIS OF PRESENTATION
The following is a discussion and analysis of the consolidated financial
condition of the Company at September 30, 1997, and the results of its
operations for the three and nine month periods ended September 30, 1997 and
1996. This information should be read in conjunction with the Company's
unaudited consolidated financial statements and related notes appearing
elsewhere in this report and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" appearing in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.
PERFORMANCE OVERVIEW
The Company's net income was $2.84 million for the third quarter of 1997 (the
"1997 Quarter"), compared to $2.59 million for the third quarter of 1996 (the
"1996 Quarter"). Net income for the nine month period ended September 30, 1997
(the "1997 Nine Months"), was $8.19 million, compared to $6.94 million for the
nine months ended September 30, 1996 (the "1996 Nine Months"). Net income per
common share for the 1997 and 1996 Quarters was $.42 and $.39, respectively. For
the 1997 Nine Months, net income per common share was $1.22, compared to $1.04
for the 1996 Nine Months.
During the 1996 Nine Months, the Company absorbed an after tax charge of
approximately $947,000 ($.09 per common share) as the result of termination of
employment contracts with former executives of the Company. In addition, the
Company recorded a non-operating after tax gain of $274,000 ($.04 per common
share) resulting from the sale of a branch along with its deposits. Excluding
these transactions, the per common share net income of the Company would have
been $1.09 for the 1996 Nine Months.
The return on average assets for the Company was 1.22% for the 1997 Nine Months
compared to 1.12% for the 1996 Nine Months. The return on average stockholders'
equity increased for the 1997 Nine Months to 15.75%, as compared to 15.01% for
the 1996 Nine Months. Book value per share at September 30, 1997 was $10.98, an
increase of $1.25 from year end 1996. Tangible book value per share at September
30, 1997 was $9.91, an increase of $1.31 from year end 1996. The Company paid a
$.345 cash dividend on common shares in the 1997 Nine Months, compared to $.19
on common shares in the 1996 Nine Months.
11
<PAGE> 12
NET INCOME
The principal reason for the increase in net income for the 1997 Quarter and the
1997 Nine Months, compared to the same periods in 1996, was the growth in loans
relative to all other earning assets.
The largest component of the Company's net income is its net interest income,
which is the difference between the income earned on assets and the interest
paid on deposits and borrowings used to support such assets. Average earning
assets for the 1997 Nine Months increased by $66.7 million and average
interest-bearing liabilities increased by $61.1 million. The Company's net
interest income benefited from the faster growth of average earning assets,
especially loans, than average interest-bearing liabilities. The average taxable
equivalent rates earned on assets were 8.46% for the 1997 Nine Months compared
to 8.59% for the 1996 Nine Months. The average rates paid on interest-bearing
liabilities were 4.72% for the 1997 Nine Months, compared to 4.67% for the 1996
Nine Months. The net interest margin for the 1997 Nine Months was 4.33%,
compared to 4.52% for the 1996 Nine Months.
12
<PAGE> 13
The following table depicts, on a taxable equivalent basis for the 1997 and 1996
Nine Months, certain information related to the Company's average balance sheet
and its average yields on assets and average costs of liabilities. Such yields
or costs are derived by dividing income or expense by the average daily balance
of the associated assets or liabilities.
AVERAGE BALANCES, INCOME AND EXPENSES AND RATES
(AMOUNTS IN THOUSANDS, EXCEPT YIELDS AND RATES)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
---------------------------------------------------------------
1997 1996
------------------------------ -------------------------------
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
ASSETS: BALANCE EXPENSE RATE BALANCE EXPENSE RATE
--------- --------- ------ ---------- --------- ------
<S> <C> <C> <C> <C> <C> <C>
Earning assets:
Loans(1)(3) ..................................... $ 619,912 $ 42,280 9.09% $ 563,306 $ 39,617 9.38%
Securities:
Taxable ........................................ 141,659 6,985 6.57 139,544 6,640 6.34
Tax exempt ..................................... 20,793 1,324 8.49 17,732 1,083 8.14
Cash balances in other banks .................... 187 7 4.99 5,159 203 5.25
Funds sold ...................................... 41,368 1,757 5.66 31,168 1,274 5.45
Trading account securities ...................... 2,863 111 5.17 3,182 154 6.45
--------- --------- --------- ---------
Total earning assets(2) ..................... 826,782 52,464 8.46 760,091 48,971 8.59
--------- --------- --------- ---------
Cash and due from banks ........................... 25,972 29,545
Premises and equipment ............................ 22,847 29,367
Other assets ...................................... 30,335 15,079
Allowance for loan losses ......................... (9,525) (9,249)
--------- ---------
Total assets ............................... $ 896,411 $ 824,833
========= =========
LIABILITIES:
Interest-bearing liabilities:
Interest-bearing transaction accounts ........... $ 85,984 1,785 2.77 $ 81,073 1,693 2.78
Savings deposits ................................ 183,519 5,045 3.67 199,462 5,423 3.63
Time deposits ................................... 327,830 13,633 5.54 270,342 11,418 5.63
Funds purchased ................................. 75,101 2,964 5.26 64,476 2,530 5.23
Other short-term borrowings ..................... 31,086 1,402 6.01 32,201 1,567 6.49
Long-term debt .................................. 5,955 260 5.82 777 53 9.09
--------- --------- --------- ---------
Total interest-bearing liabilities ......... 709,475 25,089 4.72 648,331 22,684 4.67
--------- --------- ---- --------- --------- ----
Demand deposits ................................... 104,057 103,528
Accrued interest and other liabilities ............ 13,541 11,288
Stockholders' equity .............................. 69,338 61,686
--------- ---------
Total liabilities and stockholders' equity .... $ 896,411 $ 824,833
========= =========
Net interest spread ............................... 3.74% 3.92%
==== ====
Net interest income/margin on
a taxable equivalent basis ...................... 27,375 4.41% 26,287 4.61%
==== ====
Tax equivalent adjustment(2) ...................... 549 498
--------- ---------
Net interest income/margin ........................ $ 26,826 4.33% $ 25,789 4.52%
========= ==== ========= ====
</TABLE>
- --------------------
(1) Average loans include nonaccrual loans. All loans and deposits are domestic.
(2) Tax equivalent adjustments are based upon assumed tax rate of 34%, and do
not reflect the disallowance for Federal income tax purposes of interest
expense related to certain tax exempt assets.
(3) Fees in the amount of $1,346,000 and $1,197,000 are included in interest and
fees on loans for the Nine Months ended September 30, 1997 and 1996,
respectively.
13
<PAGE> 14
The following table sets forth, on a taxable equivalent basis, the effect which
varying levels of earning assets and interest-bearing liabilities and the
applicable rates had on changes in net interest income for the 1997 Nine Months
compared to the 1996 Nine Months. For the purposes of this table, changes which
are not solely attributable to volume or rate are allocated to volume and rate
on a pro rata basis.
ANALYSIS OF CHANGES IN NET INTEREST INCOME
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------------
1997 COMPARED TO 1996
VARIANCE DUE TO
------------------------------
VOLUME YIELD/RATE TOTAL
------------------------------
<S> <C> <C> <C>
EARNING ASSETS:
Loans ......................................... $ 4,535 $(1,872) $ 2,663
Securities:
Taxable ..................................... 102 243 345
Tax exempt .................................. 193 48 241
Cash balances in other banks .................. (187) (9) (196)
Funds sold .................................... 432 51 483
Trading account securities .................... (15) (28) (43)
------- ------- -------
Total interest income .................... 5,060 (1,567) 3,493
INTEREST-BEARING LIABILITIES:
Interest-bearing transaction accounts ......... 102 (10) 92
Savings and money market deposits ............. (473) 95 (378)
Time deposits ................................. 2,512 (297) 2,215
Funds purchased ............................... 420 14 434
Other short-term borrowings ................... (52) (113) (165)
Long-term debt ................................ 244 (37) 207
------- ------- -------
Total interest expense ................... 2,753 (348) 2,405
------- ------- -------
Net interest income on a taxable
equivalent basis ....................... $ 2,307 $(1,219) 1,088
======= =======
Taxable equivalent adjustment ................. (51)
-------
Net interest income ........................... $ 1,037
=======
</TABLE>
14
<PAGE> 15
Net revenue from earning assets during the 1997 Nine Months increased $1.0
million or 4.0%, over the corresponding period in 1996 attributable to the
growth in loan volume.
The provision for loan losses represents a charge to current earnings necessary
to maintain the allowance for loan losses at an appropriate level based on
management's analysis of the potential risk in the loan portfolio. The amount of
the provision is a function of the level of loans outstanding, the level of
non-performing loans, historical loan loss experience, the amount of loan losses
actually charged against the allowance during a given period and current and
anticipated economic conditions. The provision for loan losses was $40,000 for
the 1997 Quarter, compared with no provision in the 1996 Quarter. The provision
for loan losses was $107,000 for the 1997 Nine Months, compared to $209,000 in
the 1996 Nine Months. Recoveries exceeded charge-offs by $270,000 for the 1997
Nine Months. The allowance for loan losses as a percentage of outstanding loans,
net of unearned income, was 1.54% at September 30, 1997, compared to 1.52% at
December 31, 1996. Because of the inherent uncertainty of assumptions made
during the assessment process, there can be no assurance that loan losses in
future periods will not exceed the allowance for loan losses or that additional
allocations to the allowance will not be required. See Asset Quality.
Total noninterest income for the 1997 Quarter was $4.2 million, compared to $3.9
million for the 1996 Quarter. For each of the 1997 Nine Months and 1996 Nine
Months, noninterest income was $12.0 million. Service charges on deposits for
the 1997 Quarter were $961,000, compared with $935,000 for the 1996 Quarter. For
the 1997 Nine Months, service charges were $2.8 million, compared with the same
amount for the 1996 Nine Months. Revenue in the investment services division
totaled $2.2 million in the 1997 Quarter and $1.8 million the 1996 Quarter, and
totaled $5.8 million in the 1997 Nine Months, compared to $5.9 million in the
1996 Nine Months. Trust fees increased $105,000 in the 1997 Quarter compared to
the 1996 Quarter and increased $219,000 for the 1997 Nine Months, when compared
with the 1996 Nine Months. Other noninterest income decreased $133,000 in the
1997 Quarter when compared to the 1996 Quarter and decreased $92,000 for the
1997 Nine Months when compared with the 1996 Nine Months. The 1996 Nine Months
include a non-operating gain of $274,000 resulting from the sale of a branch and
its deposits and an $80,000 recovery from a settlement with a third-party
financial institution. The expected decline in other noninterest income from
1996 was partially offset by security settlement services provided on a contract
basis for an independent insurance company totaling $517,000 in the 1997 Nine
Months, compared to $469,000 during the 1996 Nine Months. The security
settlement service contractual arrangement with this company terminated
effective June 30, 1997.
Noninterest expense was $9.1 million for the 1997 Quarter and $9.2 million for
the 1996 Quarter. For the 1997 Nine Months, noninterest expense was $26.5
million, compared to $27.3 million for the 1996 Nine Months. Salaries and
employee benefits were $5.7 million for the 1997 Quarter, compared to $4.8
million for the 1996 Quarter, resulting from increased commissions relating to
higher volume in the investment services division, staff increases, normal
increases in base compensation, and higher bonus and incentive charges. For the
1997 Nine Months, salaries and employee benefits were $15.7 million compared to
$15.9 million in the 1996 Nine Months. The modest decrease in salaries and
employee benefits is attributable to non-operating charges in the 1996 Nine
Months totaling $947,000 relating to the termination of employment contracts
with former executives of the Company that offset the growth otherwise expected.
Occupancy and equipment expense totaled $1.1 million in the 1997 Quarter and
$1.2 million in the 1996 Quarter. For both the 1997 Nine Months and 1996 Nine
Months, occupancy and equipment expenses totaled $3.3 million. Other noninterest
expense decreased to $2.2 million in the 1997 Quarter, compared with $3.2
million in the 1996 Quarter. Other noninterest expense was $7.5 million in the
1997 Nine Months and $8.1 million in the 1996 Nine Months. The primary reason
for the decrease in other noninterest expense was a SAIF assessment of $677,000
in the 1996 Quarter and 1996 Nine Months.
Income tax expense was $1.3 million for the 1997 Quarter compared to $900,000
for the 1996 Quarter, reflecting higher taxable income. For the 1997 Nine
Months, income tax expense was $4.0 million, compared to $3.3 million for the
1996 Nine Months, which also reflects higher taxable income. The effective tax
rates for the 1997 Quarter and the 1997 Nine Months were 32.1% and 32.7%,
respectively.
15
<PAGE> 16
EARNING ASSETS
Loans comprised the largest single category of the Company's earning assets on
September 30, 1997. Loans, net of unearned income, were $630.1 million or 67.1%
of total assets at September 30, 1997, compared to $611.4 million or 68.9% at
December 31, 1996. Loans grew $18.7 million, or 3.1%, during the 1997 Nine
Months.
Investment securities decreased $13.3 million in the 1997 Nine Months. Purchases
of investment securities totaled $3.6 million. Proceeds from maturities of
investment securities totaled $16.9 million, substantially all of which were
attributable to paydowns of mortgage backed securities.
Securities available for sale increased $39.9 million in the 1997 Nine Months.
Purchases of available for sale securities totaled $51.3 million and maturities
and calls of available for sale securities totaled $12.1 million. Write up to
estimated market value of available for sale securities totaled $721,000 during
the 1997 Nine Months.
Trading account securities, $2.6 million at September 30, 1997, are securities
owned by the Company prior to delivery to the Company's customers. It is the
policy of the Company to limit positions in such securities to reduce its
exposure to market and interest rate changes Federal funds sold and securities
purchased under agreements to resell totaled $44.8 million at September 30, 1997
compared to $46.2 at December 31, 1996.
DEPOSITS AND OTHER FUNDING SOURCES
Deposits increased $36.7 million from year-end 1996, to $711.4 million at
September 30, 1997. Primarily all of the growth in deposits related to consumer
certificates of deposit.
Federal funds purchased and securities sold under agreements to repurchase
totaled $102.9 million at September 30, 1997, an increase of $11.0 million from
December 31, 1996. The Treasury tax and loan account increased to $4.5 million
at September 30, 1997, compared with $3.0 million at December 31, 1996.
Short-term borrowings at September 30, 1997 totaled $18.3 million consisting of
borrowings by the Company from an independent bank.
The Company's long-term debt at September 30, 1997 consists of (i) notes payable
to the Federal Home Loan Bank totaling $14.2 million, including $9.2 million
floating rate notes, adjusted quarterly, bearing interest at libor, less 15
basis points, maturing on May 23, 1999, and $5.0 million maturing on July 11,
2002 with a conversion option available to the Company on July 11, 1999 to
convert the advance to libor, adjusted quarterly, and (ii) obligations under
capital leases totaling $280,000.
ASSET QUALITY
Nonperforming loans are comprised of loans past due 90 days or more and still
accruing interest, loans accounted for on a nonaccrual basis and loans in which
the terms have been restructured to provide a reduction or deferral of interest
or principal because of a deterioration in the financial position of the
borrower. Accrual of interest is discontinued on a loan when management
believes, after considering economic and business conditions and collection
efforts, that the borrower's financial condition is such that the collection of
interest is doubtful. A delinquent loan is generally placed on nonaccrual status
when it becomes 90 days or more past due. When a loan is placed on nonaccrual
status, all interest which has been accrued on the loan but remains unpaid is
reversed and deducted from earnings as a reduction of reported interest income.
No additional interest is accrued on the loan balance until the collection of
both principal and interest becomes reasonably certain. When a problem loan is
finally resolved, there may ultimately be an actual writedown or charge-off of
the principal balance of the loan which could necessitate additional charges to
earnings.
At September 30, 1997, nonperforming assets totaled $3.1 million, an increase of
$1.0 million from December 31, 1996. Nonperforming assets as a percentage of
loans plus other real estate was .49% at September 30, 1997 compared to .36% at
December 31, 1996.
16
<PAGE> 17
NONPERFORMING ASSETS
(AMOUNTS IN THOUSANDS, EXCEPT PERCENTAGES)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
<S> <C> <C>
Nonaccrual loans ...................................... $ 1,734 $ 1,111
Restructured loans .................................... 484 605
Loans past due 90 days or more and still accruing ..... -- --
--------- ---------
Total nonperforming loans .......................... 2,218 1,716
Other real estate owned ............................... 902 468
--------- ---------
Total nonperforming assets ......................... $ 3,120 $ 2,184
========= =========
Allowance for loan losses to period-end loans ......... 1.54% 1.52%
Allowance for loan losses to period-end
nonperforming loans ................................ 437.29 543.24
Allowance for loan losses to period-end
nonperforming assets ............................... 310.87 426.83
Net recoveries to average loans ....................... (0.06)(1) (0.03)
Nonperforming assets to period-end loans
and other real estate owned ........................ 0.49 0.36
Nonperforming loans to period-end loans ............... 0.35 0.28
</TABLE>
- --------------------
(1) Annualized
17
<PAGE> 18
Net loan recoveries for the 1997 Nine Months totaled $270,000, or .06%
(annualized) of average loans for the period. The allowance for loan losses as a
percentage of total loans, net of unearned income, was 1.54% at September 30,
1997 compared to 1.52% at December 31, 1996. The following table analyzes
activity in the allowance for loan losses for the 1997 Nine Months.
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(AMOUNTS IN THOUSANDS, EXCEPT PERCENTAGES)
<TABLE>
<S> <C>
Allowance for loan losses at
beginning of period ...................................... $ 9,322
Charge-offs:
Commercial, financial and agricultural ................... 140
Real estate - mortgage ................................... 316
Consumer ................................................. 371
-------
Total charge-offs ................................... 827
-------
Recoveries:
Commercial, financial and agricultural ................... 711
Real estate - mortgage ................................... 181
Consumer ................................................. 205
-------
Total recoveries .................................... 1,097
-------
Net charge-offs (recoveries) ........................ (270)
Provision for (benefit of) loan losses ........................ 107
-------
Allowance for loan losses at
period-end ............................................... $ 9,699
=======
</TABLE>
The loan portfolio is periodically reviewed to evaluate the outstanding loans
and to measure both the performance of the portfolio and the adequacy of the
allowance for loan losses. This analysis includes a review of delinquency
trends, actual losses and internal credit ratings. Based on this analysis,
management considers the allowance for loan losses at September 30, 1997 to be
adequate to cover possible loan losses in the portfolio as of that date.
However, because of the inherent uncertainty of assumptions made during the
evaluation process, there can be no assurance that loan losses in future periods
will not exceed the allowance for loan losses or that additional allocations to
the allowance will not be required.
INTEREST RATE SENSITIVITY
The Company monitors and manages the pricing and maturity of its assets and
liabilities in order to diminish the potential adverse impact that changes in
interest rates could have on its net interest income. The principal monitoring
technique employed by the Company is the measurement of the interest sensitivity
"gap," which is the positive or negative dollar difference between assets and
liabilities that are subject to interest rate repricing within a given period of
time. Interest rate sensitivity can be managed by repricing assets and
liabilities, selling securities available for sale, replacing an asset or
liability at maturity, or by adjusting the interest rate during the life of an
asset or liability. Managing the amount of assets and liabilities repricing in
the same time interval helps to hedge the risk and minimize the impact of rising
or falling interest rates on net interest income.
18
<PAGE> 19
The Company evaluates interest sensitivity risk and then formulates guidelines
regarding asset generation and repricing, funding sources and pricing, and
off-balance sheet commitments in order to decrease interest sensitivity risk.
The Company uses computer simulations to measure the net income effect of
various interest rate scenarios. The modeling reflects interest rate changes and
the related impact on net income over specified periods of time.
The following table illustrates the Company's interest rate sensitivity at
September 30, 1997, assuming relevant assets and liabilities are collected and
paid, respectively, based upon historical experience rather than their stated
maturities.
INTEREST SENSITIVITY ANALYSIS
(AMOUNTS IN THOUSANDS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
------------------------------------------------------------------------------
AFTER ONE AFTER THREE
THROUGH THROUGH
WITHIN ONE THREE TWELVE WITHIN ONE GREATER THAN
MONTH MONTHS MONTHS YEAR ONE YEAR TOTAL
---------- --------- ----------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Earning assets:
Loans(1) .................................. $ 291,068 $ 38,058 $ 96,645 $ 425,771 $ 202,634 $ 628,405
Securities(2) ............................. 11,488 15,493 19,210 46,191 129,806 175,997
Interest-bearing deposits in
other banks ............................. 2,069 -- -- 2,069 -- 2,069
Funds sold ................................ 44,838 -- -- 44,838 -- 44,838
--------- --------- --------- --------- --------- ---------
Total interest-earning assets ......... $ 349,463 $ 53,551 $ 115,855 $ 518,869 $ 332,440 $ 851,309
LIABILITIES:
Interest-bearing liabilities:
Interest-bearing deposits:
Demand deposits ....................... $ -- $ -- $ 89,948 $ 89,948 $ -- $ 89,948
Savings deposits ...................... 141,760 -- -- 141,760 47,254 189,014
Time deposits(3) ...................... 28,965 103,673 128,021 260,659 56,791 317,450
Funds purchased .......................... 102,861 -- -- 102,861 -- 102,861
Short-term borrowings(4) ................. 22,773 -- -- 22,773 -- 22,773
Long-term debt ........................... 2 9,204 18 9,224 5,256 14,480
--------- --------- --------- --------- --------- ---------
Total interest-bearing liabilities .... $ 296,361 $ 112,877 $ 217,987 $ 627,225 $ 109,301 $ 736,526
--------- --------- --------- --------- --------- ---------
Period gap ................................... $ 53,102 $ (59,326) $(102,132) $(108,356) $ 223,139
========= ========= ========= ========= =========
Cumulative gap ............................... $ 53,102 $ (6,224) $(108,356) $(108,356) $ 114,783 $ 114,783
========= ========= ========= ========= ========= =========
Ratio of cumulative gap to total
earning assets .............................. 6.24% (0.73)% (12.73)% (12.73)% 13.48%
</TABLE>
- ------------------------------
(1) Excludes nonaccrual loans of $1,734,000.
(2) Excludes investment equity securities of $4,011,000.
(3) Excludes matured certificates which have not been redeemed by the customer
and on which no interest is accruing.
(4) Includes treasury, tax and loan account of $4,523,000.
19
<PAGE> 20
The Company generally would benefit from increasing market rates of interest
when it has an asset-sensitive gap and generally would benefit from decreasing
market rates of interest when it is liability sensitive. The Company is
liability sensitive through the one year time frame. However, the Company's gap
analysis is not a precise indicator of its interest sensitivity position. The
analysis presents only a static view of the timing of maturities and repricing
opportunities, without taking into consideration that changes in interest rates
do not affect all assets and liabilities equally. For example, rates paid on a
substantial portion of core deposits may change contractually within a
relatively short time frame, but those rates are viewed by management as
significantly less interest-sensitive than market-based rates, such as those
paid on non-core deposits. Accordingly, management believes that a
liability-sensitive gap position is not as indicative of the Company's true
interest sensitivity as it would be for an organization which depends to a
greater extent on purchased funds to support earning assets. Net interest income
may be affected by other significant factors in a given interest rate
environment, including changes in the volume and mix of earning assets and
interest-bearing liabilities.
LIQUIDITY AND CAPITAL ADEQUACY
The Company's net loan to deposit ratio was 87.2% at September 30, 1997,
compared to 89.2% at year end 1996. The Company's liquid assets as a percentage
of total deposits were 11.9% at September 30, 1997, compared to 12.6% at
year-end 1996. At September 30, 1997, the Company had unused federal funds lines
of approximately $65.0 million, unused lines at the Federal Home Loan Bank of
$46.0 million and an unused credit line at an independent bank of $1.7 million.
Management analyzes the level of off-balance sheet assets such as unfunded loan
commitments and outstanding letters of credit as they relate to the levels of
cash, cash equivalents, liquid investments, and available funds lines in an
attempt to minimize the possibility that a potential shortfall will exist. Based
on this analysis, management believes that the Company has adequate liquidity to
meet short-term operating requirements. However, no assurances can be given in
this regard.
The Company's stockholders' equity increased by $6.1 million from December 31,
1996 to $72.2 million at September 30, 1997. This increase was attributable to:
<TABLE>
<CAPTION>
<S> <C>
Net income .................................................................. $ 8,193,000
Exercise of stock options ................................................... (437,000)
Increase in unrealized gains on securities available for sale, net
of deferred income tax benefits ........................................... 470,000
Cash dividends declared ..................................................... (2,232,000)
Decrease in unearned restricted stock ....................................... 70,000
-----------
Net increase ............................................................ $ 6,064,000
===========
</TABLE>
A strong capital position is vital to the continued profitability of the Company
because it promotes depositor and investor confidence and provides a solid
foundation for future growth of the organization. The capital of the Company and
its subsidiary banks (the "Banks") exceeded all prescribed regulatory capital
guidelines at September 30, 1997. Under the capital guidelines of their
regulators, the Company and the Banks are currently required to maintain a
minimum risk-based total capital ratio of 8%, with at least 4% being Tier 1
capital. Tier 1 capital consists of common stockholders' equity, qualifying
perpetual preferred stock, and minority interests in equity accounts of
consolidated subsidiaries, less goodwill. In addition, the Company and the Banks
must maintain a minimum Tier 1 leverage ratio (Tier 1 capital to total assets)
of at least 3%, but this minimum ratio is increased by 100 to 200 basis points
for other than the highest rated institutions. The following table sets forth
the risk-based and leverage ratios of the Company and each subsidiary bank at
September 30, 1997:
20
<PAGE> 21
<TABLE>
<CAPTION>
TIER 1 RISK TOTAL RISK TIER 1
BASED BASED LEVERAGE
----- ----- --------
<S> <C> <C> <C>
Alabama National BanCorporation ................... 9.49% 10.74% 7.29%
National Bank of Commerce of Birmingham ........... 10.25 11.50 7.76
Alabama Exchange Bank ............................. 14.42 15.54 9.74
Bank of Dadeville ................................. 12.76 13.88 8.95
Citizens Bank of Talladega ........................ 17.50 18.75 10.06
Citizens and Peoples Bank, N.A .................... 155.12 155.12 21.56
First National Bank of Ashland .................... 14.00 14.88 8.37
First Gulf Bank ................................... 8.56 9.54 8.79
Required minimums ................................. 4.00 8.00 4.00
</TABLE>
21
<PAGE> 22
PART II OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS:
Exhibit 3.1 - Certificate of Incorporation (filed as an
Exhibit to the Company's Registration Statement on
Form S-1 (Commission File No. 33-83800) and
incorporated herein by reference).
Exhibit 3.1A - Certificate of Amendment of Certificate of
Incorporation (filed as an Exhibit to the Company's
Annual Report of Form 10-K for the year ended
December 31, 1996 and incorporated herein by reference).
Exhibit 3.2 - Bylaws (filed as an Exhibit to the Company's
Registration Statement on Form S-1 (Commission File
No. 33-83800) and incorporated herein by reference).
Exhibit 10.1 - Agreement and Plan of Merger dated July 24,
1997 between the Company and First American Bancorp
(filed as Appendix A to Joint Proxy Statement, included
in the Company's Registration Statement on Form S-4
(Commission File No. 333-36565) and incorporated herein
by reference.)
Exhibit 11 - Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedules (for SEC use only)
(b) REPORTS ON FORM 8-K
Report on Form 8-K filed July 29, 1997 to report
proposed merger with First American Bancorp.
22
<PAGE> 23
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.
ALABAMA NATIONAL BANCORPORATION
DATE: November 11, 1997 /s/John H. Holcomb, III
----------------- -----------------------
John H. Holcomb, III, its Chairman and Chief
Executive Officer
DATE: November 11, 1997 /s/James S. Parks, Jr.
----------------- ----------------------
James S. Parks, Jr., its Senior Vice President -
Finance, Controller and Treasurer
(principal financial and accounting officer)
23
<PAGE> 1
EXHIBIT 11
ALABAMA NATIONAL BANCORPORATION
COMPUTATION OF EARNINGS PER SHARE (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1997
------------------------------------
Primary Fully Diluted
------ ------
<S> <C> <C>
Net income .............................................. $8,193 $8,193
====== ======
Average shares outstanding .............................. 6,531 6,531
Effect of stock options ................................. 188 202
Effect of Performance Share and
Deferred Compensation Plans ........................... 17 20
------ ------
Applicable shares outstanding ........................... 6,736 6,753
====== ======
Earnings per share ...................................... $ 1.22 $.1.21
====== ======
<CAPTION>
Three Months Ended September 30, 1997
-------------------------------------
Primary Fully Diluted
------ ------
<S> <C> <C>
Net income .............................................. $2,844 $2,844
====== ======
Average shares outstanding .............................. 6,552 6,552
Effect of stock options ................................. 200 202
Effect of Performance Share and
Deferred Compensation Plans ........................... 22 22
------ ------
Applicable shares outstanding ........................... 6,774 6,776
====== ======
Earnings per share ...................................... $ 0.42 $ 0.42
====== ======
</TABLE>
24
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 35,437
<INT-BEARING-DEPOSITS> 2,069
<FED-FUNDS-SOLD> 44,838
<TRADING-ASSETS> 2,590
<INVESTMENTS-HELD-FOR-SALE> 115,963
<INVESTMENTS-CARRYING> 61,455
<INVESTMENTS-MARKET> 61,900
<LOANS> 630,139
<ALLOWANCE> 9,699
<TOTAL-ASSETS> 938,792
<DEPOSITS> 711,405
<SHORT-TERM> 125,634
<LIABILITIES-OTHER> 15,088
<LONG-TERM> 14,480
0
0
<COMMON> 6,574
<OTHER-SE> 65,611
<TOTAL-LIABILITIES-AND-EQUITY> 938,792
<INTEREST-LOAN> 42,181
<INTEREST-INVEST> 7,859
<INTEREST-OTHER> 1,875
<INTEREST-TOTAL> 51,915
<INTEREST-DEPOSIT> 20,463
<INTEREST-EXPENSE> 25,089
<INTEREST-INCOME-NET> 26,826
<LOAN-LOSSES> 107
<SECURITIES-GAINS> 7
<EXPENSE-OTHER> 26,541
<INCOME-PRETAX> 12,167
<INCOME-PRE-EXTRAORDINARY> 12,167
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,193
<EPS-PRIMARY> 1.22
<EPS-DILUTED> 1.21
<YIELD-ACTUAL> 4.33
<LOANS-NON> 1,734
<LOANS-PAST> 0
<LOANS-TROUBLED> 484
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 9,322
<CHARGE-OFFS> 827
<RECOVERIES> 1,097
<ALLOWANCE-CLOSE> 9,699
<ALLOWANCE-DOMESTIC> 9,699
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 9,699
</TABLE>
