<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 June 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 August 11, 1997
----- ------------------------------
Common Stock, $1.00 Par Value 6,565,303
<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
June 30, 1997 and December 31, 1996................................. 3
Consolidated statements of income
Three month periods ended June 30, 1997 and 1996;
Six month periods ended June 30, 1997 and 1996...................... 4
Consolidated statements of cash flows
Six month periods ended June 30, 1997 and 1996...................... 8
Notes to the unaudited consolidated financial statements
June 30, 1997....................................................... 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................... 11
PART II. OTHER INFORMATION
- --------------------------
Item 4. Submission of Matters to a Vote of Security Holders............... 22
Item 6. Exhibits and Reports on Form 8-K.................................. 23
SIGNATURES................................................................... 24
</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>
June 30, 1997 December 31, 1996
------------- -----------------
(In thousands)
<S> <C> <C>
ASSETS
Cash and due from banks .................................................... $ 35,779 $ 36,730
Interest-bearing deposits in other banks ................................... 137 200
Investment securities (estimated market values of $65,250 and $74,772) ..... 65,110 74,745
Securities available for sale .............................................. 102,964 76,080
Trading securities ......................................................... 5,224 1,936
Federal funds sold and securities purchased under resell agreements ........ 48,469 46,249
Loans ...................................................................... 626,854 612,897
Unearned income ............................................................ (1,049) (1,456)
--------- ---------
Loans, net of unearned income .............................................. 625,805 611,441
Allowance for loan losses .................................................. (9,675) (9,322)
--------- ---------
Net loans .................................................................. 616,130 602,119
Property, equipment, and leasehold improvements, net ....................... 21,652 20,891
Intangible assets .......................................................... 7,142 7,308
Other assets ............................................................... 26,173 21,454
--------- ---------
Totals ..................................................................... $ 928,780 $ 887,712
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest bearing ..................................................... $ 109,618 $ 110,962
Interest bearing ........................................................ 636,543 563,719
--------- ---------
Total deposits ............................................................. 746,161 674,681
Federal funds purchased and securities sold under repurchase agreements .... 64,640 91,871
Treasury, tax and loan account ............................................. 7,054 2,968
Short-term borrowings ...................................................... 16,500 41,000
Accrued expenses and other liabilities ..................................... 14,792 10,771
Long-term debt ............................................................. 9,487 300
--------- ---------
Total liabilities .......................................................... 858,634 821,591
Common stock, $1 par, authorized 10,000,000 shares;
issued 6,525,418 and 6,515,418 shares at June 30, 1997
and December 31, 1996, respectively ..................................... 6,525 6,515
Additional paid-in capital ................................................. 48,872 48,782
Retained earnings .......................................................... 14,958 11,093
Unearned restricted stock .................................................. (139) (185)
Unrealized gain (loss) on securities available for sale, net of tax ........ (70) (84)
--------- ---------
Total stockholders' equity ................................................. 70,146 66,121
--------- ---------
Totals ..................................................................... $ 928,780 $ 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 June 30,
--------------
1997 1996
---- ----
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans .............................. $14,090 $13,185
Interest on securities .................................. 2,663 2,555
Interest on deposits in other banks ..................... 2 75
Interest on trading securities .......................... 29 45
Interest on Federal funds sold and securities purchased
under resell agreements .............................. 606 414
------- -------
Total interest income ...................................... 17,390 16,274
INTEREST EXPENSE
Interest on deposits .................................... 6,871 6,073
Interest on Federal funds purchased and securities sold
under repurchase agreements .......................... 1,022 888
Interest on long and short-term borrowings .............. 586 527
------- -------
Total interest expense ..................................... 8,479 7,488
------- -------
Net interest income ........................................ 8,911 8,786
Provision for loan losses .................................. 42 57
------- -------
Net interest income after provision for loan losses ........ 8,869 8,729
NONINTEREST INCOME:
Securities gains ........................................ -- 3
Service charges on deposit accounts ..................... 860 803
Investment services ..................................... 1,709 1,796
Trust department income ................................. 449 380
Other ................................................... 699 848
------- -------
Total noninterest income ................................... 3,717 3,830
</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 June 30,
--------------
1997 1996
---- ----
<S> <C> <C>
NONINTEREST EXPENSE:
Salaries and employee benefits ................................... 4,961 5,815
Occupancy and equipment expenses ................................. 1,036 1,046
Other ............................................................ 2,520 2,691
------ ------
Total noninterest expense ........................................... 8,517 9,552
------ ------
Income before provision for income taxes ............................ 4,069 3,007
Provision for income taxes .......................................... 1,335 1,010
------ ------
Net income .......................................................... $2,734 $1,997
====== ======
Net income per common share ......................................... $ .40 $ .30
====== ======
Weighted average common and common equivalent shares outstanding .... 6,772 6,678
====== ======
</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 six months
ended June 30,
--------------
1997 1996
---- ----
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans ...................................... $27,860 $26,171
Interest on securities .......................................... 5,099 4,925
Interest on deposits in other banks ............................. 4 188
Interest on trading securities .................................. 69 124
Interest on Federal funds sold and securities purchased
under resell agreements ...................................... 1,165 1,059
------- -------
Total interest income .............................................. 34,197 32,467
INTEREST EXPENSE
Interest on deposits ............................................ 13,566 12,500
Interest on Federal funds purchased and securities sold
under repurchase agreements .................................. 1,902 1,819
Interest on long and short-term borrowings ...................... 1,028 1,015
------- -------
Total interest expense ............................................. 16,496 15,334
------- -------
Net interest income ................................................ 17,701 17,133
Provision for loan losses .......................................... 67 209
------- -------
Net interest income after provision for loan losses ................ 17,634 16,924
NONINTEREST INCOME:
Securities gains ................................................ 4 34
Service charges on deposit accounts ............................. 1,842 1,705
Investment services ............................................. 3,663 4,141
Trust department income ......................................... 824 710
Other ........................................................... 1,430 1,389
------- -------
Total noninterest income ........................................... 7,763 7,979
</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 six months
ended June 30,
--------------
1997 1996
---- ----
<S> <C> <C>
NONINTEREST EXPENSE:
Salaries and employee benefits ......................................... 9,992 11,048
Occupancy and equipment expenses ....................................... 2,135 2,156
Other .................................................................. 5,293 4,951
------- -------
Total noninterest expense ................................................ 17,420 18,155
------- -------
Income before provision for income taxes ................................. 7,977 6,748
Provision for income taxes ............................................... 2,628 2,391
------- -------
Net income ............................................................... $ 5,349 $ 4,357
======= =======
Net income per common share .............................................. $ .79 $ .65
======= =======
Weighted average common and common equivalent shares outstanding ......... 6,761 6,684
======= =======
</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 six months
ended June 30,
--------------
1997 1996
---- ----
(In thousands)
<S> <C> <C>
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES ...................................... $ 2,573 $ 2,185
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investment securities ................................................... -- (23,384)
Proceeds from maturities of investment securities .................................... 9,622 5,279
Purchases of securities available for sale ........................................... (30,228) (23,538)
Proceeds from sale of securities available for sale .................................. -- 2,203
Proceeds from maturities of securities available for sale ............................ 3,326 35,967
Net decrease in interest bearing deposits in other banks ............................. 63 10,217
Net (increase) decrease in Federal funds sold and securities purchased
under resell agreements ........................................................... (2,220) 10,176
Net increase in loans ................................................................ (14,078) (16,326)
Purchases of property, equipment, and leasehold improvements ......................... (1,647) (1,355)
Proceeds from sale of property, equipment, and leasehold improvements ................ -- 185
Proceeds from sale of life insurance policy .......................................... -- 250
Proceeds from sale of assets ......................................................... -- 393
-------- --------
Net cash provided by (used by) investing activities .................................. (35,162) 67
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits ............................................................. 71,480 6,533
Sale of deposits ..................................................................... -- (8,500)
Decrease in Federal funds purchased and securities sold
under agreements to repurchase .................................................... (27,231) (14,375)
Net increase (decrease) in short and long-term borrowings and capital leases ......... (11,227) 11,111
Exercise of stock options ............................................................ 100 --
Dividends on common stock ............................................................ (1,484) (617)
-------- --------
Net cash provided by (used by) financing activities .................................. 31,638 (5,848)
-------- --------
Decrease in cash and cash equivalents ................................................ (951) (3,596)
Cash and cash equivalents, beginning of period ....................................... 36,730 39,202
-------- --------
Cash and cash equivalents, end of period ............................................. $ 35,779 $ 35,606
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest ............................................................... $ 16,524 $ 15,571
======== ========
Cash paid for income taxes ........................................................... $ 2,775 $ 2,437
======== ========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Acquisition of collateral in satisfaction of loans ................................... $ -- $ 70
======== ========
Adjustments to market value of other real estate owned ............................... $ -- $ 15
======== ========
Adjustment to market value of securities available for sale, net
of deferred income taxes .......................................................... $ 14 $ 553
======== ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements
8
<PAGE> 9
ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 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 six months ended June 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 fully
diluted EPS would be $.42 and $.40, respectively for the Company's 1997 quarter
ended June 30, 1997. The Company's basic and fully diluted EPS would be $.82 and
$.79, respectively for the Company's 1997 six months ended June 30, 1997.
9
<PAGE> 10
ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 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, and comparative information for interim
periods in the initial year of application must be reported in financial
statements for interim periods in the second year of application.
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 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 March 31, 1997, FIRST AMERICAN's assets totaled $231
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 its common shares and outstanding
stock options. Completion of the agreement is subject to approval of
applications filed with banking regulators and certain other conditions, and
must be approved by shareholders of the Company and FIRST AMERICAN. The merger
is expected to be accounted for as a pooling-of-interests.
On August 6, 1997, the Company announced that regulatory approval had been
received to enable the relocation and formation of Citizens and Peoples Bank,
N.A. ("C&P"), a bank subsidiary to be located in Cantonment, Florida. This will
be the first bank subsidiary of the Company located in Florida. The Company
purchased a former Cantonment branch location of Barnett Bank for C&P's banking
office and expects C&P to open in August 1997. The Company also announced, in
connection with the C&P formation, that two of its subsidiaries, First Bank of
Baldwin County and Gulf Bank, will combine operations on August 15, 1997 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 June 30, 1997, and the results of its operations for
the three and six month periods ended June 30, 1997 and 1996. 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 companies
on a combined basis from the earliest period presented, except for dividends per
share.
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 $2.73 million for the second quarter of 1997 (the
"1997 Quarter") compared to $2.00 million for the second quarter of 1996 (the
"1996 quarter"). Net income for the six month period ended June 30, 1997 (the
"1997 six months") was $5.35 million compared to $4.36 million for the six
months ended June 30, 1996 (the "1996 six months"). Net income per common share
for the 1997 and 1996 quarters was $.40 and $.30, respectively. For the 1997 six
months, net income per common share was $.79 compared to $.65 for the 1996 six
months.
During the 1996 quarter, 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 $.35 and $.70, respectively for the 1996 quarter and the 1996 six months.
The return on average assets for the Company was 1.20% for the 1997 six months
compared to 1.05% for the 1996 six months. The return on average stockholders'
equity increased for the 1997 six months to 15.68%, as compared to 14.56% for
the 1996 six months. Book value per share at June 30, 1997 was $10.75, an
increase of $1.32 from year end 1996. Tangible book value per share at June 30,
1997 was $9.66, an increase of $1.37 from year end 1996. The Company paid a $.23
cash dividend on common shares in the 1997 six months, compared to $.10 on
common shares in the 1996 six months.
11
<PAGE> 12
NET INCOME
The principal reason for the increase in net income for the 1997 quarter and the
1997 six 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 six months increased by approximately $53.8 million and
average interest-bearing liabilities increased by approximately $48.8 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 8.45% for the 1997 six
months compared to 8.57% for the 1996 six months. The average rates paid on
interest-bearing liabilities were 4.69% for the 1997 six months compared to
4.68% for the 1996 six months. The net interest margin for the 1997 six months
was 4.33% compared to 4.48% for the 1996 six months.
12
<PAGE> 13
The following table depicts, on a taxable equivalent basis for the 1997 and 1996
six 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>
SIX MONTHS ENDED JUNE 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) ....................................... $617,670 $27,931 9.04% $555,003 $26,196 9.44%
Securities:
Taxable .......................................... 137,808 4,501 6.53 142,040 4,445 6.26
Tax exempt ....................................... 20,051 906 9.20. 17,760 727 8.19
Cash balances in other banks ...................... 131 4 6.11 6,733 188 5.58
Funds sold ........................................ 39,849 1,165 5.84 38,869 1,059 5.45
Trading account securities ........................ 2,588 69 5.33 3,878 124 6.40
-------- ------- -------- -------
Total earning assets(2) ....................... 818,097 34,576 8.45 764,283 32,739 8.57
-------- ------- -------- -------
Cash and due from banks ............................. 30,480 29,268
Premises and equipment .............................. 21,495 20,612
Other assets ........................................ 30,776 22,586
Allowance for loan losses ........................... (9,502) (8,955)
-------- --------
Total assets ................................. $891,346 $827,794
======== ========
LIABILITIES:
Interest-bearing liabilities:
Interest-bearing transaction accounts ............. $ 85,303 1,149 2.69 $ 82,678 1,076 2.60
Savings deposits .................................. 182,711 3,332 3.65 201,539 3,709 3.68
Time deposits ..................................... 330,405 9,085 5.50 270,219 7,715 5.71
Funds purchased ................................... 71,594 1,902 5.31 69,403 1,819 5.24
Other short-term borrowings ....................... 31,320 958 6.12 30,138 980 6.50
Long-term debt .................................... 2,275 70 6.15 794 35 8.82
-------- ------- -------- -------
Total interest-bearing liabilities ........... 703,608 16,496 4.69 654,771 15,334 4.68
-------- ------- ---- -------- ------- ----
Demand deposits ..................................... 105,730 101,057
Accrued interest and other liabilities .............. 13,767 12,129
Stockholders' equity ................................ 68,241 59,837
-------- --------
Total liabilities and stockholders' equity ...... $891,346 $827,794
======== ========
Net interest spread ................................. 3.76% 3.89%
==== ====
Net interest income/margin on
a taxable equivalent basis ........................ 18,080 4.42% 17,405 4.55%
==== ====
Tax equivalent adjustment(2) ........................ 379 272
------- -------
Net interest income/margin .......................... $17,701 4.33% $17,133 4.48%
======= ==== ======= ====
</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 $859,000 and $772,000 are included in interest and
fees on loans for the six months ended June 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 six months
compared to the 1996 six 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>
JUNE 30,
--------------------------------
1997 COMPARED TO 1996
VARIANCE DUE TO
--------------------------------
VOLUME YIELD/RATE TOTAL
-------------------------------
<S> <C> <C> <C>
EARNING ASSETS:
Loans ...................................... $ 4,490 $(2,755) $ 1,735
Securities:
Taxable .................................. (291) 347 56
Tax exempt ............................... 99 80 179
Cash balances in other banks ............... (233) 49 (184)
Funds sold ................................. 27 79 106
Trading account securities ................. (37) (18) (55)
------- ------- -------
Total interest income ................. 4,055 (2,218) 1,837
INTEREST-BEARING LIABILITIES:
Interest-bearing transaction accounts ...... 35 38 73
Savings and money market deposits .......... (347) (30) (377)
Time deposits .............................. 2,149 (779) 1,370
Funds purchased ............................ 58 25 83
Other short-term borrowings ................ 83 (105) (22)
Long-term debt ............................. 66 (31) 35
------- ------- -------
Total interest expense ................ 2,044 (882) 1,162
------- ------- -------
Net interest income on a taxable
equivalent basis .................... $ 2,011 $(1,336) 675
======= =======
Taxable equivalent adjustment .............. (107)
-------
Net interest income ........................ $ 568
=======
</TABLE>
14
<PAGE> 15
Net revenue from earning assets during the 1997 six months increased $568,000 or
3.2%, 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 $42,000 for
the 1997 quarter, compared with $57,000 in the 1996 quarter. The provision for
loan losses was $67,000 for the 1997 six months, compared to $209,000 in the
1996 six months. Recoveries exceeded charge-offs by $286,000 for the 1997 six
months. The allowance for loan losses as a percentage of outstanding loans, net
of unearned income, was 1.55% at June 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 $3.7 million, compared to $3.8
million for the 1996 quarter. For the 1997 six months, noninterest income
decreased to $7.8 million, compared to $8.0 million for the 1996 six months.
Service charges on deposits for the 1997 quarter were $860,000, compared with
$803,000 for the 1996 quarter. For the 1997 six months, service charges were
$1.8 million, compared with $1.7 million for the 1996 six months. Reflecting
less demand for fixed rate bonds, revenue in the investment services division
totaled $1.7 million in the 1997 quarter and $1.8 million the 1996 quarter, and
totaled $3.7 million in the 1997 six months, compared to $4.1 million in the
1996 six months. Trust fees increased $69,000 in the 1997 quarter compared to
the 1996 quarter and increased $114,000 for the 1997 six months, when compared
with the 1996 six months. Other noninterest income decreased $149,000 in the
1997 quarter when compared to the 1996 quarter and increased $41,000 for the
1997 six months when compared with the 1996 six months. Both the 1996 quarter
and 1996 six 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 contact basis for an independent insurance company totaling $455,000 in the
1997 six months, compared to $186,000 during the 1996 six months. The
contractual arrangement with this company terminated effective June 30, 1997.
Noninterest expense was $8.5 million for the 1997 quarter, compared to $9.6
million for the 1996 quarter. For the 1997 six months, noninterest expense was
$17.4 million, compared to $18.2 million for the 1996 six months. Salaries and
employee benefits were $5.0 million for the 1997 quarter, compared to $5.8
million for the 1996 quarter. For the 1997 six months, salaries and employee
benefits were $10.0 million compared to $11.0 million in the 1996 six months.
The decrease in salaries and employee benefits is attributable to non-operating
charges in the 1996 quarter and six months totaling $947,000 relating to the
termination of employment contracts with former executives of the Company.
Occupancy and equipment expense totaled $1.0 million in the 1997 quarter and the
1996 quarter. For both the 1997 six months and 1996 six months, occupancy and
equipment expenses totaled $2.1 million. Other noninterest expense decreased to
$2.5 million in the 1997 quarter, compared with $2.7 million in the 1996
quarter. Other noninterest expense was $5.3 million in the 1997 six months and
$5.0 million in the 1996 six months.
Income tax expense was $1.3 million for the 1997 quarter compared to $1.0 for
the 1996 quarter, reflecting higher taxable income. For the 1997 six months,
income tax expense was $2.6 million, compared to $2.4 million for the 1996 six
months, which also reflects higher taxable income. The effective tax rates for
the 1997 quarter and the 1997 six months were 32.8% and 32.9%, respectively.
15
<PAGE> 16
EARNING ASSETS
Loans comprised the largest single category of the Company's earning assets on
June 30, 1997. Loans, net of unearned income, were $625.8 million or 67.4% of
total assets at June 30, 1997, compared to $611.4 million or 68.9% at December
31, 1996. Loans grew $14.4 million, or 2.3%, during the 1997 six months.
Investment securities decreased $9.6 million in the 1997 six months,
substantially all of which is attributable to paydowns of mortgage backed
securities.
Securities available for sale increased $26.9 million in the 1997 six months.
Purchases of available for sale securities totaled $30.2 million and maturities
and calls of available for sale securities totaled $3.3 million. Write up to
estimated market value of available for sale securities totaled $18,000 during
the 1997 six months.
Trading account securities, $5.2 million at June 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 $48.5 million at June 30, 1997 compared to
$46.2 at December 31, 1996.
DEPOSITS AND OTHER FUNDING SOURCES
Deposits increased $71.5 million from year-end 1996, to $746.2 million at June
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 $64.6 million at June 30, 1997, a decrease of $27.2 million from
December 31, 1996. The Treasury tax and loan account increased to $7.1 million
at June 30, 1997, compared with $3.0 million at December 31, 1996. Short-term
borrowings at June 30, 1997 totaled $16.5 million consisting of borrowings by
the Company from an independent bank.
The Company's long-term debt at June 30, 1997 consists of notes payable to the
Federal Home Loan Bank totaling $9.2 million, which mature on May 23, 1999, and
obligations under capital leases totaling $287,000.
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 June 30, 1997, nonperforming assets totaled $3.5 million, an increase of $1.3
million from December 31, 1996. Nonperforming assets as a percentage of loans
plus other real estate was 56% at June 30, 1997 compared to 36% at December
31,1996.
16
<PAGE> 17
NONPERFORMING ASSETS
(AMOUNTS IN THOUSANDS, EXCEPT PERCENTAGES)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
--------- ------------
<S> <C> <C>
Nonaccrual loans ..................................................... $ 2,435 $ 1,111
Restructured loans ................................................... 449 605
Loans past due 90 days or more and still accruing .................... -- --
--------- ---------
Total nonperforming loans ......................................... 2,884 1,716
Other real estate owned .............................................. 627 468
--------- ---------
Total nonperforming assets ........................................ $ 3,511 $ 2,184
========= =========
Allowance for loan losses to period-end loans ........................ 1.55% 1.52%
Allowance for loan losses to period-end
nonperforming loans ............................................... 335.47 543.24
Allowance for loan losses to period-end
nonperforming assets .............................................. 275.56 426.83
Net recoveries to average loans ...................................... (0.09) (0.03)
Nonperforming assets to period-end loans
and other real estate owned ....................................... 0.56(1) 0.36
Nonperforming loans to period-end loans .............................. 0.46 0.28
</TABLE>
- --------------------
(1) Annualized
17
<PAGE> 18
Net loan recoveries for the 1997 six months totaled $286,000, or 09%
(annualized) of average loans for the period. The allowance for loan losses as a
percentage of total loans, net of unearned income, was 1.55% at June 30, 1997
compared to 1.52% at December 31, 1996. The following table analyzes activity in
the allowance for loan losses for the 1997 six months.
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(AMOUNTS IN THOUSANDS, EXCEPT PERCENTAGES)
<TABLE>
<CAPTION>
<S> <C>
Allowance for loan losses at
beginning of period ...................................... $ 9,322
Charge-offs:
Commercial, financial and agricultural ................... 111
Real estate - mortgage ................................... 76
Consumer ................................................. 282
-------
Total charge-offs ................................... 469
-------
Recoveries:
Commercial, financial and agricultural ................... 464
Real estate - mortgage ................................... 141
Consumer ................................................. 150
-------
Total recoveries .................................... 755
-------
Net charge-offs (recoveries) ........................ (286)
Provision for (benefit of) loan losses ........................ 67
-------
Allowance for loan losses at
period-end ............................................... $ 9,675
=======
</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 June 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 June
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>
JUNE 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) .................................. $301,850 $ 45,744 $ 92,630 $ 440,224 $183,146 $623,370
Securities(2) ............................. 8,046 13,343 12,819 34,208 135,209 169,417
Interest-bearing deposits in
other banks ............................. 137 -- -- 137 -- 137
Funds sold ................................ 48,469 -- -- 48,469 -- 48,469
-------- -------- --------- --------- -------- --------
Total interest-earning assets ........ $358,502 $ 59,087 $ 105,449 $ 523,038 $318,355 $841,393
LIABILITIES:
Interest-bearing liabilities:
Interest-bearing deposits:
Demand deposits ....................... $ -- $ -- $ 88,476 $ 88,476 $ -- $ 88,476
Savings deposits ...................... 162,613 -- -- 162,613 54,204 216,817
Time deposits(3) ...................... 45,102 64,666 163,828 273,596 57,654 331,250
Funds purchased .......................... 64,640 -- -- 64,640 -- 64,640
Short-term borrowings(4) ................. 23,554 -- -- 23,554 -- 23,554
Long-term debt ........................... 2 9,204 18 9,224 263 9,487
-------- -------- --------- --------- -------- --------
Total interest-bearing liabilities .... $295,911 $ 73,870 $ 252,322 $ 622,103 $112,121 $734,224
-------- -------- --------- --------- -------- --------
Period gap ................................... $ 62,591 $(14,783) $(146,873) $ (99,065) $206,234
======== ======== ========= ========= ========
Cumulative gap ............................... $ 62,591 $ 47,808 $ (99,065) $ (99,065) $107,169 $107,169
======== ======== ========= ========= ======== ========
Ratio of cumulative gap to total
earning assets ........................... 7.44% 5.68% (11.77)% (11.77)% 12.74%
</TABLE>
- --------------------
(1) Excludes nonaccrual loans of $2,435,000.
(2) Excludes investment equity securities of $3,881,000.
(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 $7,054,000.
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 82.6% at June 30, 1997, compared to
89.2% at year end 1996. The Company's liquid assets as a percentage of total
deposits were 12.0% at June 30, 1997, compared to 12.6% at year-end 1996. At
June 30, 1997, the Company had unused federal funds lines of approximately
$64.5 million, unused lines at the Federal Home Loan Bank of $47.2 million and
an unused credit line at an independent bank of $3.5 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 $4.0 million from December 31,
1996 to $70.1 million at June 30, 1997. This increase was attributable to:
<TABLE>
<S> <C>
Net income .............................................................. $ 5,349,000
Exercise of stock options ............................................... 100,000
Decrease in unrealized losses on securities available for sale, net
of deferred income tax benefits ....................................... 14,000
Cash dividends declared ................................................. (1,484,000)
Decrease in unearned restricted stock ................................... 46,000
-----------
Net increase .......................................................... $ 4,025,000
===========
</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 June 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 June
30, 1997:
20
<PAGE> 21
<TABLE>
<CAPTION>
TIER 1 RISK TOTAL RISK TIER 1
BASED BASED LEVERAGE
----- ----- --------
<S> <C> <C> <C>
Alabama National BanCorporation ................ 9.50% 10.75% 7.23%
National Bank of Commerce of Birmingham ........ 9.97 11.22 7.61
Alabama Exchange Bank .......................... 14.09 15.25 9.17
Bank of Dadeville .............................. 12.53 13.64 8.92
Citizens Bank of Talladega ..................... 16.62 17.87 9.69
First Bank of Baldwin County ................... 14.34 15.59 9.48
First National Bank of Ashland ................. 12.61 13.56 7.68
Gulf Bank ...................................... 10.67 11.71 8.67
Required minimums .............................. 4.00 8.00 4.00
</TABLE>
21
<PAGE> 22
Part II Other Information
Item 4 - Submission of Matters to a Vote of Security-Holders
The Company held its Annual Meeting of Stockholders on April 24, 1997. At the
meeting, the stockholders of the Company were asked to vote on the election of
11 directors to serve until the next annual meeting of stockholders and their
successors are elected and qualified. The results of the voting are summarized
as follows:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ----------------- -------------
<S> <C> <C> <C>
T. Morris Hackney................................ 5,091,743 63,883 0
John H. Holcomb, III............................. 5,092,243 63,383 0
John D. Johns.................................... 5,007,239 148,387 0
C. Phillip McWane................................ 5,092,143 63,483 0
John J. McMahon, Jr.............................. 5,092,243 63,383 0
William D. Montgomery............................ 5,092,243 63,383 0
Drayton Nabers, Jr............................... 5,092,143 63,483 0
Victor E. Nichol, Jr............................. 5,092,243 63,383 0
Ronald W. Orso, M.D.............................. 5,092,243 63,383 0
G. Ruffner Page, Jr.............................. 5,092,243 63,383 0
W. Stancil Starnes............................... 5,092,243 63,383 0
</TABLE>
22
<PAGE> 23
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 11 - Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedules (for SEC use only)
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the three
months ended June 30, 1997.
23
<PAGE> 24
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: AUGUST 11, 1997 /s/John H. Holcomb, III
--------------- -----------------------
John H. Holcomb, III, its Chairman and Chief Executive
Officer
DATE: AUGUST 11, 1997 /s/James S. Parks, Jr.
--------------- ----------------------
James S. Parks, Jr., its Senior Vice President - Finance,
Controller and Treasurer (principal financial and
accounting officer)
24
<PAGE> 1
ALABAMA NATIONAL BANCORPORATION
COMPUTATION OF EARNINGS PER SHARE (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
EXHIBIT 11
<TABLE>
<CAPTION>
Six Months Ended June 30, 1997
------------------------------
Primary Fully Diluted
------- -------------
<S> <C> <C>
Net income ....................................... $5,349 $5,349
====== ======
Average shares outstanding ....................... 6,521 6,521
Effect of stock options .......................... 226 251
Effect of Performance Share and
Deferred Compensation Plans .................... 14 22
------ ------
Applicable shares outstanding .................... 6,761 6,794
====== ======
Earnings per share ............................... $ 0.79 $ 0.79
====== ======
</TABLE>
25
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 35,110
<INT-BEARING-DEPOSITS> 137
<FED-FUNDS-SOLD> 48,469
<TRADING-ASSETS> 5,224
<INVESTMENTS-HELD-FOR-SALE> 102,964
<INVESTMENTS-CARRYING> 65,110
<INVESTMENTS-MARKET> 65,250
<LOANS> 625,805
<ALLOWANCE> 9,675
<TOTAL-ASSETS> 928,780
<DEPOSITS> 746,161
<SHORT-TERM> 88,194
<LIABILITIES-OTHER> 14,792
<LONG-TERM> 9,487
0
0
<COMMON> 6,525
<OTHER-SE> 63,621
<TOTAL-LIABILITIES-AND-EQUITY> 928,780
<INTEREST-LOAN> 27,860
<INTEREST-INVEST> 5,099
<INTEREST-OTHER> 1,238
<INTEREST-TOTAL> 34,197
<INTEREST-DEPOSIT> 13,566
<INTEREST-EXPENSE> 16,496
<INTEREST-INCOME-NET> 17,701
<LOAN-LOSSES> 67
<SECURITIES-GAINS> 4
<EXPENSE-OTHER> 17,420
<INCOME-PRETAX> 7,977
<INCOME-PRE-EXTRAORDINARY> 7,977
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,349
<EPS-PRIMARY> .79
<EPS-DILUTED> .79
<YIELD-ACTUAL> 4.33
<LOANS-NON> 2,435
<LOANS-PAST> 0
<LOANS-TROUBLED> 449
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 9,322
<CHARGE-OFFS> 469
<RECOVERIES> 755
<ALLOWANCE-CLOSE> 9,675
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 9,675
</TABLE>
