<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 28, 1997
U.S. TRUST CORPORATION
(Exact name of registrant as specified in its charter)
Commission file number: 0-20469
New York 13-3818952
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
114 West 47th Street, New York, New York 10036
(Address of principal executive offices) (Zip Code)
(212) 852-1000
(Registrant's telephone number, including area code)
Page 1 of 2
<PAGE> 2
ITEM 5. OTHER EVENTS
On January 16, 1997, U.S. Trust Corporation released fourth quarter and
year end 1996 financial results. A copy of the news release is attached hereto
as Exhibit 99 and is incorporated herein by reference.
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, hereunto duly authorized.
U. S. Trust Corporation
-----------------------
(Registrant)
Date: January 28, 1997 By: Richard E. Brinkmann
--------------------------------
Richard E. Brinkmann
Comptroller and
Chief Planning Officer
(Principal Accounting Officer)
2
<PAGE> 3
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
99 U.S. Trust Corporation fourth quarter and year end 1996
earnings release.
<PAGE> 1
Exhibit 99
CONTACT: Allison Cooke Kellogg
(212) 852-1127
U.S. TRUST
FOR RELEASE: IMMEDIATE
EARNINGS SUMMARY
U.S. Trust Corporation (USTC)
QUARTER ENDED DEC. 31: 1996 1995
---- ----
Net Income $ 11,241,000 $ 9,146,000
Net Income per Share $ 1.05 $ 0.89
YEAR ENDED DEC. 31:(a)
Net Income (Loss) $ 40,904,000 ($ 50,521,000)
Net Income (Loss) per Share $ 3.83 ($ 5.24)
(a) The year ended Dec. 31, 1995, reflects charges incurred in connection with
the sale of the corporation's securities processing businesses on Sept. 1, 1995.
Total restructuring charges in 1995 were $155.6 million ($86.9 million after
taxes or $9.05 per average share).
<PAGE> 2
CONTACT: Allison Cooke Kellogg
(212) 852-1127
U.S. TRUST
FOR RELEASE: IMMEDIATE
U.S. TRUST REPORTS FOURTH QUARTER AND YEAR-END 1996 RESULTS
New York, N.Y., Jan. 16, 1997 -- U.S. Trust Corporation today reported net
income of $11.2 million for the fourth quarter ended Dec. 31, 1996, a 22.9%
increase over the $9.1 million earned in the fourth quarter of 1995. On a per
share basis, earnings for the quarter increased 18.0% to $1.05, compared to
$0.89 in the fourth quarter of 1995. The corporation's return on average
stockholders' equity was 21.5% for the fourth quarter of 1996, compared to 20.5%
for the fourth quarter of 1995.
"We are very pleased with our performance in 1996 - the first full year
following our restructuring as a focused investment management company with
fiduciary and banking powers," said H. Marshall Schwarz, chairman and chief
executive officer of U.S. Trust. "In particular, fourth-quarter 1995 to
fourth-quarter 1996 comparisons - the first comparable quarterly results since
the restructuring - show the earning power of our company. The prospects for the
continued growth of our business are bright."
Total fee revenue for the fourth quarter of 1996 was $63.6 million, up 12.4%
from $56.6 million in the fourth quarter of 1995. Market-related fees earned
from assets under management were $49.5 million, a 14.6% increase over the $43.2
million earned in the fourth quarter of 1995. Market-related fee revenue is
based primarily on the prior quarter's asset values.
-MORE-
<PAGE> 3
Assets under management, excluding special fiduciary assets, were $38.0 billion
at Dec. 31, 1996, compared to $35.4 billion at Sept. 30, 1996, and $33.5 billion
at Dec. 31, 1995. Total assets under management were $53.3 billion at Dec. 31,
1996, versus $50.1 billion at Sept. 30, 1996, and $47.4 billion at Dec. 31,
1995.
Net interest revenue after the provision for credit losses was $20.2 million in
the fourth quarter of 1996, an increase of 16.6% over the $17.3 million earned
for the fourth quarter of 1995. This increase is primarily due to a higher
percentage of total average interest earning assets being invested in
longer-term financial instruments, including mortgage loans and mortgage
investment securities.
Average loans increased $251.7 million, or 18.5%, to $1.6 billion in the fourth
quarter of 1996, from $1.4 billion in the fourth quarter of 1995. Nonperforming
assets decreased 58.0% to $9.6 million at Dec. 31, 1996, from $22.9 million at
Dec. 31, 1995. Nonperforming assets as a percentage of average loans and real
estate owned were 0.60% for the fourth quarter of 1996, versus 1.67% for the
fourth quarter of 1995. This decline is primarily due to the sale, in the fourth
quarter of 1996, of approximately $6.8 million of real estate acquired through
foreclosure none of which related to the corporation's private banking loan
portfolio.
In the fourth quarter of 1996, net loan charge-offs as a percentage of average
loans, on an annualized basis were one basis point, compared to 34 basis points
for the fourth quarter of 1995.
-MORE-
<PAGE> 4
Operating expenses for the fourth quarter of 1996 were $65.8 million, compared
to $57.9 million in the fourth quarter of 1995, an increase of 13.6%. Higher
incentive compensation, based on the corporation's strong financial performance,
and increases in net occupancy costs attributable to new affiliate offices and
increases on certain leases were the principal reasons for the rise in operating
expenses. The corporation's pre-tax margin was 21.9% for the fourth quarter of
1996 versus 21.7% for the fourth quarter of 1995.
The effective tax rate for the fourth quarter of 1996 was 39.0%, compared to
43.0% for the fourth quarter of 1995. The decline in the effective tax rate is
due to a decrease in state and local income taxes, resulting from the geographic
distribution of the corporation's businesses.
During the quarter ended Dec. 31, 1996, 62,000 shares of common stock were
acquired under the corporation's share repurchase program at an average price of
$76.26 per share. Under its common stock repurchase program, the corporation has
remaining authority to repurchase up to an additional 438,000 shares of common
stock.
YEAR-END RESULTS
For the year ended Dec. 31, 1996, net income was $40.9 million, or $3.83 per
share, versus a net loss of $50.5 million, or $5.24 per share for the year ended
Dec. 31, 1995. The 1995 results reflect the sale of the corporation's securities
processing businesses on Sept. 1, 1995, and $155.6 million ($86.9 million after
taxes or $9.05 per share) of restructuring expenses related to the sale of those
businesses. The corporation's return on average stockholders' equity was 21.0%
for the year ended Dec. 31, 1996.
-MORE-
<PAGE> 5
Total fee revenue from the investment management, private banking, special
fiduciary and corporate trust businesses for the year ended Dec. 31, 1996,
amounted to $244.2 million, up 13.4% from the $215.3 million generated by these
businesses in 1995. Market-related fees earned from assets under management were
$188.6 million, a 17.9% increase over the $160.0 million earned in 1995.
Net interest revenue after the provision for credit losses totaled $77.9 million
for the year ended Dec. 31, 1996, compared to $96.9 million for 1995. Operating
expenses in 1996 were $253.5 million versus $322.6 million (excluding $155.6
million of restructuring charges) for 1995. The corporation's pre-tax margin for
the year ended Dec. 31, 1996, was 21.5%.
Average loans increased $156.6 million, or 11.6%, to $1.5 billion in the year
ended Dec. 31, 1996, from $1.4 billion in the year ended Dec. 31, 1995.
Nonperforming assets as a percentage of average loans and real estate owned were
0.64% for the year ended Dec. 31, 1996, versus 1.68% for the year ended Dec. 31,
1995. In the year ended Dec. 31, 1996, net loan charge-offs as a percentage of
average loans were three basis points, compared to two basis points for the year
ended Dec. 31, 1995.
U.S. Trust is an investment management company that also provides fiduciary and
private banking services. Headquartered in New York City, U.S. Trust has over
$53 billion in assets under management and serves affluent individuals, families
and institutions nationwide through its offices in California, Connecticut,
Florida, New Jersey, Oregon, Texas and Washington, D.C.
###
<PAGE> 6
U.S. TRUST CORPORATION
CONSOLIDATED FINANCIAL RATIOS (1)
(UNAUDITED)
<TABLE>
<CAPTION>
FOURTH QUARTER YEAR TO DATE
----------------------- ---------------------
1996 1995 1996 1995
------- ------- ------ --------
<S> <C> <C> <C> <C>
PROFITABILITY
Assets Under Management (in billions)
Investment Management $ 38.0 $ 33.5 -- --
Special Fiduciary Investment Management 15.3 13.9 -- --
Return on Stockholders' Equity 21.50% 20.45% 20.99% (23.10)%
Return on Average Assets 1.41 1.44 1.42 (1.52)
CAPITAL
As a Percentage of Risk Adjusted
Total Assets (Period End):
Tier 1 Capital 11.53% 9.23% --% --%
Total Capital 12.61 10.40 -- --
Tier 1 Leverage 5.68 5.21 -- --
Dividends Per Share as a Percentage of
Fully Diluted Net Income Per Share (2) 23.81 84.27 26.11 (23.85)
Double Leverage 118.09 129.85 -- --
Book Value Per Share $ 21.95 $ 18.67 -- --
ASSET QUALITY
Allowance for Credit Losses as a Percentage of:
Average Loans 1.03% 1.18% 1.10% 1.19%
Nonperforming Loans 187.94 121.08 -- --
Nonperforming Assets as a Percentage of:
Average Loans and Real Estate Owned 0.60 1.67 0.64 1.68
Period-End Total Assets 0.28 0.89 -- --
Net Charge Offs as a Percentage of
Average Loans 0.01 0.34 0.03 0.02
</TABLE>
(1) Financial ratios have been calculated on an annualized basis where
applicable.
(2) During the fourth quarter of 1996 the Board of Directors declared a
quarterly dividend of $0.25 per share payable on January 24, 1997. During
the fourth quarter of 1995 the Board of Directors declared three dividends
of $0.25 per share each.
<PAGE> 7
U.S. TRUST CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CONDITION
DECEMBER 31
(Dollars In Thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS 1996 1995
---------- ----------
<S> <C> <C>
Cash and Due from Banks $ 78,566 $ 96,785
Interest Earning Securities 1,451,869 764,900
Loans 1,688,141 1,459,695
Less: Allowance for Credit Losses 16,693 16,086
---------- ----------
Net Loans 1,671,448 1,443,609
Other Assets 275,435 267,925
---------- ----------
Total Assets $3,477,318 $2,573,219
========== ==========
LIABILITIES
Deposits:
Non-Interest Bearing $ 687,942 $ 489,827
Interest Bearing 2,075,847 1,503,430
---------- ----------
Total Deposits 2,763,789 1,993,257
Short-Term Credit Facilities 240,283 134,815
Accounts Payable and Accrued Liabilities 232,680 233,870
Long-Term Debt 26,468 29,434
---------- ----------
Total Liabilities 3,263,220 2,391,376
---------- ----------
STOCKHOLDERS' EQUITY
Common Stock, $1.00 Par Value; 40,000,000 Shares
Authorized; 9,814,781 Shares Issued in 1996
and 9,739,144 Shares Issued in 1995 9,815 9,739
Capital Surplus 3,700 125
Retained Earnings 215,074 183,804
Treasury Stock at Cost (62,000 Shares in 1996) (4,728) --
Loan to ESOP (10,468) (13,434)
Unrealized Gain, Net of Taxes, on Securities
Available for Sale 705 1,609
---------- ----------
Total Stockholders' Equity 214,098 181,843
---------- ----------
Total Liabilities and Stockholders' Equity $3,477,318 $2,573,219
========== ==========
</TABLE>
<PAGE> 8
U.S. TRUST CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In Thousands, Except Per Share Amounts)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED DECEMBER 31,
-------------------------------------------
BETTER (WORSE)
------------------
1996 1995 $ %
---- ---- --- ---
<S> <C> <C> <C> <C>
Fee Revenue $ 63,596 $ 56,587 $ 7,009 12.4 %
Net Interest Revenue (1) 20,179 17,307 2,872 16.6
Securities Gains, Net 432 34 398 --
--------- -------- -------- ------
TOTAL REVENUE 84,207 73,928 10,279 13.9
--------- -------- -------- ------
OPERATING EXPENSES
Salaries 24,098 22,082 (2,016) (9.1)
Employee Benefits and Performance
Compensation 14,126 12,642 (1,484) (11.7)
--------- -------- -------- ------
Total Salaries and Benefits 38,224 34,724 (3,500) (10.1)
Net Occupancy 8,907 7,445 (1,462) (19.6)
Other 18,648 15,713 (2,935) (18.7)
--------- -------- -------- ------
TOTAL OPERATING EXPENSES 65,779 57,882 (7,897) (13.6)
--------- -------- -------- ------
Income Before Income Tax Expense 18,428 16,046 2,382 14.8
Income Tax Expense 7,187 6,900 (287) (4.2)
--------- -------- -------- ------
NET INCOME $ 11,241 $ 9,146 $ 2,095 22.9 %
========= ======== ======== ======
NET INCOME PER SHARE $ 1.05 $ 0.89 $ 0.16 18.0 %
========= ======== ======== ======
</TABLE>
(1) Net Interest Revenue consists of interest income less interest expense and
the provision for credit losses.
<PAGE> 9
U.S. TRUST CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In Thousands, Except Per Share Amounts)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE TWELVE MONTHS ENDED DECEMBER 31,
----------------------------------------------
BETTER (WORSE)
--------------------
1996 1995 $ %
--------- --------- -------- ------
<S> <C> <C> <C> <C>
Fee Revenue
Core $ 244,211 $ 215,273 $ 28,938 13.4 %
Processing -- 66,153 (66,153) --
--------- --------- -------- ------
244,211 281,426 (37,215) (13.2)
Net Interest Revenue (1) 77,870 96,876 (19,006) (19.6)
Other Income -- 2,284 (2,284) --
Securities Gains, Net 642 4,222 (3,580) (84.8)
--------- --------- -------- ------
TOTAL REVENUE 322,723 384,808 (62,085) (16.1)
--------- --------- -------- ------
OPERATING EXPENSES
Salaries 92,728 123,216 30,488 24.7
Employee Benefits and Performance
Compensation 54,550 67,965 13,415 19.7
--------- --------- -------- ------
Total Salaries and Benefits 147,278 191,181 43,903 23.0
Net Occupancy 34,214 38,248 4,034 10.5
Other 71,958 93,202 21,244 22.8
Restructuring -- 155,589 155,589 --
--------- --------- -------- ------
TOTAL OPERATING EXPENSES 253,450 478,220 224,770 47.0
--------- --------- -------- ------
Income (Loss) Before Income Tax Expense 69,273 (93,412) 162,685 --
Income Tax Expense (Benefit) 28,369 (42,891) (71,260) --
--------- --------- -------- ------
NET INCOME (LOSS) $ 40,904 $ (50,521) $ 91,425 -- %
========= ========= ======== ======
NET INCOME (LOSS) PER SHARE $ 3.83 $ (5.24) $ 9.07 -- %
========= ========= ======== ======
</TABLE>
(1) Net Interest Revenue consists of interest income less interest expense and
the provision for credit losses.
<PAGE> 10
U.S. TRUST CORPORATION
ASSETS UNDER MANAGEMENT AND ADMINISTRATION
(In Billions)
(UNAUDITED)
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------------------------------------------------
1996 1995 1994 1993 1992 1991
-------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
ASSETS UNDER MANAGEMENT
Investment Management $ 38.0 $ 33.5 $ 26.0 $ 26.5 $ 21.1 $ 20.3
Special Fiduciary Investment Management 15.3 13.9 5.1 3.8 3.7 *
-------- ------- ------- ------- ------- --------
TOTAL ASSETS UNDER MANAGEMENT ** 53.3 47.4 31.1 30.3 24.8 20.3
-------- ------- ------- ------- ------- --------
ASSETS UNDER ADMINISTRATION
Personal Custody and Other Assets Under Administration 15.7 13.3 8.2 7.9 6.0 6.8
Corporate and Municipal Trusteeships and Agency
Relationships (Par Value)*** 216.6 190.5 159.6 152.2 134.6 121.5
-------- ------- ------- ------- ------- --------
TOTAL ASSETS UNDER ADMINISTRATION ** 232.3 203.8 167.8 160.1 140.6 128.3
-------- ------- ------- ------- ------- --------
TOTAL ASSETS UNDER MANAGEMENT AND
ADMINISTRATION $ 285.6 $ 251.2 $ 198.9 $ 190.4 $ 165.4 $ 148.6
======== ======= ======= ======= ======= ========
</TABLE>
* Information not available.
** Assets under management exclude $1.9 billion, $1.9 billion, $1.7 billion,
and $1.6 billion of the Securities Processing Business at December 31, 1994,
1993, 1992, and 1991, respectively.
Assets under administration exclude $223.4 billion, $200.9 billion, $184.7
billion, and $166.1 billion of the Securities Processing Business at
December 31, 1994, 1993, 1992, and 1991, respectively.
*** Includes corporate trust and agency and bond immobilization assets measured
at par value.
<PAGE> 11
U.S. TRUST CORPORATION
CONDENSED CONSOLIDATED NET INTEREST REVENUE AND AVERAGE BALANCES
(Dollars in Thousands; Interest and Average Rates on a Taxable Equivalent Basis)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED DECEMBER 31,
--------------------------------------------------------------------
1996 1995
------------------------------ -------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE
------- -------- ---- ------- -------- ----
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest Earning Securities (1) (2) $1,201,930 $18,350 6.07 % $ 784,049 $11,918 6.03 %
Loans (3) 1,623,477 31,239 7.65 1,374,716 27,258 7.87
---------- ------- ---- ----------- ------- ----
Total Interest Earning Assets 2,825,407 49,589 7.00 2,158,765 39,176 7.21
---------- ------- ---- ----------- ------- ----
Allowance for Credit Losses (16,603) (17,065)
Cash and Due from Banks 65,220 87,262
Other Assets 315,978 301,662
---------- -----------
Total Assets $3,190,002 $ 2,530,624
========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Interest Bearing Deposits $1,916,386 23,302 4.84 $ 1,488,663 18,541 4.94
Short-Term Credit Facilities 331,763 4,520 5.42 111,941 1,773 6.28
Long-Term Debt 26,468 480 7.24 26,064 487 7.47
---------- ------- ---- ----------- ------- ----
Total Sources on Which
Interest is Paid 2,274,617 28,302 4.95 1,626,668 20,801 5.07
---------- ------- ---- ----------- ------- ----
Total Non-Interest Bearing
Deposits 446,726 473,218
Other Liabilities 250,228 239,900
Stockholders' Equity (3) 218,431 190,838
---------- -----------
Total Liabilities and
Stockholders' Equity $3,190,002 $ 2,530,624
========== ===========
Net Interest Revenue -
Tax Equivalent Basis 21,287 18,375
Credit Loss Provision (250) (400)
Tax Equivalent Adjustment (858) (668)
------- -------
Net Interest Revenue $20,179 $17,307
======= =======
Net Yield on Interest
Earning Assets 3.01 % 3.39 %
==== ====
Interest Spread 2.05 % 2.14 %
==== ====
</TABLE>
(1) The average balance and average rate for securities available for sale have
been calculated using their amortized cost.
(2) Yields on obligations of states and political subdivisions are stated on a
fully taxable basis, employing the statutory federal tax rate adjusted for
the effect of state and local taxes, resulting in an effective tax rate of
47%. The amounts of the tax equivalent adjustments to net interest revenue
are related to securities.
(3) Loans and Stockholders' Equity have been increased to include the Loan to
ESOP, which had an average balance of $10.5 million in 1996 and $13.4
million in 1995.
<PAGE> 12
U.S. TRUST CORPORATION
CONDENSED CONSOLIDATED NET INTEREST REVENUE AND AVERAGE BALANCES
(Dollars in Thousands; Interest and Average Rates on a Taxable Equivalent Basis)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE TWELVE MONTHS ENDED DECEMBER 31,
-----------------------------------------------------------------
1996 1995
----------------------------- -------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE
------- -------- ---- ------- -------- ----
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest Earning Securities (1) (2) $1,007,974 $ 60,291 5.98 % $1,349,416 $ 82,896 6.14 %
Loans (3) 1,522,246 117,459 7.72 1,368,641 109,094 7.97
---------- -------- ---- ---------- ---------- ----
Total Interest Earning Assets 2,530,220 177,750 7.03 2,718,057 191,990 7.06
---------- -------- ---- ---------- ---------- ----
Allowance for Credit Losses (16,400) (16,174)
Cash and Due from Banks 75,369 223,860
Other Assets 305,716 401,697
---------- ----------
Total Assets $2,894,905 $3,327,440
========== ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Interest Bearing Deposits $1,736,970 82,551 4.75 $1,491,412 75,268 5.05
Short-Term Credit Facilities 213,180 11,374 5.34 193,088 11,308 5.86
Long-Term Debt 26,719 1,936 7.25 46,653 3,763 8.07
---------- -------- ---- ---------- ---------- ----
Total Sources on Which
Interest is Paid 1,976,869 95,861 4.85 1,731,153 90,339 5.22
---------- -------- ---- ---------- ---------- ----
Total Non-Interest Bearing
Deposits 474,146 1,186,473
Other Liabilities 238,291 177,452
Stockholders' Equity (3) 205,599 232,362
---------- ----------
Total Liabilities and
Stockholders' Equity $2,894,905 $3,327,440
========== ==========
Net Interest Revenue -
Tax Equivalent Basis 81,889 101,651
Credit Loss Provision (1,000) (1,600)
Tax Equivalent Adjustment (3,019) (3,175)
-------- ----------
Net Interest Revenue $ 77,870 $ 96,876
======== =========
Net Yield on Interest
Earning Assets 3.24 % 3.74 %
==== ====
Interest Spread 2.18 % 1.84 %
==== ====
</TABLE>
(1) The average balance and average rate for securities available for sale have
been calculated using their amortized cost.
(2) Yields on obligations of states and political subdivisions are stated on a
fully taxable basis, employing the statutory federal tax rate adjusted for
the effect of state and local taxes, resulting in an effective tax rate of
47%. The amounts of the tax equivalent adjustments to net interest revenue
are related to securities.
(3) Loans and Stockholders' Equity have been increased to include the Loan to
ESOP, which had an average balance of $10.7 million in 1996 and $13.7
million in 1995.
<PAGE> 13
U.S. TRUST CORPORATION
CONSOLIDATED STATEMENT OF LOANS AND ASSET QUALITY DATA
(In Thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
FOURTH QUARTER YEAR TO DATE
-------------------------- -----------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
ALLOWANCE FOR CREDIT LOSSES
Balance, Beginning of Period $ 16,498 $ 16,862 $ 16,086 $ 14,699
----------- ----------- ----------- -------------
Provision Charged to Income 250 400 1,000 1,600
----------- ----------- ----------- -------------
Recoveries 107 307 782 3,217
Charge-Offs (162) (1,483) (1,175) (3,430)
----------- ----------- ----------- -------------
Net (Charge-Offs) Recoveries (55) (1,176) (393) (213)
----------- ----------- ----------- -------------
Balance, End of Period $ 16,693 $ 16,086 $ 16,693 $ 16,086
=========== =========== =========== =============
Average Loans $ 1,613,009 $ 1,361,282 $ 1,511,527 $ 1,354,975
=========== =========== =========== =============
<CAPTION>
AS OF DECEMBER 31,
-------------------
1996 1995
---- ----
<S> <C> <C>
NONPERFORMING ASSETS
Nonperforming Loans $8,882 $13,285
Real Estate Owned, Net (1) 727 9,586
------ -------
Total Nonperforming Loans and Real Estate Owned $9,609(2) $22,871
====== =======
</TABLE>
(1) Real Estate Owned is net of a reserve of $477,000 as of December 31, 1996
and $978,000 as of December 31, 1995.
(2) Decline in nonperforming assets is due to the sale of approximately $6.8
million of real estate owned and to periodic write-downs to fair value.
