<PAGE>
<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ____________
Commission file number 1-11819
-------
HAYWOOD BANCSHARES, INC.
---------------------------
(Exact name of registrant as specified in its charter)
North Carolina 56-1918006
- ----------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
505 North Main Street, Waynesville, North Carolina 28786
- -----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(704) 456-9092
--------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
-------------------
(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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes _____ No _____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
As of November 1, 1996, shares of common stock outstanding
were 1,287,372.
<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
HAYWOOD BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---------- ------------
ASSETS (Unaudited)
- ------
<S> <C> <C>
Cash
Cash on hand and in banks $ 1,301,032 1,467,946
Interest-bearing balances in other banks 524,684 816,890
Federal funds sold 1,088,413 440,248
Investment securities (market value of
$13,481,440 and $17,113,475, respectively) 13,594,099 17,100,000
Mortgage-backed securities (market value of
$1,178,193 and $1,488,416, respectively) 1,152,291 1,419,707
Loans receivable (net of allowance for loan
losses of $718,547 and $703,547 respectively) 106,733,477 104,018,911
Real estate acquired in settlement of loans 1,790,187 1,834,567
Federal Home Loan Bank stock, at cost 1,512,200 1,512,200
Premises and equipment 1,708,230 1,827,077
Other assets 661,050 799,417
Goodwill 793,155 832,530
------------ -----------
$130,858,818 132,069,493
============ ===========
Liabilities and Stockholders' Equity
------------------------------------
Deposit accounts:
Noninterest-bearing $ 179,842 122,427
Interest-bearing, including $11,799,491
and $10,754,929 respectively, of time
deposits for $100,000 or more 108,145,250 108,640,828
------------ ------------
108,325,092 108,763,255
Accrued expenses and other liabilities 2,457,641 1,889,969
------------ ------------
Total liabilities 110,782,733 110,663,224
------------ ------------
Stockholders' equity:
Serial preferred stock, $1.00 par value,
5,000,000 shares authorized; no shares
issued or outstanding
Common stock, $1.00 par value, 10,000,000
shares authorized; 1,200,856 and 1,287,372
shares issued and outstanding, respectively 1,200,856 1,287,372
Additional paid-in capital 3,164,630 4,652,561
Retained income, substantially restricted 16,022,553 15,825,090
------------ ------------
20,388,039 21,765,023
Less obligation in connection with funds
used to acquire common shares by ESOP (311,954) (358,754)
------------ ------------
Total stockholders' equity 20,076,085 21,406,269
------------ ------------
$130,858,818 132,069,493
============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
<PAGE>
HAYWOOD BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Income
<TABLE>
<CAPTION>
Nine months ended
September 30,
------------------------
(Unaudited)
1996 1995
------- -------
<S> <C> <C>
Interest income:
Loans $6,539,678 6,402,869
Investment securities - U.S. Government
Agencies 642,222 827,185
Mortgage-backed securities 82,271 102,919
Interest-bearing balances in other banks 15,360 33,429
Federal funds sold 26,394 26,940
Other 82,076 81,981
---------- ---------
Total interest income 7,388,001 7,475,323
Interest expense:
Deposits, including $331,475 in 1996
and $304,102 in 1995, on time deposits for
$100,000 or more 3,682,609 3,768,137
Other borrowed money 16,019 3,215
---------- ---------
Total interest expense 3,698,628 3,771,352
Net interest income 3,689,373 3,703,971
Provision for loan losses 15,000 15,000
---------- ---------
Net interest income after provision
for loan losses 3,674,373 3,688,971
---------- ---------
Other income:
Insurance income, net 119,516 97,805
Service charges on deposits 53,823 38,680
Rental income 37,963 39,813
Real estate operations, net 306,327 188,053
Other income 20,096 36,242
---------- ---------
Total other income, net 537,725 400,593
---------- ---------
General and administrative expenses:
Salaries and employee benefits 1,358,887 1,242,051
Occupancy and equipment 273,301 279,619
Federal and other insurance premiums 927,552 198,957
Amortization of goodwill 39,375 39,375
Other expenses 553,328 578,447
---------- ---------
Total general and administrative expenses 3,152,443 2,338,449
---------- ---------
Income before income taxes 1,059,655 1,751,115
Income taxes 365,000 628,000
---------- ---------
Net income $ 694,655 1,123,115
========== =========
Per share amounts:
Net income $ .57 .87
========== =========
</TABLE>
See accompanying notes to consolidated financial statements.
3<PAGE>
<PAGE>
HAYWOOD BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Income
<TABLE>
<CAPTION>
Three months ended
September 30,
-------------------------
(Unaudited)
1996 1995
-------- --------
<S> <C> <C>
Interest income:
Loans $2,168,284 2,160,656
Investment securities - U.S. Government
Agencies 195,163 267,861
Mortgage-backed securities 25,380 33,316
Interest-bearing balances in other banks 5,883 14,552
Federal funds sold 11,629 12,656
Other 27,558 27,634
---------- ---------
Total interest income 2,433,897 2,516,675
---------- ---------
Interest expense on deposits, including $97,750
in 1996 and $82,997 in 1995 on time deposits
for $100,000 or more 1,155,108 1,283,476
Other borrowed money 2,040 --
---------- ---------
Total interest expense 1,157,148 1,283,476
Net interest income 1,276,749 1,233,199
---------- ---------
Provision for loan losses 5,000 5,000
Net interest income after provision
for loan losses 1,271,749 1,228,199
---------- ---------
Other income:
Insurance income, net 44,534 32,485
Service charges on deposits 15,970 12,750
Rental income 14,956 9,938
Real estate operations, net 98,159 57,455
Other income 1,587 15,715
---------- ---------
Total other income, net 175,206 128,343
General and administrative expenses:
Salaries and employee benefits 447,448 408,319
Occupancy and equipment 85,604 84,624
Federal and other insurance premiums 786,362 66,337
Amortization of goodwill 13,125 13,125
Other expenses 171,179 171,079
---------- ---------
Total general and administrative expenses 1,503,718 743,484
---------- ---------
Income (loss) before income taxes (56,763) 613,058
Income taxes (benefit) (44,000) 192,000
---------- ---------
Net income (loss) $ (12,763) 421,058
========== =========
Net income per share $ (.01) .33
========== =========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
<PAGE>
HAYWOOD BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity
Nine Months ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Additional Total
Common Paid-in Retained Obligation Stockholders'
Stock Capital Income of ESOP Equity
-------- ---------- -------- ---------- ------------
<S> <C> <C> <C> <C>
Balance at December 31, 1995 $1,287,372 4,652,561 15,825,090 (358,754) 21,406,269
Stock options exercised 5,700 23,863 -- -- 29,563
Repurchase of common stock (92,216) (1,569,097) -- -- (1,661,313)
Net income -- -- 694,655 -- 694,655
Cash dividends paid on
common stock, $.26 per share -- -- (324,431) -- (324,431)
Cash dividends declared on
common stock, $.13 per share -- -- (156,111) -- (156,111)
Principal repayment of ESOP debt -- -- -- 46,800 46,800
Release and allocation of ESOP
shares -- 57,303 (16,650) -- 40,653
---------- ---------- ---------- -------- ----------
Balance at September 30, 1996 $1,200,856 3,164,630 16,022,553 (311,954) 20,076,085
========== ========== ========== ======== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
5<PAGE>
<PAGE>
HAYWOOD BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Nine months ended
September 30,
------------------------
(Unaudited)
1996 1995
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 694,655 1,123,115
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 15,000 15,000
Accretion of discount on loans (34,622) (21,000)
Depreciation 140,574 145,538
Amortization of goodwill 39,375 39,375
Decrease in allowance for uncollected
interest (24,388) (58,932)
Net gain on sale of assets (12,695) (4,950)
Decrease in other assets 138,367 44,477
Increase in accrued expenses and
other liabilities 656,372 291,454
Increase in deferred loan fees 33,329 45,526
----------- ----------
Net cash provided by operating
activities 1,645,967 1,619,603
----------- ----------
Cash flows from investing activities:
Purchases of investment securities (4,500,000) (2,500,000)
Proceeds from maturities of investment
securities 8,005,901 5,000,000
Principal collected on mortgage-backed
securities 267,416 187,764
Loan principal repayments (originations), net (2,703,885) (3,917,950)
Proceeds from sales of real estate acquired
in settlement of loans 57,075 44,937
Capital items related to real estate acquired
in settlement of loans -- (86,584)
Purchases of premises and equipment (21,727) (11,959)
----------- ----------
Net cash provided by (used in)
investing activities 1,104,780 (1,283,792)
</TABLE>
(Continued)
6<PAGE>
<PAGE>
HAYWOOD BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows, Continued
<TABLE>
<CAPTION>
Nine months ended
September 30,
------------------------
(Unaudited)
1996 1995
------- -------
<S> <C> <C>
Cash flows from financing activities:
Net increase (decrease) in certificates
of deposit (73,611) 3,670,677
Net decrease in other deposits (364,552) (3,215,131)
Proceeds from note payable 1,000,000 --
Repayment of note payable (1,000,000) --
Repurchase of common stock (1,661,313) --
Cash dividends paid (491,789) (462,057)
Proceeds from issuance of common
stock upon exercise of stock options 29,563 37,406
----------- ----------
Net cash (used in) provided by
financing activities (2,561,702) 30,895
----------- ----------
Net increase (decrease) in cash and cash
equivalents 189,045 366,706
Cash and cash equivalents at beginning of period 2,725,084 1,707,898
----------- ----------
Cash and cash equivalents at end of period $ 2,914,129 2,074,604
=========== ==========
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $ 3,716,204 3,730,513
Income taxes 579,122 717,223
=========== ==========
Supplemental schedule of noncash investing
and financing activities:
Loans receivable transferred to real estate
acquired in settlement of loans $ -- 47,278
Dividends payable 156,111 154,486
=========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE>
<PAGE>
HAYWOOD BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
September 30, 1996
(Unaudited)
(1) Presentation of Financial Statements
------------------------------------
The unaudited consolidated financial statements within Item 1 include,
in the opinion of management of Haywood Bancshares, Inc., all
adjustments (consisting only of normal recurring adjustments)
necessary for fair presentation of such consolidated financial
statements for the periods indicated.
(2) Summary of Significant Accounting Policies
------------------------------------------
For a description of the significant accounting and reporting
policies, see note (1) in the notes to the December 31, 1995
consolidated financial statements of the 1995 annual report.
(3) Cash and Cash Equivalents
-------------------------
Cash and cash equivalents include cash on hand and in banks, interest-
bearing balances in other banks, and federal funds sold. Generally,
cash and cash equivalents are considered to have maturities of three
months or less.
(4) Allowance for Loan Losses
-------------------------
The following is a reconciliation of the allowance for loan losses for
the nine months ended September 30, 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
------ ------
<S> <C> <C>
Balance at beginning of period $703,547 683,547
Provision for loan losses 15,000 15,000
-------- -------
Balance at end of period $718,547 698,547
======== =======
(5) Stock Options
-------------
During the nine month period ended September 30, 1996, 1,700 incentive
and 4,700 non-incentive stock options were exercised at an option
price of $5.63 and $5.00 per share, respectively.
(6) Formation of Bank Holding Company
---------------------------------
Effective on February 28, 1995, Haywood Bancshares, Inc. (the Holding
Company) was incorporated, solely for the purpose of becoming the
holding company for Haywood Savings Bank, Inc., SSB. The Holding
Company's Registration Statement on Form S-4 became effective with the
Securities and Exchange Commission on April 7, 1995. The stockholders
of Haywood Savings Bank, Inc., SSB approved the Agreement and the Plan
of Reorganization on May 2, 1995 and the reorganization was completed
on June 30, 1995.
The comparative nine months ended September 30, 1995 financial
statements presented represent the financial statements for the
Holding Company and its predecessor wholly-owned subsidiary, Haywood
Savings Bank, Inc., SSB.
8<PAGE>
<PAGE>
HAYWOOD BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(7) Stock Repurchase
----------------
Haywood Bancshares, Inc. repurchased 86,516 shares of common stock at
$18 per share in April and May 1996, and 5,700 shares of common stock
at $18.25 per share in July of 1996 in connection with the stock
repurchase program announced on August 8, 1995, which permits
repurchases of up to 10% of the 1,287,372 outstanding shares. Haywood
Bancshares, Inc. retires all repurchased shares under this program.
(8) Accounting Changes
------------------
Effective January 1, 1996 the Corporation adopted Statement of
Financial Accounting Standards (SFAS) No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of," which requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be reviewed
for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. The
adoption of the Standard had no impact on the Corporation's financial
statements.
The Financial Accounting Standards Board (FASB) has issued SFAS No.
122, "Accounting for Mortgage Servicing Rights," which requires that a
mortgage banking enterprise recognize as separate assets the rights to
service mortgage loans for others, however those servicing rights are
acquired. The Corporation adopted SFAS No. 122 effective January 1,
1996. As the Corporation does not generally originate loans held for
sale, the adoption of SFAS No. 122 has had no effect on the financial
statements.
The FASB has also issued Standard No. 123, "Accounting for Stock-Based
Compensation" which requires that the fair value of employee stock-
based compensation plans be recorded as a component of compensation
expense in the statement of income as of the date of grant of awards
related to such plans or that the impact of such fair value on net
income and earnings per share be disclosed on a pro forma basis in a
footnote to financial statements for awards granted after December 15,
1994, if the accounting for such awards continues to be in accordance
with Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees" (APB 25). The Corporation will continue such
accounting under the provisions of APB 25. This Standard is required
for fiscal years beginning after December 15, 1995.
(9) Employee Stock Ownership Plan
-----------------------------
The Corporation has an employee stock ownership plan (ESOP) whereby
126,000 shares, or approximately 10% of the stock issued in
conjunction with Haywood Savings' conversion from a mutual to a stock
association, were purchased for future issuance to employees.
Additionally, in 1994, the Plan purchased 49,000 shares of common
stock at $12.00 per share for future issuance to employees.
The stock in the ESOP Plan has a put feature available to the ESOP
participants if the stock is not listed on a national securities
exchange. Prior to June 20, 1996, the Corporation's stock was not
listed on a national securities exchange. Accordingly, the 1995
annual report reported the 175,000 shares of ESOP stock, net of 29,685
unreleased shares associated with an outstanding ESOP Loan, outside
shareholders equity at their fair value. However, effective June 20,
1996, the Corporation's stock became listed on the American Stock
Exchange, negating the put feature and the need to report the ESOP
shares separately. As a result, the December 31, 1995 balances have
been restated to reflect this change in fact and related reporting for
comparative purposes.
9
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
- ------------------------------------------------------------
Comparison of Financial Condition and Operating Results as of and for
- ---------------------------------------------------------------------
the Nine Months Ended September 30, 1996 and 1995.
- -------------------------------------------------
Net income in 1996 decreased to $694,655, or $.57 per share, from
$1,123,115, or $.87 per share, in 1995. The decrease in net income
was primarily due to a one-time assessment in September 1996 of SAIF-
insured deposits by the FDIC to recapitalize the Savings Association
Insurance Fund (SAIF). Haywood Savings insurance expense for this
assessment totaled approximately $720,000 pre-tax. Net income,
excluding this one time expense, would have been $1,779,860 before
tax, and $1,114,655, after tax. Earnings per share was also impacted
by repurchased and retired shares.
Total interest income was $7,388,001, an $87,322 decrease from the
same period in 1995. The primary reason for the change was a decrease
in the average yield on interest earning assets (see table below) with
an increase in the balance of average interest earning assets of
approximately $2.8 million, or 2.2%. Interest expense in 1996
decreased from 1995 by $72,724, or 2%, due to a decrease in the
average rate on interest bearing liabilities (see table below) and an
approximate $1.5 million, or 1.3% decrease in the average balance of
interest bearing liabilities. The overall net effect of these changes
was a $14,598 decrease in net interest income before provision for
loan losses and a decrease in the interest rate spread between
interest earning assets and interest bearing liabilities from 3.37% in
1995 to 3.16% in 1996.
Other income increased $137,132, or 34.2%, in 1996 compared to the
same period in 1995, primarily as a result of an increase in net real
estate operations, which relates to net rental income from a
significant piece of real estate owned (shopping center in
Waynesville, NC).
General and administrative expenses increased $813,994, or 34.8%, in
1996 compared to 1995, primarily as a result of a nonrecurring federal
insurance assessment by the FDIC to recapitalize the Savings
Association Insurance Fund, mentioned in the first paragraph.
As a result of these and other factors, income before income taxes
decreased $691,460, or 39.5%, in 1996 versus 1995. Income tax expense
of $365,000 during the period resulted in an effective income tax rate
of 34.4% compared to 35.9% in 1995.
Haywood Savings' loan portfolio increased by approximately $2.7
million during the nine months ended September 30, 1996. Loan
originations for the period were approximately $21.1 million. For the
same period in 1995, loan originations were approximately $18.6
million and the loan portfolio increased by approximately $3.9
million.
Comparative yields, costs, and spreads for the respective periods are as
follows:
</TABLE>
<TABLE>
<CAPTION>
Twelve Months
Nine Months Ended At Ended
September 30, September 30, December 31,
1996 1995 1996 1995
------ ------ ------- -------------
<S> <C> <C> <C> <C>
Average yield on interest
earning assets 7.65% 7.91% 7.71% 7.86%
Average rate on interest
bearing liabilities 4.49% 4.54% 4.84% 4.54%
---- ---- ---- ----
Asset/liability spread 3.16% 3.37% 2.87% 3.32%
==== ==== ==== ====
</TABLE>
10<PAGE>
<PAGE>
Comparison of Operating Results for the Three Months Ended
- ----------------------------------------------------------
September 30, 1996 and 1995
- ---------------------------
Net income (loss) in 1996 decreased to ($12,763), or ($.01) per
share from $421,058, or $.33 per share, in 1995. The decrease
was primarily due to a one-time assessment in September 1996 of
SAIF-insured deposits by the FDIC to recapitalize the Savings
Association Insurance Fund (SAIF). Haywood Savings insurance
expense for this assessment totaled approximately $720,000 pre-
tax. Net income, excluding this one time expense, would have
been $663,442 before tax, and $407,237 after tax. Earnings per
share was also impacted by repurchased and retired shares.
Total interest income for the 1996 period was $2,433,897, an
$82,778, or 3.3%, decrease from the same period in 1995. The
primary reason for the change was a decrease in the average yield
on interest earning assets from 7.81% for 1995 to 7.58% for 1996,
and a .3% decrease in the balance of average interest earning
assets. Interest expense for the 1996 quarter was $1,157,148, a
$126,328 or 9.8%, decrease from the 1995 quarter due primarily to
a decrease in the average rate on interest bearing liabilities
from 4.58% for 1995 to 4.23% for 1996. The overall effect of
these changes was a $43,550 increase in net interest income
before provision for loan losses and an increase in the interest
rate spread between interest earning assets and interest bearing
liabilities from 3.23% in 1995 to 3.35% in 1996.
Other income increased $46,863, or 36.5%, in 1996 compared to the
same period in 1995, primarily as a result of an increase in net
real estate operations, which relates to net rental income from a
significant piece of real estate owned and the profit on the sale
of real estate owned.
General and administrative expenses increased $760,234, or 102%,
in 1996 compared to the same period in 1995, primarily as a
result of a nonrecurring federal insurance assessment by the FDIC
to recapitalize the Savings Association Insurance Fund, mentioned
above.
As a result of these and other factors, income before income
taxes decreased $669,821, or 109%, in 1996 versus 1995.
Asset Quality
- -------------
Haywood Bancshares' allowance for loan losses as a percentage of
outstanding loans remained stable at .67% at September 30, 1996
compared to .67% at December 31, 1995. At September 30, 1996,
nonaccrual loans were $1,261,000 compared to $1,285,000 at
December 31, 1995. There were no charge-offs during the nine
month periods ended September 30, 1996 and 1995. Management
recorded provisions for loan losses of $15,000 for the nine month
periods ended September 30, 1996 and 1995. Management remains
conscious of the judgmental nature of the allowance for loan
losses and the need for periodically evaluating the risk inherent
in the loan portfolio.
Liquidity
- ---------
Haywood Bancshares' asset-liability management policy is to
maintain and enhance the net interest margin and provide adequate
liquidity to meet continuing loan demand, withdrawal
requirements, and pay for normal operating expenses. Liquidity
is provided by the ability to attract deposits, maturities in the
investment portfolio, loan repayments, and current earnings.
At September 30, 1996, Haywood Bancshares' had approximately
$16.5 million in cash, interest bearing balances in other banks,
federal funds sold, and investment securities. Management
believes that the level of liquidity at September 30, 1996, is
adequate and in compliance with regulatory requirements.
Capital Resources
- -----------------
Haywood Savings must comply with regulatory capital requirements
established by the FDIC. At September 30, 1996 Haywood Savings'
leverage capital ratio (Tier I Capital less certain intangible
assets to total assets) was 14.51%. The FDIC has not advised
Haywood Savings of any specific leverage ratio applicable to it.
Also, Haywood Savings exceeds the minimum FDIC requirements for
total risk-based capital (8%). The Holding Company must comply
with FRB capital requirements which are substantially the same.
11<PAGE>
<PAGE>
Commitments
- -----------
In May 1996, Haywood Savings Bank made a commitment of $3 million
to be a limited partner in the formation of Dovenmuehle Limited
Partnership Tranche VIII Servicing Division of Dovenmuehle
Mortgage Company L.P. This partnership has received commitments
of approximately $40 million through six limited partners to
purchase servicing rights on blocks of mortgage loans. The
servicing will be performed by Dovenmuehle Mortgage, Inc.
Haywood will provide to the partnerships its investment of $3
million gradually, as the blocks of servicing rights are
successfully bid on and purchased. As of September 30, 1996,
Haywood had not funded any of its investment, as the partnership
had not yet purchased any servicing rights.
12<PAGE>
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ------------------------------------------
(a) Exhibits. The following exhibits are being filed with
the report.
Exhibit
Number Description
-------- -----------
27 Financial Data Schedule (EDGAR ONLY)
(b) Reports on Form 8-K. During the quarter ended September
30, 1996, the Registrant did not file any reports on Form 8-K.
13<PAGE>
<PAGE>
SIGNATURES
- ----------
Under 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.
HAYWOOD BANCSHARES, INC.
(Registrant)
Date: November 1, 1996 By:/s/ Larry R. Ammons
----------------------
Larry R. Ammons
(President and Principal
Executive Officer)
(Duly Authorized Representative)
Date: November 1, 1996 By: /s/ Jack T. Nichols
-----------------------
Jack T. Nichols
(Principal Financial Officer
and Principal Accounting
Officer)
14
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
<CASH> 1,301,032
<INT-BEARING-DEPOSITS> 524,684
<FED-FUNDS-SOLD> 1,088,413
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 14,746,390
<INVESTMENTS-MARKET> 14,659,633
<LOANS> 107,452,024
<ALLOWANCE> 718,547
<TOTAL-ASSETS> 130,858,818
<DEPOSITS> 108,325,092
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2,457,641
<LONG-TERM> 0
1,200,856
0
<COMMON> 0
<OTHER-SE> 18,875,229
<TOTAL-LIABILITIES-AND-EQUITY> 130,858,818
<INTEREST-LOAN> 6,539,678
<INTEREST-INVEST> 724,493
<INTEREST-OTHER> 123,830
<INTEREST-TOTAL> 7,388,001
<INTEREST-DEPOSIT> 3,682,609
<INTEREST-EXPENSE> 3,698,628
<INTEREST-INCOME-NET> 3,689,373
<LOAN-LOSSES> 15,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,152,443
<INCOME-PRETAX> 1,059,655
<INCOME-PRE-EXTRAORDINARY> 694,655
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 694,655
<EPS-PRIMARY> .57
<EPS-DILUTED> .57
<YIELD-ACTUAL> 3.83
<LOANS-NON> 1,261,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 703,547
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 718,547
<ALLOWANCE-DOMESTIC> 718,547
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
