<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
( ) TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the transition period from to
-------- --------
Commission File No. 1-13826
THREE RIVERS FINANCIAL CORPORATION
----------------------------------
(Exact name of registrant as specified in its charter)
Delaware 38-3235452
-------- ----------
(State or other jurisdiction of (IRS Employer ID No)
Incorporation or organization)
123 Portage Avenue, Three Rivers, Michigan 49093
-------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(616) 279-5117
--------------
Registrant's telephone number, including area code
N/A
---
Former name, address, and fiscal year, if changed since last report
Check 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
past 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirement for the past 90 days. YES X NO
--- ---
Indicate the number of shares outstanding of each of the registrant's
classes of common equity as of the latest practicable date:
823,540 shares of Common Stock, Par Value $.01 per share as of
November 4, 1997
Transitional Small Business Disclosure Format (check one): Yes ; No X
--- ---
<PAGE> 2
THREE RIVERS FINANCIAL CORPORATION
THREE RIVERS, MICHIGAN
FORM 10Q
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements of Three Rivers Financial Corporation
(Unaudited)
Condensed Consolidated Balance Sheets as of September 30, 1997
and June 30, 1997 1
Condensed Consolidated Statements of Income for the three
months ended September 30, 1997 2
Condensed Consolidated Statement of Changes in Shareholders'
Equity 3
Consolidated Statements of Cash Flows for the three months
ended September 30, 1997 and 1996 4
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II. OTHER INFORMATION 13
Signatures 14
<PAGE> 3
THREE RIVERS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 1997 and June 30, 1997
<TABLE>
<CAPTION>
September 30 June 30
1997 1997
---- ----
(unaudited)
<S> <C> <C>
ASSETS
Cash and due from other financial institutions $ 2,838,832 $ 2,724,565
Interest-earning deposits with other financial institutions 2,247,918 4,713,428
----------- -----------
Cash and cash equivalents 5,086,750 7,437,993
Interest-earning time deposits with other financial institutions 3,767,980 3,470,980
Securities held to maturity (fair value: $17,461,561 at
September 30, 1997, and $17,891,461 at June 30, 1997) 17,393,085 17,924,950
Loans receivable, net of allowance for loan losses of
$490,234 at September 30, 1997, and $487,184 at June 30, 1997 63,551,174 61,812,630
Federal Home Loan Bank Stock 1,042,300 1,042,300
Accrued interest receivable 478,520 450,892
Premises and equipment, net 1,743,645 1,435,603
Foreclosed real estate 31,835 415,059
Investment in low-income housing partnership 460,773 473,117
Other assets 660,138 666,385
----------- -----------
Total assets $94,216,200 $95,129,909
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Demand deposits $ 2,815,239 $ 2,551,384
Savings and NOW deposits 20,623,100 19,932,473
Other time deposits 37,440,674 37,860,935
----------- -----------
Total deposits 60,879,013 60,344,792
Borrowed funds 18,743,737 20,344,287
Advances from borrowers for taxes and insurance 420,510 399,331
Due to low-income housing partnership 413,192 413,192
Accrued expenses and other liabilities 787,128 825,563
----------- -----------
Total liabilities 81,243,580 82,327,165
Shareholders' equity
Preferred stock, par value $0.01; 500,000 shares authorized;
none outstanding
Common stock, par value $0.01; 2,000,000 shares authorized;
831,925 shares issued; 823,540 outstanding at
September 30,1997 and at June 30, 1997 8,319 8,319
Additional paid-in-capital 7,629,814 7,619,120
Retained earnings, substantially restricted 6,252,644 6,110,757
----------- -----------
13,890,777 13,738,196
Unearned Employee Stock Ownership Plan shares (561,626) (561,626)
Unearned Recognition and Retention Plan shares (244,986) (262,281)
Treasury stock, at cost (8,385 shares) (111,545) (111,545)
----------- -----------
Total shareholders' equity 12,972,620 12,802,744
----------- -----------
Total liabilities and shareholders' equity $94,216,200 $95,129,909
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
1
<PAGE> 4
THREE RIVERS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months ended September 30, 1997 and 1996
(Unaudited)
________________________________________________________________________________
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Interest income
Loans Receivable $1,374,125 $1,260,102
Securities 303,750 319,568
Other interest and dividend income 126,901 79,284
---------- ----------
Total interest income 1,804,776 1,658,954
Interest expense
Deposits 676,934 690,706
Borrowed funds 288,980 131,478
---------- ----------
Total interest expense 965,914 822,184
---------- ----------
NET INTEREST INCOME 838,862 836,770
Provision for loan losses 15,000 15,000
---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 823,862 821,770
Noninterest income
Loan servicing 30,303 30,664
Net gains on sales of loans 21,864 7,665
Net gains on sales of foreclosed real estate 19,639 0
Net loss on sales of fixed assets 0 (1,003)
Service charges on deposit accounts 53,660 39,298
Other income 37,843 28,024
---------- ----------
163,309 104,648
---------- ----------
Noninterest expense
Compensation and benefits 331,735 312,509
Occupancy and equipment 105,722 102,980
SAIF deposit insurance premium 9,375 448,436
Advertising and promotion 27,140 23,165
Data processing 51,136 47,904
Professional fees 32,227 26,149
Printing, postage, stationery, and supplies 24,472 30,142
Other 80,686 77,913
---------- ----------
662,493 1,069,198
INCOME (LOSS) BEFORE INCOME TAXES 324,678 (142,780)
Federal income tax expense (benefit) 99,600 (50,490)
---------- ----------
NET INCOME (LOSS) $ 225,078 $ (92,290)
========== ==========
Earnings (loss) per share $ 0.29 $ (0.12)
========== ==========
</TABLE>
________________________________________________________________________________
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE> 5
THREE RIVERS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Three months ended September 30, 1997
(Unaudited)
- --------------------------------------------------------------------------------
Balance at June 30, 1997 $12,802,744
Net income 225,078
Effect of shares committed to be released by ESOP, 10,695
at market value
Cash dividends declared on common stock @ $0.10 per share (83,192)
Amortization of 2,600 RRP shares 17,295
-----------
Balance at September 30, 1997 $12,972,620
===========
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 6
THREE RIVERS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended September 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 225,078 $ (92,290)
Adjustments to reconcile net income to
net cash provided from operating activities
Depreciation of premises and equipment 51,301 47,821
Net accretion on securities (21,265) (7,162)
Provision for loan losses 15,000 15,000
RRP expense 17,295 17,295
ESOP expense 10,695 5,181
Loans originated for sale (1,112,125) (363,400)
Proceeds from sale of loans held for sale 1,133,989 371,065
Net gains on sales of loans (21,864) (7,665)
Net gains on sales of foreclosed real estate (19,639) -
Change in
Accrued interest receivable and other assets (21,380) (340,345)
Accrued expenses and other liabilities (38,435) 432,649
----------- -----------
Net cash provided by operating activities 218,650 78,149
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease (increase) in interest-earning time
deposits with other financial institutions (297,000) 397,000
Net increase in loans (1,753,544) (1,145,114)
Net premises and equipment expenditures (359,343) (33,667)
Purchases of securities held to maturity (1,000,000) (901,631)
Proceeds from maturities of securities held to maturity 500,000 -
Paydowns on securities held to maturity 1,053,130 573,808
Proceeds from sale of foreclosed real estate 402,863 -
Net change in investment in low-income housing partnership 12,344 6,691
----------- -----------
Net cash used in investing activities (1,441,550) (1,102,913)
</TABLE>
________________________________________________________________________________
(Continued)
4
<PAGE> 7
THREE RIVERS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended September 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1,997 1996
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits $ 534,220 $ (716,889)
Net change in advances from borrowers for taxes
and insurance 21,179 2,195
Proceeds from borrowed funds 1,750,000 3,250,000
Repayments of borrowed funds (3,350,550) (2,616,322)
Cash dividends paid (83,192) (64,472)
----------- -----------
Net cash used in financing activities (1,128,343) (145,488)
Net change in cash and cash equivalents (2,351,243) (1,170,252)
Cash and cash equivalents at beginning of period 7,437,993 4,111,621
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,086,750 $ 2,941,369
=========== ===========
Supplemental disclosures of cash flow information
Cash paid for
Interest $ 947,231 $ 813,099
Income taxes - 65,000
</TABLE>
________________________________________________________________________________
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 8
THREE RIVERS FINANCIAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three months ended September 30, 1997
(Unaudited)
Note 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements were
prepared in accordance with instructions for Form 10-QSB and, therefore,
do not include all disclosures required by generally accepted accounting
principals for complete presentation of financial statements.
The unaudited information for the three months ended September 30,1997,
and 1996 includes the consolidated results of operations of Three Rivers
Financial, Inc. (the "Company") and its wholly-owned subsidiary First
Savings Bank, FSB (the "Bank"). In the opinion of management, the
information reflects all adjustments (consisting only of normal
recurring adjustments) which were necessary for a fair presentation of
the results of operations for such periods but should not be considered
an indication of results for a full year or any other period.
Reclassifications: Certain items in the 1996 financial statements have
been reclassified to conform with the 1997 presentation.
Note 2 - SECURITIES
The Company classifies securities into held to maturity and available
for sale categories. Held-to-maturity securities are those which the
Company has the positive intent and ability to hold to maturity and are
reported at amortized cost. Available- for-sale securities are those
the Company may decide to sell if needed for liquidity, asset-liability
management or other reasons. Available-for-sale securities are reported
at fair value, with unrealized gains and losses, if applicable, included
as a separate component of equity, net of tax.
The Company's portfolios of securities held to maturity and available
for sale consist of securities acquired to meet the Company's
regulatory liquidity requirement and anticipated near term cash
funding requirements. Securities in these portfolios are U.S.
Government and federal agency securities, securities issued by
states and political subdivisions and corporate securities. The
mortgage-backed and related securities portfolio consist of issues from
FHLMC, GNMA, FNMA, and other collateralized mortgage obligations with
contractual maturities ranging from one to 25 years. The remaining
securities held to maturity are primarily due in one to five years.
Approximately 93% of the combined securities portfolio consists of fixed
rate instruments while the remainder consists of floating rate
instruments.
_____________________________________________________________________________
(Continued)
6
<PAGE> 9
THREE RIVERS FINANCIAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three months ended September 30, 1997
(Unaudited)
NOTE 3 - DEPOSITS AND LOANS
The Company is principally engaged in the business of accepting deposits
from the general public through a variety of deposit programs and
investing those funds by originating loans secured by one-to-four family
residential properties located in its market area, loans secured by
multi-family residential and commercial properties, construction loans,
second mortgage loans on single-family residences, home equity lines of
credit and consumer loans, both secured and unsecured, including loans
secured by savings accounts. The company sells most long-term fixed rate
mortgage loans to the secondary market.
NOTE 4 - BORROWINGS
Borrowings at September 30, 1997 consisted of advances from the Federal
Home Loan Bank (FHLB) of Indianapolis, bearing rates from 5.19% to 6.17%.
The loans are collateralized by the Company's single family whole loans,
U.S. Government and federal agency securities and mortgage-backed
securities. Adjustable rate advances included $5.5 million indexed
to the 3 month LIBOR rate which adjust quarterly. Adjustable rate
advances have maturities ranging ranging from three months to one year.
The remaining balance of $13.2 million of advances are fixed rate, fixed
term, with maturities from one month to three years. The Company also
maintains a $500,000 line of credit with the FHLB which adjusts daily to
the FHLB's posted rate for these borrowings. The line of credit did not
have a balance at September 30, 1997.
.
NOTE 5 - EARNINGS PER COMMON SHARE
Earnings per common share for the three months ended September 30, 1997
were computed by dividing net income by the weighted average number
of shares of common stock outstanding net of ESOP and Treasury Stock
Shares. The weighted average number of shares outstanding for the
three months ended September 30, 1997 was 768,237.
________________________________________________________________________________
(Continued)
7
<PAGE> 10
THREE RIVERS FINANCIAL CORPORATION
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Three months ended September 30, 1997
(Unaudited)
Note 6 - REGULATORY CAPITAL REQUIREMENTS
Savings institutions must meet three separate minimum capital-to-asset
requirements. The following table summarizes, as of September 30, 1997,
the capital requirements for the Bank and the Bank's actual capital
ratios. As of September 30, 1997, the Bank substantially exceeded all
current regulatory capital requirements.
<TABLE>
<CAPTION>
Regulatory
Capital Requirement Actual Capital
------------------- --------------
(Dollars in thousands)
Amount Percent Amount Percent
------ ------- ------ -------
<S> <C> <C> <C> <C>
Risk-based capital $ 4,059 8.00% $ 11,487 22.64%
Core capital 2,817 3.00% 10,999 11.71%
Tangible capital 1,409 1.50% 10,999 11.71%
</TABLE>
________________________________________________________________________________
8
<PAGE> 11
THREE RIVERS FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Three Rivers Financial Corporation (the "Company") was incorporated under the
laws of the State of Delaware for the purpose of becoming the savings and loan
holding company of First Savings Bank, a Federal Savings Bank (the "Bank") in
connection with the Bank's conversion from a federally chartered mutual savings
bank to a federally chartered stock savings bank (the "Conversion"). On August
23, 1995, the Conversion was completed and the Bank became a wholly-owned
subsidiary of the Company. The following discussion compares the financial
condition of the Company at September 30, 1997 to June 30, 1997 and the
results of operations for the three-month period ended September 30, 1997 with
the same period ended September 30, 1996. This discussion should be read in
conjunction with the financial statements and footnotes included herein.
FINANCIAL CONDITION
September 30, 1997 compared to June 30, 1997.
The Company's total assets decreased $914,000 from $95.1 million at June 30,
1997 to $94.2 at September 30, 1997. The decrease was due primarily to
decreases in cash and cash equivalents, securities held to maturity and
foreclosed real estate. Such decreases were partially offset by increases in
time deposits with other financial institutions, along with increases in loans
receivable and increases in premises and equipment. .
Loans receivable increased $1.8 million or 2.91% from $61.8 million at June 30,
1997 to $63.6 million at September 30, 1997.
Interest earning time deposits with other financial institutions increased
$300,000 or 8.57% from $3.5 million at June 30, 1997 to $3.8 million at
September 30, 1997.
Premises and equipment increased $300,000 or 21.43% from $1.4 million at June
30, 1997 to $l.7 million at September 30, 1997. This increase is the result of
the purchase of a building in Howe, Indiana and a deposit for land in
Middlebury, Indiana. A branch facility will be opened in the building in Howe,
Indiana with an anticipated opening date of February, 1998. The Bank intends
to begin construction of a new branch office in Middlebury, Indiana within the
next few months.
Cash and cash equivalents decreased $2.3 million or 31.08% from $7.4 million at
June 30, 1997 to $5.1 million at September 30, 1997. This decrease in cash was
partially the result of a reduction of $1.6 million in FHLB advances.
Securities decreased $500,000 or $2.79% from $17.9 million at June 30, 1997 to
$17.4 million at September 30, 1997. Securities consisted of U. S. Government
and federal agency securities, mortgage backed and related securities and other
collateralized obligations.
Foreclosed real estate decreased $383,000 or 92.29% from $415,000 at June 30,
1997 to $32,000 at September 30, 1997. This decrease was due to the sale of a
large commercial property which had been carried on the books at $370,000. The
net proceeds of the sale were $384,000 which resulted in a gain on sale of
$14,000.
________________________________________________________________________________
(Continued)
9
<PAGE> 12
THREE RIVERS FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Total borrowed funds decreased $1.6 million or 7.88% from $20.3 million at June
30, 1997 to $18.7 million at September 30, 1996. This decrease was the result
of payments of maturing FHLB advances. Borrowed funds consist of advances
from the Federal Home Loan Bank ("FHLB") with both fixed and variable interest
rates and stated maturities ranging through 2001.
Total deposits increased $600,000 to $60.9 million for the three-month period
ended September 30, 1997. The largest increase by deposit categories was in
demand and statement savings accounts which was partially offset by a decrease
in time deposits.
RESULTS OF OPERATIONS
Net income for the three months ended September 30, 1997 was $225,000 compared
to a net loss of $92,000 for the three months ended September 30, 1996, an
increase of $317,000 or 344.57% due primarily to a $407,000 decrease in
non-interest expense. Increases in interest income of $146,000, or 8.8%, were
offset by increases in interest expense of $144,000, or 17.5%.
Non-interest income increased $58,000 to $163,000 from $105,000 for the three
months period ended September 30, 1997 compared to the same period ended
September 30, 1996. This was due to increases in gains on sales of loans and
foreclosed real estate owned along with increases in service charges on deposit
accounts and other income.
Non-interest expense decreased $407,000 to $662,000 from $1,069,000 for the
three months ended September 30, 1997 compared to the corresponding period in
1996. The majority of the decrease was reflected in a decrease in the deposit
insurance premium of $439,000 from $448,400 for the three months ended
September 30, 1996 to $9,400 for the three months ended September 30, 1997.
This was primarily due to the one-time charge for the recapitalization of SAIF,
which was paid in 1996. The decrease in non-interest expense was partially
offset by increases in compensation expense of $19,000 to $332,000 for the
three-months period ended September 30, 1997 as compared to the corresponding
period in 1996.
Due to the increase in pre-tax income of $467,000 to $325,000 for the period
ended September 30, 1997 as compared to pre-tax loss of $143,000 for the same
period ended September 30, 1996, income tax expense increased by $150,000.
________________________________________________________________________________
(Continued)
10
<PAGE> 13
THREE RIVERS FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NON-PERFORMING ASSETS AND ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is established through a provision for loan
losses based on management's quarterly asset classification review, and
evaluation of the risk inherent in its loan portfolio and changes in the nature
and volume of its loan activity. Such evaluation considers, among other
matters, the estimated value of the underlying collateral, economic conditions,
cash flow analysis, historical loan loss experience, discussions held with
delinquent borrowers and other factors that warrant recognition in providing
for an adequate allowance for loan losses. As a result of this review process,
management recorded a provision for loan losses in the amount of $15,000 for
the three-month period ended September 30, 1997. While management believes the
current allowance for loan losses is adequate, management anticipates growth in
the loan portfolio and will therefore, continue to make additional provisions
to the allowance for loan losses. No assurance can be given that amounts
allocated to the allowance for loan losses will be adequate to cover actual
losses that may occur.
Total non-performing assets increased $85,000 at September 30, 1997 to $656,000
as compared to $571,000 at June 30, 1997. The ratio of non- performing assets
to total assets at September 30, 1997 was 0.69%, compared to 0.60% at June 30,
1997. Included in non-performing assets at September 30, 1997 were consumer
loans in the amount of $80,000, non-performing mortgages of $544,000, and
foreclosed real estate of $32,000. Management has considered a commercial loan
participation, classified as a non-accrual loan at September 30, 1997, as
impaired. At September 30, 1997, the Bank's Balance was $522,000. Collection
under the original terms of the agreement is in doubt and, thus, management has
classified the loan as impaired at September 30, 1997 and has allocated a
specific reserve of $60,000 within the allowance for loan losses. This
$522,000 is included in non-performing mortgages listed above.
OTS regulations require that the Bank periodically review and classify assets
pursuant to the classification of assets policy set forth in its regulations.
Based on management's review of its assets as of September 30, 1997, $669,000
of assets were classified as substandard, $-0- as doubtful, $-0- as loss, and
$228,107 as special mention. At the time of the quarterly review, an asset
classification listing is prepared, in conformity with the OTS regulations,
and a detailed report is presented to the Board.
LIQUIDITY AND CAPITAL RESOURCES
The Bank's primary sources of funds are deposits, borrowings from the FHLB and
interest payments on loans. While scheduled repayments of loans are a
predictable source of funds, deposit flows and mortgage prepayments are greatly
influenced by general interest rates, economic conditions and competition. The
Bank has managed this fluctuation in its source of funds through borrowings
from the FHLB.
________________________________________________________________________________
(Continued)
11
<PAGE> 14
THREE RIVERS FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
A standard measure of liquidity for thrift institutions is the ratio of cash
and eligible investments to a certain percentage of net withdrawable savings
and borrowings due within one year. Currently the OTS encourages savings
institutions to maintain a liquidity ratio of 5%, of which 1% must be comprised
of short-term investments. As of September 30, 1997, the Bank's liquidity
ratio was 14.88% with total liquid assets of $10,507,016: 11.06% in cash and
short term investments, and 3.82% in qualifying long term investments.
ACCOUNTING DEVELOPMENTS
SFAS No. 123, "Accounting for Stock-Based Compensation"
In October, 1995, the Financial Accounting Standards Board (FASB) issued SFAS
No. 123 which encourages, but does not require, the use of a "fair value based
method" to account for stock-based compensation plans. If the encouraged fair
value accounting is not adopted, entities must disclose the effect on net
income and on earnings per share had the accounting been adopted for
stock-based compensation awarded after June 30, 1995. The Statement also
requires accounting at fair value for all transactions in which an entity
acquires goods or services from nonemployees in exchange for equity
instruments. Fair value of a stock option is to be estimated using an
option-pricing model, such as Black- Scholes, that considers: exercise price,
expected life of the option, current price of the stock, expected price
volatility, expected dividends on the stock, and the risk-free interest rate.
Once estimated, the fair value of an option is not later changed. Management
decided not to adopt the recognition provisions of SFAS No. 123 and has
determined that the impact on net income and earnings per share was not
material to the 1996 or 1997 consolidated financial statements. In future
years, as additional options are granted, the effect on net income and earnings
per share may increase.
SFAS No. 125 "Accounting for transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," was issued in 1996. It revises the accounting
for transfers of financial assets, such as loans and securities, and for
distinguishing between sales and secured borrowings. It became effective for
some transactions occurring after December 31, 1996, and will be effective for
others in 1998. The impact of partial adoption in 1997 was not material to the
1997 consolidated financial statements and the impact of the complete adoption
in 1998 is also not expected to be material to the consolidated financial
statements.
________________________________________________________________________________
12
<PAGE> 15
PART II
ITEM 1 - LEGAL PROCEEDINGS
None
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 - OTHER INFORMATION
On August 12, 1997, the Company declared a cash dividend of $0.10 per
share which was payable on October 1, 1997, to stockholders of record
on September 12, 1997.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-k
None
_______________________________________________________________________________
13
<PAGE> 16
THREE RIVERS FINANCIAL CORPORATION
THREE RIVERS, MICHIGAN
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.
Three Rivers Financial Corporation
Date: November 5, 1997 /s/ G. Richard Gatton
-------------------------------------
G. Richard Gatton
President and Chief Executive Officer
Date: November 5, 1997 /s/ Martha Romig
-------------------------------------
Martha Romig
Senior Vice-President, Treasurer and
Chief Financial Officer
______________________________________________________________________________
14
<PAGE> 17
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
Exhibit 27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SCHEDULE 10Q
DATED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,838,832
<INT-BEARING-DEPOSITS> 2,247,918
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 17,393,085
<INVESTMENTS-MARKET> 17,461,561
<LOANS> 63,551,174
<ALLOWANCE> 490,234
<TOTAL-ASSETS> 94,216,200
<DEPOSITS> 60,879,013
<SHORT-TERM> 420,510
<LIABILITIES-OTHER> 787,128
<LONG-TERM> 18,743,737
8,319
0
<COMMON> 0
<OTHER-SE> 12,964,301
<TOTAL-LIABILITIES-AND-EQUITY> 94,216,200
<INTEREST-LOAN> 1,374,125
<INTEREST-INVEST> 303,750
<INTEREST-OTHER> 126,901
<INTEREST-TOTAL> 1,804,776
<INTEREST-DEPOSIT> 676,934
<INTEREST-EXPENSE> 965,914
<INTEREST-INCOME-NET> 838,862
<LOAN-LOSSES> 15,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 80,686
<INCOME-PRETAX> 324,678
<INCOME-PRE-EXTRAORDINARY> 324,678
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 225,078
<EPS-PRIMARY> .29
<EPS-DILUTED> 0
<YIELD-ACTUAL> 8.20
<LOANS-NON> 649,756
<LOANS-PAST> 0
<LOANS-TROUBLED> 135,462
<LOANS-PROBLEM> 228,107
<ALLOWANCE-OPEN> 487,184
<CHARGE-OFFS> 12,258
<RECOVERIES> 308
<ALLOWANCE-CLOSE> 490,234
<ALLOWANCE-DOMESTIC> 60,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 430,234
</TABLE>
