<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Quarter Ended June 30, 1996
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____ to _____
Commission file number 000-27244
USABANCSHARES, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
PENNSYLVANIA 23-2806495
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
ONE PENN SQUARE, 30 SOUTH 15TH STREET, PHILADELPHIA, PA, 19102
---------------------------------------------------------------
(Address of Principal Executive Offices)
(Zip Code)
(215) 569-4200
-----------------------------------------------------
(Registrant's telephone number, including area code)
Securities registered under Section 12(b) of the Act: None.
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 issuer's classes of
common stock, as of the latest practicable date:
Common Stock, $1.00 par value, outstanding on July 31,1996: 542,802
Class B Common Stock, $.01 par value, outstanding on July 31,1996: 10,000
<PAGE>
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page #
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets 3
Consolidated Statements of Income 4,5
Statements of Changes in Stockholders' Equity 6
Consolidated Statements of Cash Flows 7
Notes to Consolidated Financial Statements 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Change in Securities 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of
Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
<PAGE>
USABANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
<S> <C> <C>
ASSETS
Cash and cash equivalents:
Cash and Due from banks $ 192,175 $ 557,625
Interest-bearing deposits with banks 2,452,972 7,536,508
------------ ------------
Total cash and cash equivalents 2,645,147 8,094,133
Investment securities:
Investments available for sale 3,065,194 2,589,532
Investments held to maturity 8,431,696 7,478,613
------------ ------------
Total investment securities 11,496,890 10,068,145
Loans 11,758,832 7,057,197
Allowance for loan losses (135,000) (60,000)
Loans, net 11,623,832 6,997,197
Premises and Equipment, net 148,197 123,036
Goodwill 177,355 185,492
Other assets 350,626 317,520
------------ ------------
Total assets $26,442,047 $ 25,785,523
------------ ------------
------------ ------------
LIABILITIES
Deposits:
Demand $ 105,199 $ -
Passbook 2,368,440 2,591,172
NOW accounts 564,768 405,850
Certificates of deposit 18,498,810 17,801,887
------------ ------------
Total deposits 21,537,217 20,798,909
Other liabilities 135,358 327,772
------------ ------------
Total liabilities $21,672,575 $ 21,126,681
STOCKHOLDERS' EQUITY
Preferred stock, $1.00 par value; authorized 5,000,000 shares;
no shares issued and outstanding
Common stock, $1.00 par value; authorized 10,000,000 shares;
542,802 shares issued and outstanding and 54,280 shares of
converted and unissued Class B common stock 597,082 597,082
Additional paid-in capital 4,877,701 4,877,701
Accumulated deficit (211,584) (278,843)
Unearned compensation, Class B common stock (479,475) (533,755)
Stock subscription receivable 0 (20,000)
Unrealized gain on securities available for sale (14,252) 16,657
------------ ------------
Total stockholders' equity 4,769,472 4,658,842
------------ ------------
Total liabilities and stockholders' equity $26,442,047 $ 25,785,523
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
3
<PAGE>
<TABLE>
<CAPTION>
USABANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Six Months Ended
June 30,
------------------------------
1996 1995
---------- ---------
<S> <C> <C>
Interest income:
Loans $ 832,595 $ 145,661
Investment securities 351,400 504,386
Interest-bearing deposits and other 144,417 30,603
---------- ---------
1,328,412 680,650
Interest expense:
Passbook 32,254 33,563
NOW Accounts 5,196 4,635
Certificates of deposit 516,443 408,736
Other borrowings - 12,955
---------- ---------
553,893 459,889
---------- ---------
Net interest income 774,519 (459,889)
Provision for loan losses (75,000) (1,200)
---------- ---------
Net interest income after provision for loan losses 699,519 219,561
Non-interest income
Gain on sales of investment securities 22,063 -
Other 45,615 (1,920)
---------- ---------
67,678 (1,920)
Non-interest expense:
Compensation 381,036 96,494
Occupancy 52,666 37,265
Data processing 32,085 17,765
Professional fees 49,491 25,756
Advertising 11,558 7,529
Insurance 25,726 -
Office 37,362 -
Travel & Entertainment 25,823 -
Depreciation and Amortization 29,707 16,192
Other 54,484 39,037
---------- ---------
699,938 240,038
---------- ---------
Income before income taxes 67,259 (22,397)
Provision for income taxes - -
---------- ---------
Net income, (loss) $ 67,259 $ (22,397)
---------- ---------
---------- ---------
Earnings per common share - primary and fully diluted $ 0.11 $ (0.04)
Weighted average shares outstanding 597,082 597,082
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
4
<PAGE>
USABANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
June 30,
--------------------------
1996 1995
---------- ---------
<S> <C> <C>
Interest income:
Loans $ 601,325 $ 75,910
Investment securities 186,775 262,857
Interest-bearing deposits and other 43,786 15,949
---------- ---------
831,886 354,715
Interest expense:
Passbook 15,875 16,471
NOW Accounts 2,553 2,408
Certificates of deposit 258,295 219,373
Other borrowings - -
---------- ---------
276,723 238,252
---------- ---------
Net interest income 555,163 116,463
Provision for loan losses (75,000) -
---------- ---------
Net interest income after provision for loan losses 480,163 116,463
---------- ---------
Non-interest income
Gain on sales of investment securities - -
Other 5,377 (2,692)
---------- ---------
5,377 (2,692)
Non-interest expense:
Compensation 215,481 45,742
Occupancy 25,440 18,148
Data processing 18,869 8,169
Professional fees 43,226 3,070
Advertising 6,486 4,366
Insurance 19,873 -
Office 27,080 -
Travel & Entertainment 14,871 -
Depreciation and Amortization 14,900 14,092
Other 40,740 23,857
---------- ---------
426,966 117,444
---------- ---------
Income before income taxes 58,574 (3,673)
Provision for income taxes - -
---------- ---------
Net income, (loss) $ 58,574 $ (3,673)
---------- ---------
---------- ---------
Earnings per common share - primary and fully diluted $ 0.10 $ (0.01)
Weighted average shares outstanding 597,082 597,082
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
5
<PAGE>
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the six months ended June 30, 1996
<TABLE>
<CAPTION>
Unearned Net
Additional compensation Stock unrealized
Common paid-in Accumulated Class B subscription gain on
Stock capital deficit Common Stock receivable AFS securities Total
-------- --------- --------- ------------ ------------ -------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $597,082 $4,877,701 $(278,843) $(533,755) $(20,000) $16,657 $4,658,842
Net unrealized loss on
securities available-for-sale - - - - (14,585) (14,585)
Amortization of unearned
compensation Class B common stock - - - 27,140 - - 27,140
Receipt of stock subscription receivable - - - 20,000 - 20,000
Net income - - 8,685 - - - 8,685
-------- --------- --------- ------------ ------------ -------------- ---------
Balance at March 31, 1996 597,082 4,877,701 (270,158) (506,615) - 2,072 4,700,082
-------- --------- --------- ------------ ------------ -------------- ---------
-------- --------- --------- ------------ ------------ -------------- ---------
Net unrealized loss on
securities available-for-sale - - - - - (16,324) (16,324)
Amortization of unearned
compensation Class B common stock - - 27,140 - - - 27,140
27,140
Receipt of stock subscription receivable - - - - - - -
Net income - - 58,574 - - - 58,574
-------- --------- --------- ------------ ------------ -------------- ---------
Balance at June 30, 1996 $597,082 $4,877,701 $ (211,584) $ (479,475) $ - $(14,252) $4,769,472
-------- --------- --------- ------------ ------------ -------------- ---------
</TABLE>
6
<PAGE>
USABANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 67,259
Adjustments to reconcile net income to cash provided
by operating activities
Depreciation and amortization 51,734
Provision for loan losses 75,000
Amortization of organizational expense 2,749
Gain on sale of investments available for sale (22,063)
Increase in accrued income and other assets (33,106)
Decrease in other liabilities (192,414)
-----------
Net cash from operating activities (50,841)
-----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investment securities available for sale 1,482,188
Purchase of investment securities available for sale (1,742,975)
Purchase of investment securities held to maturity (1,649,500)
Repayments of principal on investment securities held to maturity 499,178
Repayments of principal on investment securities available for sale 48,289
Net increase in loans (4,701,635)
Purchases of premises and equipment (15,898)
-----------
Net cash from investing activities (6,080,353)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand deposits and savings accounts 41,385
Net increase in certificates of deposit 696,923
Repayment of other borrowed funds (56,100)
-----------
Net cash from financing activities 682,208
-----------
Net increase (decrease) in cash and cash equivalents (5,448,986)
Cash and cash equivalents, beginning of year 8,094,133
-----------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 2,645,147
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
7
<PAGE>
USABANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
1. PRINCIPLES OF CONSOLIDATION AND PRESENTATION
The accompanying consolidated financial statements include the accounts of
USABancShares, Inc. (the "Company") and its wholly-owned subsidiary Peoples
Thrift Savings Bank (the "Bank"). All significant intercompany accounts and
transactions have been eliminated. Certain reclassifications were made to 1995
data to conform to current year presentation.
The interim financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information.
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 including normal recurring
accruals necessary for fair presentation of results of operations for the
interim periods included herein have been made. The results of operations for
the six months ended June 30 1996, are not necessarily indicative of results to
be anticipated for the full year.
2. ALLOWANCE FOR LOAN LOSSES
The following is a summary of the allowance for loan losses for the six
months ended June 30, 1996 and 1995:
1996 1995
---------- ---------
BALANCE, JANUARY 1, $ 60,000 $ -
---------- ---------
Additions:
Allowance of acquired banks - 8,800
Provision for loan losses 75,000 1,200
---------- ---------
Total additions 75,000 10,000
---------- ---------
Deductions:
Loan losses 0 0
Less recoveries on loans 0 0
Net loan losses 0 0
---------- ---------
BALANCE, JUNE 30, $135,000 $10,000
---------- ---------
8
<PAGE>
3. INVESTMENT SECURITIES
Investment securities consisted of the following at June 30, 1996 and
December 31, 1995:
<TABLE>
<CAPTION>
June 30, 1996
-----------------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE
U.S. Government agency securities $1,992,274 $ - $ 15,566 $1,976,709
Mortgage-backed securities 984,914 6,029 978,885
Other securities 109,600 - - 109,600
---------- ------------ ------------ -------------
Total available for sale $3,086,788 $ - $ 21,594 $3,065,194
========== ============ ============ =============
Held to Maturity
U.S. Government agency securities $ 999,500 $ - $ 33,489 $ 966,011
Corporate securities 400,000 30,014 - 430,014
Mortgage-backed securities 7,032,196 - 72,529 6,959,667
---------- ------------ ------------ -------------
Total held to maturity $8,431,696 $ 30,014 $106,017 $8,355,692
========== ============ ============ =============
<CAPTION>
December 31, 1995
-----------------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE
Mortgage-backed securities $2,480,495 $ 25,237 $ - $2,505,732
Other securities 83,800 - - 83,800
---------- ------------ ------------ -------------
Total available for sale $2,564,295 $ 25,237 $ - $2,589,532
========== ============ ============ =============
Held to Maturity
Mortgage-backed securities $7,478,613 $ 67,894 $ 12,350 $7,534,157
---------- ------------ ------------ -------------
Total held to maturity $7,478,613 $ 67,894 $ 12,350 $7,534,157
========== ============ ============ =============
</TABLE>
9
<PAGE>
USABANCSHARES, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
JUNE 30, 1996
The following discussion and analysis should be read in conjunction with the
consolidated financial statements and related notes and with the statistical
information and financial data appearing in this report as well as the Company's
1995 Annual Report on Form 10-KSB. Results of operations for the six month
period ended June 30, 1996 are compared to the unaudited results of operations,
of the Bank, only, for the period ended June 30, 1995. Such information is based
upon the historical financial information available as of that date. Results of
operations for the six month period ended June 30, 1996 are not necessarily
indicative of results to be attained for any other period.
RESULTS OF OPERATIONS
NET INCOME
The Company reported net income of $67,259, or $.11 per share, for the six
months ended June 30, 1996. This represents a 400.3% increase in net income,
and a corresponding 400.3% increase in earnings per share as compared to
($22,397) or ($.04) per share loss, for the six months ended June 30, 1995.
Increased net income was primarily the result of increased net interest margins
enhanced by interest earning asset growth. Noninterest income rose mainly due
to a gain on the sale of an investment security. Expenses increased mainly due
to costs associated with the hiring of additional employees as well as the
production of additional earning assets.
NET INTEREST INCOME
Net interest income is the difference between interest income (principally
from loans and investment securities) and interest expense (principally on
customer deposits and borrowings). Changes in net interest income result from
changes in volume, net interest spread and net interest margin. Volume refers
to the average dollar level of interest-earning assets and interest bearing
liabilities. Net interest spread refers to the differences between the average
yield on interest-earning assets and the average cost of interest-bearing
liabilities. Net interest margin refers to net interest income divided by
average interest-earning assets and is influenced by the level and relative mix
of interest-earning assets and interest-bearing liabilities. The company's
profitability, like that of many financial institutions, is dependent to a large
extent upon net interest income. Since the company is asset sensitive, because
interest-earning assets mature or reprice more quickly than interest-bearing
liabilities in a given period, a significant decrease in the market rates of
interest could adversely affect net interest income. In contrast, a rising
interest rate environment could favorably impact the company's margin. Net
interest income for the six months ended June 30, 1996, increased $553,758 or
250.84%, to $774,519 from $220,761 for the same period in 1995. Average
interest-earning assets increased by $6.9 million, or 33.71%, to $27.3 million,
for the six months ended June 30, 1996 compared to the same period in 1995.
Average interest-bearing liabilities increased $2.3 million or 11.78% over the
same period. The average net interest spread increased from 1.88% to 5.30%,
which was caused by the increase in average earning assets as discussed above.
The company's net interest margin for the six months ended June 30, 1996 was
6.15%, an increase of 398 basis points from 2.17% for the comparable period of
1995. The improvement was primarily related to the higher volumes of earning
assets during the six months ended June 30, 1996 compared to the same period
in 1995.
10
<PAGE>
ANALYSIS OF NET INTEREST INCOME
The following table presents information regarding yields on interest-
earning assets, expense on interest-bearing liabilities, and net yields on
interest-earning assets for the periods indicated:
RATE VOLUME ANALYSIS - Six Months Ended June 30,
<TABLE>
<CAPTION>
Year-to-Date
----------------------------------------------------------------------
1996 1995
------------------------------------- ----------------------------------
Average Average Average Average
ASSETS: Balance Interest Rate Balance Interest Rate
----------- ------------ ---------- ----------- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
Interest earning assets:
Loans $ 9,408,015 $ 832,595 17.70% $ 3,521,020 $145,661 8.27%
Investment securities 10,782,518 351,400 6.52% 14,558,199 504,386 6.93%
Interest-bearing deposits and other 4,994,740 144,417 5.78% 2,270,903 30,603 2.70%
----------- ------------ ---------- ----------- ---------- ------
Total earning assets 25,185,272 1,328,412 10.55% 20,350,122 680,650 6.69%
Non interest earning assets 928,513 352,718
----------- -----------
Total assets 26,113,785 20,702,839
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits:
Passbook 2,479,806 32,254 2.60% 2,798,227 33,563 2.40%
NOW accounts 485,309 5,196 2.14% 388,529 4,635 2.39%
Certificates of deposit 18,150,349 516,443 5.69% 15,575,448 408,736 5.25%
Other borrowings - - 0.00% 380,000 12,955 6.82%
----------- ------------ ---------- ----------- ---------- ------
Total interest-bearing liabilities 21,115,464 553,893 5.25% 19,142,203 459,889 4.80%
Other liabilities
Total liabilities 284,165 84,015
----------- -----------
Stockholders' equity 4,714,157 1,476,621
----------- -----------
Total liabilities and stockholders'
equity 26,113,785 20,702,839
----------- -----------
Excess of interest earning assets over ----------- -----------
interest-bearing liabilities 4,069,809 1,207,919
=========== ===========
Net interest income 774,519 220,761
=========== ===========
Effective interest differential (spread) 5.30% 1.88%
---------- ------
Net yield on average interest earning assets 6.15% 2.17%
---------- ------
</TABLE>
PROVISION FOR LOAN LOSSES
Management records the provision for loan losses in amounts that result in
an allowance for loan losses sufficient to cover all potential net charge-offs
and risks believed to be inherent in the loan portfolio. Management's
evaluation includes such factors as past loan loss experience as related to
current loan portfolio mix, evaluation of actual and potential losses in the
loan portfolio, prevailing regional and national economic conditions that might
have an impact on the portfolio, regular reviews and examinations of the loan
portfolio conducted by bank regulatory authorities, and other factors that
management believes deserve current recognition.
As a result of these factors, the provision for loan losses increased
$75,000 during the quarter ended June 30, 1996. The allowance for loan losses as
a percentage of loans and leases outstanding was 1.15% at June 30, 1996,
compared to .85% at year-end 1995 and .26% at June 30, 1995. Management believes
that the allowance for loan losses, which is a general reserve, is adequate to
cover actual and potential losses in the loan portfolio under current
conditions.
11
<PAGE>
Other than as previously noted, management is not aware of any significant
risks in the current loan portfolio due to concentrations of loans within any
particular industry, nor of any separate types of loans within a particular
category of non-performing loans that are unusually significant as to possible
loan losses when compared to the entire loan portfolio. No charge-offs on loans
were recorded during the second quarter of 1996 or for the comparable quarter in
1995.
INTEREST EXPENSE
Total interest expense increased $94,004, or 20.44%, compared to the
comparable period in 1995 due to both higher volumes of certificates of deposit
and higher rates paid on those new volumes. The average cost of funds, including
other borrowings, was 5.25% for the first six months of 1996 compared to 4.80%
over the same period in 1995.
NONINTEREST INCOME
Noninterest income increased $69,598 in the first six months of 1996
compared to the same six months of 1995. Gains on sales of securities
classified as available for sale increased $22,063 during the period. Service
charges on deposit accounts, other service charges, letter of credit fees and
other miscellaneous income accounted for the additional $47,535 during the
period.
OTHER EXPENSE
Other expense increased $459,900 in the first six months of 1996 compared to
the first six months of 1995. Compensation expense increased $284,542 in this
comparison mainly as a result of additions to staff early in the first quarter
of 1996. In addition, occupancy expense increased $15,401 as a result of rental
of additional space for corporate offices. Office, travel and entertainment,
advertising, and depreciation and amortization expenses increased $80,729 due to
the increased efforts to attract additional customers. The increase of $23,735
in professional fees was primarily due to the aquisition of approximately $4.3
million of loans from the FDIC, during second quarter.
LIQUIDITY
The Company's primary sources of funds are customer deposits, maturities of
investment securities, sales of "Available for Sale" securities, loan sales,
loan repayments, net income, advances from the Federal Home Loan Bank of
Pittsburgh, and the use of Federal Funds markets. Scheduled loan repayments are
relatively stable sources of funds while deposit inflows and unscheduled loan
prepayments are not. Deposit inflows and unscheduled loan prepayments are
influenced by general interest rate levels, interest rates available on other
investments, competition, economic conditions, and other factors.
Deposits are the Company's primary source of new funds. Total deposits
were approximately $21.5 million at June 30, 1996, up from approximately
$20.8 million at December 31, 1995. A concerted effort has been made to
attract deposits in the market area it serves through competitive pricing and
delivery of a quality product. Increases over the period are due to
marketing efforts, and new business development programs initiated by
Company. Management anticipates that the Company will continue relying on
customer deposits, maturity of investment securities, sales of "Available for
Sale" securities, loan sales, loan repayments, net income, Federal Funds
markets, and Federal Home Loan Bank ("FHLB") borrowings to provide liquidity.
Although deposit balances have shown historical growth, such balances may be
influenced by changes in the banking industry, interest rates available on
other investments, general economic conditions, competition and other
factors.
12
<PAGE>
Borrowings may be used on a short-term basis to compensate for reductions
in other sources of funds. Borrowings may also be used on a long-term basis
to support expanded lending activities and to match maturities or repricing
intervals of assets. The sources of such funds will be Federal Funds
purchased and borrowings from the FHLB.
CAPITAL RESOURCES
Both the Company and its subsidiary bank are required to comply with
certain "risk-based" capital adequacy guidelines issued by the Federal
Reserve Bank ("FRB") (for the Company) and the FDIC (for the subsidiary). The
risk-based capital guidelines assign varying risk weights to the individual
assets held by a bank. The guidelines also assign weights to the
"credit-equivalent" amounts of certain off-balance sheet items, such as
letters of credit and interest rate and currency swap contracts. Under these
guidelines, institutions are expected to meet minimum ratios for "qualifying
total capital" and tier 1 capital to risk-weighted assets of 8% and 4%
respectively and a minimum leverage ratio (the ratio of tier 1 capital to
total average assets) of 3% plus an additional cushion of between 1% and 2%.
As used in the guidelines, "tier 1 capital" includes common stockholders'
equity, certain qualifying perpetual preferred stock and minority interests
in the equity accounts of consolidated subsidiaries, less goodwill. "Tier 2
capital" components (limited in the aggregate to one-half of total qualifying
capital) include allowances for credit losses (within limits), certain excess
levels of preferred stock and certain types of "hybrid" capital instruments,
subordinated debt and other preferred stock. The subordinated debt component
of tier 2 capital is reduced by 20% per year over the last five years of the
term of the subordinated debt. The following table sets forth the regulatory
capital ratios of the Company and its subsidiary Peoples Thrift Savings Bank
as of June 30, 1996, together with the minimum ratios required under the
regulation for an institution to be deemed "well capitalized". At June 30,
1996, both the Company and its subsidiary were considered "well capitalized"
under FDIC regulations.
Tier 1 Capital Total Capital
to Risk-Weighted to Risk-Weighted
Leverage Ratio (1) Assets Ratio Assets Ratio
------------------- ----------------- ----------------
Entity:
The Company 17.64% 37.06% 38.14%
Peoples Thrift Savings Bank 17.06% 35.41% 36.50%
"Well capitalized" institution
(under FDIC Regulations) 5.00% 6.00% 10.00%
_____________________
(1) The "leverage ratio" is the ratio of tier 1 capital to total average assets.
13
<PAGE>
PART II
ITEM 1. LEGAL PROCEEDINGS
Not applicable
ITEM 2. CHANGES IN SECURITIES
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On , June 28, 1996, the Annual Meeting of stockholders of the Company
was held to elect directors and ratify the appointment of auditors.
With respect to the election of directors, the results were as follows:
NOMINEE: FOR WITHHELD
Bruce W. Kauffman 350,544 10
Leonard A. Sylk 350,554 0
Kenneth L. Tepper 350,554 0
Clarence L. Rader 350,554 0
Carmen J. Cocca, Jr. 350,554 0
Jeffrey A. D'Ambrosio 350,554 0
George C. Fogwell, III 350,554 0
John A. Gambone 350,554 0
George M. Laughlin 350,554 0
Wayne O, Leevy 350,554 0
With respect to the ratification of Grant Thornton, LLP as the
Company's independent auditors, the results were as follows: 350,554
Votes For, 0 Votes Against, and 0 Votes Abstain.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND OTHER INFORMATION ON FORM 8-K
None
14
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) 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, in the City of Philadelphia,
Commonwealth of Pennsylvania.
USABANCSHARES, INC.
Date: July 13, 1996 By: /s/ Kenneth L. Tepper
---------------------------
Kenneth L. Tepper,
President and Chief Executive Officer
(Principal Executive Officer)
Date: July 13, 1996 By: /s/ David J. Torpey
---------------------------
David J. Torpey,
Vice President and Chief Financial Officer
(Principal Accounting and Financial Officer)
15
<PAGE>
In accordance with the Securities Exchange Act of 1934, this Report has
been duly signed below by the following persons on behalf of the Registrant
in the capacities and on the dates indicated.
July ___, 1996 /s/ Bruce W. Kauffman
---------------------------
Bruce W. Kauffman
Chairman of the Board
July ___, 1996 /s/ Leonard A. Sylk
---------------------------
Leonard A. Sylk
Director
July ___, 1996 /s/ Carmen Cocca
---------------------------
Carmen Cocca
Director
July ___, 1996 /s/ Jeffrey A. D'Ambrosio
---------------------------
Jeffrey A. D'Ambrosio
Director
July ___, 1996 /s/ George C. Fogwell
---------------------------
George C. Fogwell
Director
July ___, 1996 /s/ John A. Gambone
---------------------------
John A. Gambone
Director
July ___, 1996 /s/ George M. Laughlin
---------------------------
George M. Laughlin
Director
July ___, 1996 /s/ Clarence L. Rader
---------------------------
Clarence L. Rader
Director of Company
Vice Chairman of Bank
16
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<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
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0
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