-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DWMcEiddIaGaws/sfv3nwM+RCmjkiH/RZdfPfw5/fKhJEhr1CUAabO7hG9gQcKns Zl6D7S7eV2lp1zT4cebzOw== 0000950156-99-000693.txt : 19991117 0000950156-99-000693.hdr.sgml : 19991117 ACCESSION NUMBER: 0000950156-99-000693 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHWAY FINANCIAL INC CENTRAL INDEX KEY: 0001041753 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 043368379 STATE OF INCORPORATION: NH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-23129-33 FILM NUMBER: 99751920 BUSINESS ADDRESS: STREET 1: 9 MAIN ST CITY: BERLIN STATE: NH ZIP: 03750 BUSINESS PHONE: 6037521171 MAIL ADDRESS: STREET 1: 9 MAIN ST CITY: BERLIN STATE: NH ZIP: 03750 10-Q 1 NORTHWAY FIN. FORM 10-Q 9-30-99 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended September 30, 1999 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 000-23129 NORTHWAY FINANCIAL, INC (Exact name of registrant as specified in its charter) New Hampshire 04-3368579 State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 9 Main Street Berlin, New Hampshire 03570 Address of principal executive offices (Zip Code) (603) 752-1171 (Registrant's telephone number, including area code) No Change (Former name, former address and former fiscal year, if changed since last year) 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 twelve (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 ninety (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 practical date. At October 29, 1999, there were 1,648,169 shares of common stock outstanding, par value $1.00 per share. INDEX NORTHWAY FINANCIAL, INC. PART I. FINANCIAL INFORMATION PAGE Item 1. Financial Statements (Unaudited) Consolidated Statements of Income for the Three Months and Nine Months Ended September 30, 1999 and 1998 ........................................................ 3 Consolidated Balance Sheets at September 30, 1999 and December 31, 1998 ........................................... 4 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 1999 and 1998 ........................ 5 Notes to Consolidated Financial Statements ...................... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ............................. 8 Item 3. Quantitative and Qualitative Disclosures about Market Risk ..................................................... 12 PART II. OTHER INFORMATION Item 1. Legal Proceedings ............................................... 13 Item 2. Changes in Securities ........................................... 13 Item 3. Defaults Upon Senior Securities ................................. 13 Item 4. Submission of Matters to a Vote of Security Holders ............. 13 Item 5. Other Information ............................................... 13 Item 6. Exhibits and Reports on Form 8-K ................................ 13 Signatures ............................................................... 14 PART 1. FINANCIAL INFORMATION Item 1. Financial Statements.
NORTHWAY FINANCIAL, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Nine Months Ended September 30, Ended September 30, (Dollars in thousands, except per share data) 1999 1998 1999 1998 - ---------------------------------------------------------------------------------------------------------------------------- Interest and dividend income: Loans $ 6,967 $ 6,208 $ 19,201 $ 18,107 Investment securities available-for-sale 823 836 2,424 2,547 Investment securities held-to-maturity 137 169 423 530 Federal funds sold 9 163 228 547 Interest bearing deposits 2 2 5 4 ---------- ---------- ---------- ---------- Total interest and dividend income 7,938 7,378 22,281 21,735 ---------- ---------- ---------- ---------- Interest expense: Deposits 2,514 2,717 7,438 8,077 Borrowed funds 365 213 804 646 ---------- ---------- ---------- ---------- Total interest expense 2 ,879 2,930 8,242 8,723 ---------- ---------- ---------- ---------- Net interest and dividend income 5,059 4,448 14,039 13,012 Provision for loan losses 135 135 405 405 ---------- ---------- ---------- ---------- Net interest and dividend income after provision for loan losses 4,924 4,313 13,634 12,607 ---------- ---------- ---------- ---------- Noninterest income: Service charges on deposit accounts and fees 232 206 683 623 Securities gains, net 85 16 496 408 Other 338 175 808 463 ---------- ---------- ---------- ---------- Total noninterest income 655 397 1,987 1,494 ---------- ---------- ---------- ---------- Noninterest expense: Salaries and employee benefits 2,227 1,650 6,265 4,783 Office occupancy and equipment 670 492 1,908 1,414 Amortization of deposit purchase premium 104 75 254 226 Other 1,139 930 3,229 2,686 ---------- ---------- ---------- ---------- Total noninterest expense 4,140 3,147 11,656 9,109 ---------- ---------- ---------- ---------- Income before income tax expense 1,439 1,563 3,965 4,992 Income tax expense 483 516 1,352 1,683 ---------- ---------- ---------- ---------- Net income $ 956 $ 1,047 $ 2,613 $ 3,309 ========== ========== ========== ========== Comprehensive net income $ 683 $ 1,182 $ 1,639 $ 3,486 ========== ========== ========== ========== Per share data: Earnings per common share $ 0.58 $ 0.60 $ 1.55 $ 1.91 Cash dividends declared $ 0.14 $ 0.14 $ 0.42 $ 0.28 Weighted average number of common shares 1,661,223 1,731,969 1,690,097 1,731,969 The accompanying notes are an integral part of these consolidated financial statements.
NORTHWAY FINANCIAL, INC. CONSOLIDATED BALANCE SHEETS Sept. 30, Dec. 31, (Dollars in thousands, except per share data) 1999 1998 - -------------------------------------------------------------------------------- (Unaudited) (Audited) Assets Cash and due from banks and interest bearing deposits $ 11,972 $ 14,948 Federal funds sold -- 36,475 Investment securities available-for-sale 55,583 50,567 Investment securities held-to-maturity 11,107 6,509 Loans held for sale 450 535 Loans 349,226 284,158 Unearned income (720) (332) Allowance for loan losses (4,761) (4,404) -------- -------- Loans, net 343,745 279,422 -------- -------- Real estate acquired by foreclosure 172 158 Accrued interest receivable 2,142 1,846 Deferred income tax asset, net 1,959 1,222 Premises and equipment, net 10,267 9,963 Deposit purchase premium 1,393 860 Other assets 3,915 1,467 -------- -------- Total assets $442,705 $403,972 ======== ======== Liabilities and Stockholders' Equity Liabilities: Interest bearing deposits $301,460 $305,113 Non-interest bearing deposits 50,847 45,808 Securities sold under agreements to repurchase 8,972 6,791 Short-term Federal Home Loan Bank advances 12,950 1,583 Long-term Federal Home Loan Bank advances 24,528 1,528 Other liabilities 4,360 2,193 -------- -------- Total liabilities 403,117 363,016 -------- -------- Stockholders' equity: Preferred stock, $1 par value; 1,000,000 shares authorized; none issued -- -- Common stock, $1 par value; 9,000,000 shares authorized; 1,731,969 shares issued and 1,653,169 outstanding September 30, 1999 and 1,729,969 outstanding December 31, 1998 1,732 1,732 Additional paid-in-capital 2,101 2,101 Retained earnings 38,986 37,084 Treasury stock, at cost (78,800 and 2,000 shares, respectively) (2,351) (55) Accumulated other comprehensive (loss) income, net of tax (880) 94 -------- -------- Total stockholders' equity 39,588 40,956 -------- -------- Total liabilities and stockholders' equity $442,705 $403,972 ======== ======== The accompanying notes are an integral part of these consolidated financial statements. NORTHWAY FINANCIAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Nine Months Ended September 30, (Dollars in thousands) 1999 1998 - -------------------------------------------------------------------------------- Cash flows from operating activities: Net income $ 2,613 $ 3,309 Adjustments to reconcile net income to net cash provided by operating activities: Provision for: Loan losses 405 405 Depreciation and amortization 933 828 Deferred income taxes (123) 5 Write-down of real estate acquired by foreclosure 39 5 Gains on sales of investment securities available-for-sale, net (496) (408) Amortization of premium on investment and mortgage-backed securities, net 64 97 Increase (decrease) in unearned income, net 388 (135) Gains on sales of real estate acquired by foreclosure -- (83) Net decrease (increase) in loans held for sale 85 (330) (Increase) decrease in accrued income receivable (296) 61 (Increase) in other assets (2,448) (4,182) Increase in other liabilities 2,167 3,667 --------- --------- Net cash provided by operating activities 3,331 3,239 --------- --------- Cash flows from investing activities: Proceeds from sales of investment securities available-for-sale 5,038 3,059 Proceeds from maturities of investment securities held-to-maturity 3,160 4,686 Proceeds from maturities of investment securities available-for-sale 4,896 18,000 Purchase of investment securities available-for-sale (20,561) (19,974) Purchase of investment securities held-to-maturity (9,242) (6,827) Principal payments received on investment securities held-to-maturity 1,452 -- Principal payments received on investment securities available-for-sale 4,487 3,951 Net increase in loans (65,468) (12,987) Proceeds from sales of real estate acquired by foreclosure 299 418 Additions to deposit purchase premium (787) -- Additions to premises and equipment (983) (1,359) --------- --------- Net cash used in investing activities (77,709) (11,033) --------- --------- Cash flows from financing activities: Cash received from acquisition of branches 18,040 -- Net (decrease) increase in deposits (16,654) 7,956 Advances from Federal Home Loan Bank 315,200 3,041 Repayment of Federal Home Loan Bank advances (280,833) (6,252) Net increase in securities sold under agreements to repurchase 2,181 679 Purchases of treasury stock (2,296) -- Cash dividends paid (711) (485) --------- --------- Net cash provided by financing activities 34,927 4,939 --------- --------- Net decreases in cash and cash equivalents (39,451) (2,855) Cash and cash equivalents at beginning of period 51,423 31,396 --------- --------- Cash and cash equivalents at end of period $ 11,972 $ 28,541 ========= ========= Cash paid during the period for: Interest $ 8,098 $ 9,153 ========= ========= Income taxes $ 1,429 $ 1,628 ========= ========= Supplemental disclosures of non-cash activities: Loans transferred to real estate acquired by foreclosure $ 352 $ 336 ========= ========= Loans charged off, net of recoveries $ 48 $ 175 ========= ========= Financed sales of real estate acquired by foreclosure $ 44 $ 267 ========= ========= The accompanying notes are an integral part of these consolidated financial statements. NORTHWAY FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 1999 (Unaudited) 1. Basis of Presentation. The unaudited consolidated financial statements of Northway Financial, Inc. and its two wholly owned bank subsidiaries (collectively "the Corporation") included herein have been prepared by the Corporation in accordance with the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The Corporation, however, believes that the disclosures are adequate to make the information presented not misleading. The amounts shown reflect, in the opinion of management, all adjustments necessary for a fair presentation of the financial statements for the periods reported. The results of operations for the three and nine month periods ended September 30, 1999 and 1998 are not necessarily indicative of the results of operations to be expected for the full year or any other interim periods. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation Introduction The following discussion and analysis and related consolidated financial statements include Northway Financial, Inc. and its wholly-owned subsidiaries, The Berlin City Bank and Pemigewasset National Bank (collectively the "Corporation"). Certain statements in this Form 10-Q are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward looking statements may include, but are not limited to, projections of revenue, income or loss, plans for future operations and acquisitions, plans related to products or services of the Corporation and its subsidiaries, and the statements made in the Year 2000 discussion. Such forward looking statements are subject to known and unknown risks, uncertainties and contingencies, many of which are beyond the control of the Corporation. To the extent any such risks, uncertainties and contingencies are realized, the Corporation's actual results, performance or achievements could differ materially from anticipated results, performance or achievements. Factors that might affect such forward looking statements include, among other things, overall economic and business conditions, the demand for the Corporation's products and services, competitive factors in the industries in which the Corporation competes, changes in government regulations, the timing, impact and other uncertainties of future acquisitions, and the Corporation's handling of the Year 2000 issue. Financial Condition On July 9, 1999, the Corporation, through its Pemigewasset National Bank subsidiary, completed the purchase of two branch offices from the Vermont National Bank. The branches, located in Franklin and Tilton, New Hampshire, hold deposits totaling approximately $18.0 million. Proceeds from the assumption of deposit liabilities pursuant to the branch purchase were used to pay down short term debt to the Federal Home Loan Bank of Boston. The Corporation's total assets at September 30, 1999 were $442.7 million compared to $404.0 million at December 31, 1998, a $38.7 million increase. Net loans, including loans held for sale, increased $64.2 million to $344.2 million, principal because installment loans outstanding, primarily indirect auto, increased $50.5 million during this period. Investment securities, primarily U.S. Government Agency and municipal obligations, increased $9.6 million to $66.7 million. Cash and cash equivalents decreased $39.5 million to $12.0 million as a result of the increases in loan and investment securities balances. Total deposits increased $1.4 million. The increase was primarily caused by the purchase of the two branches described above. The increase in deposits from the branch purchase was offset by a withdrawal of a $14.5 million temporary money market deposit on January 6, 1999 which was deposited on December 31, 1998. Federal Home Loan Bank advances increased $34.4 million while repurchase agreements increased $2.2 million. Total stockholders equity declined $1.4 million from $41.0 million at December 31, 1998 to $39.6 million at September 30, 1999. The decline in stockholders' equity was a result of treasury share purchases totaling $2.3 million, dividend payments of $0.7 million and a decline in the market value of securities available for sale of $1.0 million. This decrease in stockholders' equity was partially offset by net income of $2.6 million. The Corporation maintains an allowance for loan losses to absorb future charge-offs of loans in the existing portfolio. The allowance is increased when a loan loss provision is recorded as an expense in the income statement. When a loan, or portion thereof, is considered uncollectible, it is charged against this allowance. Recoveries of amounts previously charged off are added to the allowance when collected. At September 30, 1999 the allowance for loan losses was $4.8 million, or 1.36% of total loans, as compared to $4.4 million, or 1.55% of total loans at December 31, 1998. The adequacy of the allowance for loan losses was based on an evaluation by each bank's management and Board of Directors of current and anticipated economic conditions, changes in the diversification, size and risk within the loan portfolio, and other factors. An analysis of the allowance for loan losses for the three month and nine month periods ended September 30, 1999 and 1998 is as follows: Three Months Nine Months Ended September 30, Ended September 30, (Dollars in thousands) 1999 1998 1999 1998 - -------------------------------------------------------------------------------- Balance at beginning of period $4,637 $4,344 $4,404 $4,156 ------ ------ ------ ------ Charge-offs (98) (131) (264) (381) Recoveries 87 38 216 206 ------ ------ ------ ------ Net Charge-offs (11) (93) (48) (175) Provision for loan losses 135 135 405 405 ------ ------ ------ ------ Balance at end of period $4,761 $4,386 $4,761 $4,386 ====== ====== ====== ====== Nonperforming loans totaled $1.7 million as of September 30, 1999, compared to $2.5 million at December 31, 1998. The ratio of nonperforming loans to total loans was 0.48% as of September 30, 1999 compared to 0.90% at December 31, 1998 and the ratio of nonperforming assets to total assets was 0.42% as of September 30, 1999 compared to 0.67% at December 31, 1998. Results of Operations The Corporation reported net income of $956 thousand, or $0.58 per share, for the three months ended September 30, 1999, versus $1,047 thousand, or $0.60 per common share, for the three months ended September 30, 1998. Net income for the nine months ended September 30, 1999 was $2.6 million, or $1.55 per share, as compared to $3.3 million, or $1.91 per share, for the nine months ended September 30, 1998. The decrease in net income is a result of the implementation of several strategic initiatives in 1998 that have increased noninterest expense and reduced short term earnings in 1999. These initiatives include the opening of new branches in Conway Village and Tilton, New Hampshire; the creation of a statewide indirect lending program; and an expansion of the Corporation's traditional lending programs. Additional staffing and office facilities required by these initiatives is the primary cause for the increases in salaries and benefits and occupancy and equipment expenses. Net interest income for the third quarter increased $611 thousand to $5.0 million as compared to $4.4 million for the third quarter of the prior year. For the nine months ended September 30, 1999 net interest income increased $1.0 million to $14.0 million as compared to $13.0 million for the same period of the prior year. The increase is a result of higher average loan balances which enabled the Corporation to maintain the level of interest income while interest expense decreased due to a more favorable deposit mix and lower interest rates. Noninterest income increased $258 thousand to $655 thousand in the third quarter of 1999 versus $397 thousand in the third quarter of 1998. For the nine months ended September 30, 1999 noninterest income increased $0.5 million to $2.0 million as compared to $1.5 million for the same period of the prior year. The increase was primarily attributable to increases in security gains and increases in other noninterest income items resulting from the imposition of an ATM surcharge, the creation of mortgage servicing assets and loan fees. Noninterest expense increased $1.0 million to $4.1 million for the quarter ended September 30, 1999 compared to the $3.1 million recorded during the same period last year. For the nine months ended September 30, 1999 noninterest expense totaled $11.7 million, an increase of $2.6 million over the $9.1 million recorded for the same period of the prior year. The increase was principally attributable to the implementation of the strategic initiatives outlined above. Income Tax Expense The Corporation recognized income tax expense of $1.4 million and $1.7 million for the nine months ended September 30, 1999 and 1998, respectively. The effective tax rate was 34.1% and 33.7% for those respective periods. The increase in the effective tax rate is due to the fact that on April 29, 1999 New Hampshire adopted a new tax law that increased the rate of the Business Profits Tax from seven to eight percent of income. The tax applies to the Corporation's 1999 fiscal year. Liquidity Liquidity risk management refers to the Corporation's and its subsidiaries' ability to raise funds in order to meet their existing and anticipated financial obligations. These obligations are the withdrawal of deposits on demand or at their contractual maturity, the repayment of borrowings as they mature, the ability to fund new and existing loan commitments and the ability to take advantage of new business opportunities. Liquidity may be provided through amortization, maturity or sale of assets such as loans and securities available-for-sale, liability sources such as increased deposits, utilization of the FHLB credit facility, purchased or other borrowed funds, and access to the capital markets. Liquidity targets are subject to change based on economic and market conditions and are controlled and monitored by the Corporation's Asset/Liability Committee. At the subsidiary bank level, liquidity is managed by measuring the net amount of marketable assets after deducting pledged assets, plus lines of credit, primarily with the FHLB, which are available to fund liquidity requirements. Management then measures the adequacy of that aggregate amount relative to the aggregate amount of liabilities deemed to be sensitive or volatile liabilities. These include core deposits in excess of $100,000, term deposits with short maturities, and credit commitments outstanding. Additionally, the parent holding company requires cash for various operating needs including dividends to shareholders, the stock repurchase program, capital injections to the subsidiary banks, and the payment of general corporate expenses. The primary source of liquidity for the parent holding company is dividends from the subsidiary banks. The Corporation's current level of liquidity and funds availability from outside sources are sufficient to meet the Corporation's needs, however the Corporation has been successful in its efforts to increase its lending capabilities and may need to identify additional sources of liquidity as the loan portfolio builds. Capital The Corporation's Tier 1 and Total Risk Based Capital ratios were 12.76% and 14.01%, respectively, at September 30, 1999. The Corporation's leverage ratio at September 30, 1999 was 9.13%. As of September 30, 1999, the capital ratios of the Corporation and all its subsidiary banks exceeded the minimum capital ratio requirements of the "well capitalized" category under the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA). Impact of the Year 2000 Issue The statements in the following section include "Year 2000 readiness disclosures" within the meaning of the Year 2000 Information and Readiness Disclosure Act. There is considerable concern over the ability of many computer software programs to function when the year 2000 arrives. This concern arises because many existing programs use only the last two digits to refer to the year. As such, programs do not recognize the difference between a year that begins with "20" instead of the current "19." The Corporation has developed a Year 2000 strategic plan and a Year 2000 test plan. The Corporation appointed a dedicated Year 2000 project manager. Each of the Corporation's subsidiary banks have Year 2000 action teams. These teams and the Year 2000 project manager work together closely. The first phase of this project called for the identification of all information and non information technology systems, both in house and those provided by third party vendors. All systems have been identified. The second phase was to complete a risk analysis assessment of each information and non information technology system. This second phase has been completed. The third phase was to renovate the information and non information technology systems to ensure Year 2000 compliance based upon conclusions reached in the risk analysis assessment phase. Renovation of the subsidiary banks' core operating hardware was completed on September 19, 1998. Renovation of the banks' core operating software was completed on October 10, 1998. Renovations to the critical mission operating systems was completed by March 31, 1999. The fourth phase was to validate the renovations to the system. The testing of the core operating systems was substantially completed by December 31, 1998. The Corporation hired an outside independent third party to review the Corporation's validation and testing procedures. Validation of the core operating systems was completed on March 31, 1999. The fifth phase was to implement Year 2000 compliant systems. The Corporation believes that all mission critical systems are now operating on a Year 2000 compliant basis. The Corporation has identified both customers and vendors with whom it has a material relationship and has determined that the risk that these third party relationships pose to the Corporation is low. For those customers where a borrowing relationship exists, the subsidiary banks have completed a customer risk assessment to determine the status of their Year 2000 efforts. The Corporation has developed a Year 2000 budget which includes administration, cost of new technology and the cost of testing. Total expenses from Year 2000 compliance are estimated to be $263,000 a $6,000 increase over the Corporation's prior estimate. Actual expenses incurred to date are $202,000. Expenses incurred to date in 1999 are $123,000 and it is projected that total Year 2000 expense in 1999 will approximate $162,000, a $16,000 decrease over the prior estimate. The development of a Business Resumption Contingency Plan, to deal with the Corporation's worst case scenario, loss of electric power, has been completed. Contingency planning teams have been appointed and are led by the Year 2000 project manager. The Corporation hired an outside independent third party to assist the Corporation in preparing the contingency plan. The four phases to the plan include developing organization planning guidelines, performing a business impact analysis, drafting a business resumption contingency plan and validating the plan. Should the Corporation's worst case scenario, the loss of electric power, occur, the Corporation now has in place an electric generator at its operations center. This should allow the Corporation to continue to run its core operating system. Transactions that would be performed at a number of the Corporation's locations would then have to be transported to the operations center for input. This would continue until such time as electric power is restored. The Year 2000 project manager provides progress reports to the Corporation's and the subsidiary banks' Boards of Directors on a monthly basis. The Corporation's subsidiary banks are subject to regulation by the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. In the event the Corporation's efforts as described above fail to adequately resolve any such Year 2000 issues affecting the Corporation's subsidiary banks, the Corporation could be subject to formal supervisory or enforcement actions by their respective regulators. Item 3. Quantitative and Qualitative Disclosures About Market Risk For information regarding quantitative and qualitative disclosures about market risk, see the Corporation's discussion under Item 7A of its Annual Report on Form 10-K for the fiscal year ended December 31, 1998. Between December 31, 1998 and September 30, 1999, there were no material changes in the Corporation's market risk. PART II. OTHER INFORMATION Item 1. Legal Proceedings - None Item 2. Changes in Securities - None Item 3. Defaults upon Senior Securities - None Item 4. Submission of Matters to a Vote of Security Holders - None Item 5. Other Information - None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit Number (27) Financial Data Schedule (b) The Corporation did not file any Reports on Form 8-K during the quarter ended September 30, 1999. SIGNATURES Pursuant to 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. NORTHWAY FINANCIAL, INC. November 12, 1999 BY: \S\ William J. Woodward ------------------- William J. Woodward President & CEO (Principal Executive Officer) November 12, 1999 BY: \S\ George L. Fredette ------------------- George L. Fredette Senior Vice President & CFO (Principal Financial and Accounting Officer) EX-27 2 FINANCIAL DATA SCHEDULE
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AND INCOME STATEMENT AND FROM THE MANAGEMENT DISCUSSION AND ANALYSIS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND MANAGEMENT DISCUSSION. 1,000 9-Mos DEC-31-1998 SEP-30-1999 11,877 95 0 0 55,583 11,107 11,079 348,956 4,761 442,705 352,307 21,922 4,360 24,528 0 0 1,732 37,856 442,705 19,201 2,847 233 22,281 7,438 8,242 14,039 405 496 11,656 3,965 3,965 0 0 2,613 1.55 1.55 7.96 1,683 0 1,236 0 4,404 264 216 4,761 3,571 0 1,190
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