-----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, Nq2EsEPCTgPjf35nE7dKAqi3R0+DpQcIqqYB8UfHXOERBPgHFfXZ96ufLpJLcGr8 Ia4BMCPfm/+6GHMgcL95QA== 0000742170-98-000019.txt : 19980812 0000742170-98-000019.hdr.sgml : 19980812 ACCESSION NUMBER: 0000742170-98-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980811 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMMUNITY BANCORP INC /MA/ CENTRAL INDEX KEY: 0000742170 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 042841993 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-12756-B FILM NUMBER: 98682105 BUSINESS ADDRESS: STREET 1: 17 POPE ST CITY: HUDSON STATE: MA ZIP: 01749 BUSINESS PHONE: 5085688321 MAIL ADDRESS: STREET 1: 17 POPE STREET CITY: HUDSON STATE: MA ZIP: 01749 10-Q 1 FORM 10-Q FOR 06-30-98 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED JUNE 30, 1998 Commission File No. 33-12756-B COMMUNITY BANCORP, INC. A Massachusetts Corporation IRS Employer Identification No. 04-2841993 17 Pope Street, Hudson, Massachusetts 01749 Telephone - (978) 568-8321 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 --- --- Common Stock $2.50 par value 2,944,588 shares outstanding as of July 31, 1998 PART I - FINANCIAL INFORMATION COMMUNITY BANCORP, INC. Item 1. CONSOLIDATED BALANCE SHEETS
June 30, December 31, 1998 1997 ------------ ------------ ASSETS Cash and due from banks $ 15,433,367 $ 16,704,667 Federal funds sold 27,500,000 14,600,000 Securities available for sale, at market 32,618,632 38,880,166 Securities held to maturity (market value $73,609,454 at 6/30/98 and $56,404,323 at 12/31/97) 73,245,552 56,304,224 Mortgage loans held for sale 2,227,986 2,173,322 Loans 135,467,862 139,839,853 Less allowance for possible loan losses 3,125,204 3,215,559 ----------- ----------- Total net loans 132,342,658 136,624,294 Premises and equipment, net 4,771,593 4,637,965 Other assets, net 3,479,564 3,625,889 ----------- ----------- Total assets $291,619,352 $273,550,527 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits Noninterest bearing $ 58,211,021 $ 55,678,794 Interest bearing 184,757,920 177,109,740 ----------- ----------- Total deposits 242,968,941 232,788,534 Federal funds purchased and securities sold under repurchase agreements 22,849,432 16,637,064 Other liabilities 1,679,260 1,688,830 ----------- ----------- Total liabilities 267,497,633 251,114,428 Stockholders' equity: Preferred stock, $2.50 par value, 100,000 shares authorized, none issued or outstanding Common stock, $2.50 par value, 12,000,000 shares authorized, 3,199,218 shares issued, 2,944,588 share outstanding, (2,926,257 shares outstanding at 12/31/97) 7,998,045 7,998,045 Surplus 524,106 414,120 Undivided profits 17,864,737 16,418,790 Treasury stock, at cost, 254,630 shares, (272,961 shares at 12/31/97) (2,364,573) (2,529,552) Accumulated other comprehensive income 99,404 134,696 Total stockholders' equity 24,121,719 22,436,099 ----------- ----------- Total liabilities and stockholders' equity $291,619,352 $273,550,527 =========== =========== See accompanying notes.
-2- COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME
Three months ended Six months ended June 30, June 30, --------------------- --------------------- 1998 1997 1998 1997 ---------- ---------- ---------- ---------- Interest income: Interest and fees on loans $3,270,641 $3,256,817 $6,617,533 $6,352,283 Interest and div. on securities: Taxable interest 1,368,854 1,310,265 2,646,613 2,609,664 Nontaxable interest 119,728 75,617 214,695 138,616 Dividends 15,247 13,655 31,917 28,732 Interest on federal funds sold 265,544 69,520 450,435 156,032 --------- --------- --------- --------- Total interest income 5,040,014 4,725,874 9,961,193 9,285,307 --------- --------- --------- --------- Interest expense: Deposits 1,663,439 1,492,635 3,273,059 2,966,537 Short term borrowings 230,067 198,231 426,221 363,563 --------- --------- --------- --------- Total interest expense 1,893,506 1,690,866 3,699,280 3,330,100 --------- --------- --------- --------- Net interest income 3,146,508 3,035,008 6,261,913 5,955,207 Provision for loan losses 0 0 0 0 --------- --------- --------- --------- Net interest income after provision for loan losses 3,146,508 3,035,008 6,261,913 5,955,207 --------- --------- --------- --------- Noninterest income: Merchant credit card assessments 288,920 243,806 593,125 492,592 Service charges 149,661 161,096 297,839 315,125 Other charges, commissions, fees 244,405 235,856 511,592 428,355 Gains on sales of loans, net 103,801 13,401 146,529 15,986 Gains (losses) on sales of securities, net 0 11,012 0 (1,864) Other 20,464 7,666 40,767 41,223 --------- --------- --------- --------- Total noninterest income 807,251 672,837 1,589,852 1,291,417 --------- --------- --------- --------- Noninterest expense: Salaries and benefits 1,246,516 1,168,189 2,507,595 2,357,574 Data processing 136,319 147,841 284,976 291,620 Occupancy, net 138,991 142,375 283,556 275,123 Furniture and equipment 113,415 102,608 230,402 202,979 Credit card processing 261,308 204,988 504,214 405,546 Other 505,728 623,203 1,028,663 1,138,835 --------- --------- --------- --------- Total noninterest expense 2,402,277 2,389,206 4,839,406 4,671,677 --------- --------- --------- --------- Income before income taxes 1,551,482 1,318,639 3,012,359 2,574,947 Income taxes 568,187 493,881 1,108,468 974,374 --------- --------- --------- --------- Net income $ 983,295 $ 824,758 $1,903,891 $1,600,573 ========= ========= ========= ========= Earnings per common share $ .335 $ .280 $ .649 $ .545 Dividends per share $ .079 $ .070 $ .156 $ .138 Weighted average number of shares 2,937,739 2,941,845 2,932,030 2,938,448 See accompanying notes.
-3- COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three months ended Six months ended June 30, June 30, --------------------- --------------------- 1998 1997 1998 1997 --------- --------- --------- --------- Net income $ 983,295 $ 824,758 $1,903,891 $1,600,573 Other comprehensive income: Unrealized securities gains (losses) arising during period (73,665) 81,161 (64,290) 20,482 Income tax (expense) benefit on securities gains (losses) arising during period 32,961 (34,172) 28,998 (8,083) -------- -------- --------- --------- Net unrealized securities gains (losses) arising during period (40,704) 46,989 (35,292) 12,399 -------- -------- --------- --------- Less: reclassification adjustment for securities (gains) losses included in income 0 (11,012) 0 1,864 Income tax expense (benefit) on securities (gains) losses included in income 0 4,658 0 (788) -------- -------- --------- --------- Net reclassification adjustments for securities (gains) losses included in net income 0 (6,354) 0 1,076 -------- -------- --------- --------- Other comprehensive income (40,704) 40,635 (35,292) 13,475 -------- -------- --------- --------- Comprehensive income $ 942,591 $ 865,393 $1,868,599 $1,614,048 ======== ======== ========= ========= See accompanying notes.
-4- COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended June 30, -------------------------- 1998 1997 ----------- ----------- Cash flows from operating activities: Interest received $ 9,845,170 $ 9,062,384 Fees and commissions received 1,741,754 1,261,225 Proceeds from secondary market mortgage sales 23,286,797 4,108,857 Origination of mortgage loans for secondary market sales (22,845,447) (4,369,944) Interest paid (3,704,455) (3,371,741) Cash paid to suppliers & employees (4,662,779) (4,271,528) Income taxes paid (1,158,380) (1,011,010) ---------- ---------- Net cash provided by operating activities 2,502,660 1,408,243 ---------- ---------- Cash flows from investing activities: Maturities and principal repayments of securities available for sale 6,281,845 2,839,300 Maturities and principal repayments of securities held to maturity 12,753,012 6,017,668 Sales of securities available for sale 0 2,004,596 Purchases of securities available for sale (84,600) (10,068,750) Purchases of securities held to maturity (29,694,341) (6,029,533) Net change in federal funds sold (12,900,000) 4,600,000 Net change in loans and other real estate owned 4,215,306 (5,629,058) Proceeds from sales of other real estate owned 0 15,600 Acquisition of property, plant and equipment (568,130) (426,416) ---------- ---------- Net cash used in investing activities (19,996,908) (6,676,593) ---------- ---------- Cash flows from financing activities: Net change in deposits 10,180,406 1,006,456 Net change in federal funds purchased (3,000,000) 0 Net change in repurchase agreements 9,212,368 8,681,147 Sale of treasury stock 274,965 150,019 Dividends paid (444,791) (393,290) ---------- ---------- Net cash provided by financing activities 16,222,948 9,444,332 ---------- ---------- Net increase in cash and due from banks (1,271,300) 4,175,982 Cash and due from banks at beginning of period 16,704,667 14,391,567 ---------- ---------- Cash and due from banks at end of period $15,433,367 $18,567,549 ========== ========== See accompanying notes.
-5- COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Reconciliation of Net Income to Net Cash Provided by Operating Activities
Six months ended June 30, -------------------------- 1998 1997 ----------- ----------- Net income $ 1,903,891 $ 1,600,573 Adjustments to reconcile net income to net cash provided by operating activities: Decrease (increase) in mortgage loans held for sale 330,898 (329,294) Premium on sale of mortgages 110,452 68,207 Depreciation and amortization 434,503 394,158 (Decrease) increase in other liabilities (257,869) 5,992 (Increase) in taxes payable (49,912) (36,636) (Decrease) in interest payable (5,175) (41,641) Decrease (increase) in other assets 151,895 (30,192) (Increase) in interest receivable (116,023) (222,924) ---------- ---------- Total adjustments 598,769 (192,330) ---------- ---------- Net cash provided by operating activities $ 2,502,660 $ 1,408,243 ========== ========== See accompanying notes.
-6- COMMUNITY BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 1998 _________________________________________________________________________ 1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for any interim period are not necessarily indicative of results expected for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report to shareholders and Form 10-K for the year ended December 31, 1997. 2. EARNINGS PER SHARE The Company adopted Financial Accounting Standards Board Statement No. 128, "Earnings Per Share" (SFAS No. 128), effective December 31, 1997. This Statement requires the presentation of "basic" earnings per share, which excludes the effect of dilution, and "diluted" earnings per share, which includes the effect of dilution. The Company's "basic" and "diluted" earnings per share computations are identical in the periods presented, as there is no dilution effect. Earnings per share is based on the weighted average number of shares outstanding during the period. 3. COMPREHENSIVE INCOME The Company adopted Financial Accounting Standards Board Statement No. 130, "Reporting Comprehensive Income" (SFAS No. 130), effective January 1, 1998. Components of comprehensive income are net income and all other non-owner changes in equity. The Statement requires that an enterprise (a) classify items of other comprehensive income by their nature in a financial statement and (b) display the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of a statement of financial position. Reclassification of financial statements for earlier periods provided for comparative purposes is required. The Company has chosen to disclose comprehensive income in the Consolidated Statements of Comprehensive Income. Prior year data has been restated to conform to the requirements of SFAS No. 130. -7- 4. OPERATING SEGMENTS The Company adopted Financial Accounting Standards Board Statement No. 131, "Disclosures About Segments of an Enterprise and Related Information", (SFAS No. 131), effective January 1, 1998. This Statement establishes standards for reporting information about segments in annual and interim financial statements. SFAS No. 131 introduces a new model for segment reporting called the "management approach". The management approach is based on the way the chief operating decision-maker organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure and any other in which management disaggregates a company. Based on the "management approach" model, the Company has determined that its business is comprised of a single operating segment and that SFAS No. 131 therefore has no impact on its financial statements. 5. RECLASSIFICATIONS Certain amounts in the prior period's financial statements have been reclassified to be consistent with the current period's presentation. The reclassifications have no effect on net income. -8- PART I - FINANCIAL INFORMATION Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SUMMARY The Company recorded net income of $1,903,891 for the six months ended June 30, 1998, representing an increase of $303,318 or 19.0% over $1,600,573 for the six months ended June 30, 1997. Earnings per share of $.649 for the current period represented an increase of $.104 from $.545 for the corresponding period in 1997. The Company recorded net income of $983,295 for the three months ended June 30, 1998, representing an increase of $158,537 or 19.2% over $824,758 for the three months ended June 30, 1997 Earnings per share of $.335 for the current period represented an increase of $.055 from $.280 for the corresponding period in 1997. The improvement in net income resulted primarily from an increase in net interest income and noninterest income, partially offset by increases in salaries and benefits, occupancy, furniture and equipment and credit card processing. Deposits of $242,968,941 at June 30, 1998 increased by $10,180,407 or 4.4% from $232,788,534 at December 31, 1997. The increase in deposits occurred in the noninterest bearing demand deposit category and in the interest bearing categories of money market deposit accounts, NOW accounts and certificates of deposit. Loans of $135,467,862 at June 30, 1998 were down $4,371,991 or 3.1% from $139,839,853 at December 31, 1997. A slight increase was realized in MasterCard balances while decreases were experienced in residential real estate mortgages, home equity lines of credit and installment loans. Commercial loans were essentially unchanged during the period. Noncurrent loans (nonaccrual loans and loans 90 days or more past due but still accruing) totaled $899,250 and $871,619 at June 30, 1998 and December 31, 1997, respectively. There were no accruing troubled debt restructurings at June 30, 1998 or December 31, 1997. Assets of $291,619,352 at June 30, 1998 represented a $18,068,825 or 6.6% increase from $273,550,527 at December 31, 1997. SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO SIX MONTHS ENDED JUNE 30, 1998 NET INTEREST INCOME Interest income for the six months ended June 30, 1998 was $9,961,193, representing an increase of $675,886 or 7.3% from $9,285,307 for the six months ended June 30, 1997, primarily due to higher average loan, securities and federal funds sold balances in 1998. Interest expense was $3,699,280, representing an increase of $369,180 or 11.1% from $3,330,100 for the six months ended June 30, 1997, primarily due to higher average interest bearing deposit and repurchase agreement balances in 1998. Net interest income for the six months ended June 30, 1998 was $6,261,913, representing an increase of $306,706 or 5.2% from $5,955,207 for the six months ended June 30, 1997. -9- NONINTEREST INCOME AND EXPENSE Noninterest income for the six months ended June 30, 1998 was $1,589,852 representing an increase of $298,435 or 23.1% from $1,291,417 for the six months ended June 30, 1997. This increase was primarily the result of increases in merchant credit card assessments, gains on sales of loans and other charges, commissions and fees, partially offset by a reduction in service charges and other income. Noninterest expense for the six months ended June 30, 1998 of $4,839,406 was up $167,729 or 3.6% from $4,671,677 for the same period in 1997. This increase was primarily the result of increases in salaries and employee benefits, occupancy, furniture and equipment and credit card processing, partially offset by a reduction in other expense. PROVISION FOR LOAN LOSSES There was no provision for loan losses for the six months ended June 30, 1998 or 1997, reflecting management's continuing evaluation of the adequacy of the allowance for loan losses and its belief that the allowance is adequate. INCOME TAXES Income tax expense of $1,108,468 for the six months ended June 30, 1998 compared to $974,374 for the same period in 1997, the result of an increase in taxable income during the current period. NET INCOME Net income of $1,903,891 for the first six months of 1998 represented an increase of $303,318 or 19.0% from $1,600,573 recorded for the first six months of 1997. Earnings per share of $.649 for the current period represented an increase of $.104 from $.545 for the six months ended June 30, 1997. THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THREE MONTHS ENDED JUNE 30, 1997 NET INTEREST INCOME Interest income for the three months ended June 30, 1998 was $5,040,014, representing an increase of $314,140 or 6.6% from $4,725,874 for the three months ended June 30, 1997, primarily due to higher average loan, securities and federal funds sold balances in 1998. Interest expense was $1,893,506, representing an increase of $202,640 or 12.0% from $1,690,866 for the three months ended June 30, 1997, primarily due to higher average interest bearing deposit and repurchase agreement balances in 1998. Net interest income for the three months ended June 30, 1998 was $3,146,508, representing an increase of $111,500 or 3.7% from $3,035,008 for the three months ended June 30, 1997. NONINTEREST INCOME AND EXPENSE Noninterest income for the three months ended June 30, 1998 was $807,251, representing an increase of $134,414 or 20.0% from $672,837 for the three months ended June 30, 1997. This increase was primarily the result of increases in merchant credit card assessments, gains on sales of loans and other charges, commissions and fees and other income, partially -10- offset by a reduction in service charges and gains on sales of securities. Noninterest expense for the three months ended June 30, 1998 of $2,402,277 was up $13,071 or .5% from $2,389,206 for the corresponding period in 1997. This increase was primarily the result of increases in salaries and employee benefits, furniture and equipment and credit card processing, partially offset by reductions in data processing, occupancy and other expense. PROVISION FOR LOAN LOSSES There was no provision for loan losses for the three months ended June 30, 1998 or 1997, reflecting management's continuing evaluation of the adequacy of the allowance for loan losses and its belief that the allowance is adequate. INCOME TAXES Income tax expense of $568,187 for the three months ended June 30, 1998 compared to $493,881 for the corresponding period in 1997, the result of an increase in taxable income during the current period. NET INCOME Net income of $983,295 for the first three months of 1998 represented an increase of $158,537 or 19.2% from $824,758 recorded for the first three months of 1997. Earnings per share of $.335 for the current period represented an increase of $.055 from $.280 for the three months ended June 30, 1997. ALLOWANCE FOR POSSIBLE LOAN LOSSES The allowance for possible loan losses is maintained at a level believed by management to be adequate to absorb potential losses in the loan portfolio. Management's methodology in determining the adequacy of the allowance considers specific credit reviews, past loan loss experience, current economic conditions and trends and the volume, growth and composition of the loan portfolio. Each loan on the Company's internal Watch List is evaluated periodically to estimate potential losses. For loans with potential losses, the bank sets aside or "allocates" a portion of the ALLL against such potential losses. For the remainder of the portfolio, "unallocated" reserve amounts are determined based on judgments regarding the type of loan, economic conditions and trends, potential exposure to loss and other factors. The allowance for possible loan losses is charged when management determines that the repayment of the principal on a loan is in doubt. Subsequent recoveries, if any, are credited to the allowance. At June 30, 1998, the balance in the allowance was $3,125,204 representing 348% of noncurrent loans, compared to $3,215,559 or 369% of noncurrent loans at December 31, 1997. SECURITIES The Company's securities portfolio consists of obligations of the U.S. Treasury, U.S. government sponsored agencies, mortgage backed securities and obligations of various municipalities. Those assets are used in part to secure public deposits and as collateral for repurchase agreements. -11- Total securities were $105,864,184 at June 30, 1998, representing an increase of $10,669,794 or 11.2% from $95,184,390 at December 31, 1997. At June 30, 1998, $32,618,632 in securities were classified as "available for sale". There were no sales of securities during the six months ended June 30, 1998. LIQUIDITY AND CAPITAL RESOURCES The Company's primary sources of liquidity are customer deposits, amortization and pay-offs of loan principal and maturities of investment securities. These sources provide funds for loan originations, the purchase of investment securities and other activities. Deposits are considered a relatively stable source of funds. At June 30, 1998 and 1997, deposits were $243.0 and $218.2 million, respectively. Management anticipates that deposits will remain relatively stable or grow moderately during the remainder of 1998. As a nationally chartered member of the Federal Reserve System, the Bank has the ability to borrow funds from the Federal Reserve Bank of Boston by pledging certain of its investment securities as collateral. Also, the Bank is a member of the Federal Home Loan Bank which provides additional borrowing opportunities. Bank regulatory authorities have established a capital measurement tool called "Tier 1" leverage capital. A 4.00% ratio of Tier 1 capital to assets now constitutes the minimum capital standard for most banking organizations. At June 30, 1998, the Company's Tier 1 leverage capital ratio was 8.23%. Regulatory authorities have also implemented risk-based capital guidelines requiring a minimum ratio of Tier 1 capital to risk weighted assets of 4.00% and a minimum ratio of total capital to risk- weighted assets of 8.00%. At June 30, 1998 the Company's Tier 1 and total risk-based capital ratios were 15.31% and 16.57%, respectively. The Bank is categorized as "well capitalized" under the Federal Deposit Insurance Corporation Improvement Act of 1991 (F.D.I.C.I.A.). On May 5, 1998, the Company's 401(k) Savings Plan ("401(k)") and the Employee Stock Ownership Plan ("ESOP") purchased 12,998 shares and 5,333 shares, respectively, of common stock from the Company. The stock was sold to the two Plans at a price of $15.00 per share, which was determined by the trustees of the Plans, based on a fair market analysis performed by an independent third party pursuant to the ESOP, to represent a fair market price from a financial point of view as of December 31, 1997. The stock was sold to the two Plans from the Company's treasury stock account. On June 16, 1998, the Company's Board of Directors declared a second quarter 1998 cash dividend of $.079 per share of common stock to shareholders of record at June 1, 1998, payable on July 15, 1998. ASSET/LIABILITY MANAGEMENT The Company has an asset/liability management committee which oversees all asset/liability activities of the Company. The committee establishes general guidelines each year and meets regularly to review the Company's operating results and to make strategic changes when necessary. It is the Company's general policy to reasonably match the rate sensitivity of its assets and liabilities. A common benchmark of this -12- sensitivity is the one year gap position, which is a reflection of the difference between the speed and magnitude of rate changes of interest rate sensitive liabilities as compared with the Bank's ability to adjust the rates of it's interest rate sensitive assets in response to such changes. The Company's positive cumulative one year gap position at June 30, 1998, representing the excess of repricing assets versus repricing liabilities within a one year time frame, was 4.1% of total assets. -13- PART II - OTHER INFORMATION Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Annual Meeting of Shareholders was held on April 14, 1998. At that meeting, two (2) matters were put before the shareholders for vote. Proxies for the meeting were solicited, and a copy of the Proxy Statement dated March 24, 1998 is incorporated herein by reference and attached hereto as an exhibit. Such Proxy Statement provides a description of the matters put before the shareholders for vote and provides other information required under this Item 4. The results of the voting were as follows: 1. To fix the number of Directors who shall constitute the full Board of Directors at eleven. Votes for: 2,037,117 Votes against: 5,186 2. To elect as Directors the four individuals listed as nominees in the Proxy Statement, who, together with the seven Directors whose terms of office did not expire at this meeting, constitute the full Board of Directors. Director Votes For Votes Against -------- --------- ------------- Horst Huehmer 2,037,490 4,813 Donald R. Hughes, Jr. 2,037,490 4,813 Mark Poplin 2,037,490 4,813 David W. Webster 2,037,490 4,813 Item 5. OTHER INFORMATION On June 16, 1998, the Company's Board of Directors declared a second quarter 1998 cash dividend of $.079 per share of common stock to shareholders of record at June 1, 1998, payable on July 15, 1998. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 27 Article 9 - Financial Data Schedule for the six months ended June 30, 1998 99 Proxy Statement dated March 24, 1998 (b) The Company did not file a Form 8-K during the quarter ended June 30, 1998 -14- 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. COMMUNITY BANCORP, INC. Date: August 10, 1998 By: /s/ James A. Langway _________________________ James A. Langway President & Chief Executive Officer Principal Executive Officer Date: August 10, 1998 By: /s/ Donald R. Hughes, Jr. _________________________ Donald R. Hughes, Jr. Treasurer and Clerk, Principal Financial Officer and Principal Accounting Officer -15- EXHIBIT INDEX ------------- EXHIBIT DESCRIPTION ------- ----------- 27 Article 9 - Financial Data Schedule for six months ended June 30, 1998 99 Proxy Statement dated March 24, 1998 -16- EX-27 2 FINANCIAL DATA SCHEDULE FOR 06-30-98
9 This schedule contains summary financial information extracted from the unaudited June 30, 1998 consolidated financial statements of Community Bancorp, Inc. and is qualified in its entirety by reference to such financial statements. 6-MOS DEC-31-1998 JUN-30-1998 15433367 0 27500000 0 32618632 73245552 73609454 137695848 3125204 291619352 242968941 22849432 1679260 0 0 0 7998045 16123674 291619352 6617533 2893225 450435 9961193 3273059 3699280 6261913 0 0 4839406 3012359 3012359 0 0 1903891 .649 .649 5.01 811009 88241 0 0 3215559 108097 17742 3125204 1615675 0 1509529
EX-99 3 PROXY STATEMENT DATED MARCH 24, 1998 COMMUNITY BANCORP, INC. PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS April 14, 1998 The following information is furnished in connection with the solicitation of proxies by the management of Community Bancorp, Inc. ("Corporation"), whose principal executive office is located at 17 Pope Street, Hudson, Massachusetts, (Telephone: 978-568-8321), for use at the Annual Meeting of Shareholders of the Corporation to be held on Tuesday, April 14, 1998. As of March 2, 1998, 2,926,257 shares of common stock of the Corporation were outstanding and entitled to be voted. The record date and hour for determining shareholders entitled to vote has been fixed at 5 o'clock p.m., March 2, 1998. Only shareholders of record at such time will be entitled to notice of, and to vote at, the meeting. Shareholders are urged to sign the enclosed form of proxy solicited on behalf of the management of the Corporation and return it at once in the envelope enclosed for that purpose. The proxy does not affect the right to vote in person at the meeting and may be revoked prior to its exercise. Proxies will be voted in accordance with the shareholder's directions. If no directions are given, proxies will be voted to fix the number of Directors of the Corporation at eleven; and to elect Horst Huehmer, Donald R. Hughes, Jr., Mark Poplin and David W. Webster to the Board of Directors of the Corporation to serve until the Annual Meeting of Shareholders in the year 2001 and until their successors are duly elected and qualified to serve. The financial statements of the Corporation for 1997 have been mailed to the shareholders with the mailing of this Notice and Proxy Statement. The cost of the solicitation of proxies is being paid by the Corporation. The Proxy Statement will be mailed to shareholders of the Corporation on or about March 24, 1998. -2- DETERMINATION OF NUMBER OF DIRECTORS AND ELECTION OF DIRECTORS The persons named as proxies intend to vote to fix the number of Directors for the ensuing year at eleven and vote for the election of the persons named below as Nominees for Election at This Meeting as Directors, each to hold office until the annual meeting held in the year indicated in the column designated "Term of Office." If any nominee should not be available for election at the time of the meeting, the persons named as proxies may vote for another person in their discretion or may vote to fix the number of Directors at less than eleven. The management does not anticipate that any nominee will become unavailable. The By-laws of the Corporation provide in substance that the Board of Directors shall be divided into three classes as nearly equal in number as possible, and that the term of office of one class shall expire and a successor class be elected at each annual meeting of the shareholders. The present number of Directors is eleven. It is proposed by the Board that at the meeting the number of Directors who shall constitute the full Board of Directors until the next annual meeting be fixed at eleven and that the four nominees listed below be elected to serve until the date indicated opposite their names. All of the nominees are currently Directors. Opposite the name of each nominee and each continuing Director in the following table is shown: (1) the number of shares of stock of the Corporation owned beneficially by each such person; (2) for those persons serving as Directors of the Corporation, the date on which such person's term of office as Director began; (3) the term of office for which such person will serve; and (4) such person's current principal occupation or employment. -3- Nominees For Election At This Meeting ------------------------------------- Has Served on Board of Directors Shares of of the Stock Owned Corporation Beneficially or Its as of March Predecessor Term of Principal Name 2, 1998 (1) Since Office Occupation - ---- ------------ ------------ ------- ------------------- Horst Huehmer 22,632 1980 2001 Director of Corporation and Community National Bank; Retired. Donald R. Hughes, Jr. 105,075 1995 2001 Director of (2) Corporation and Community National Bank; Treasurer & Clerk of the Corporation; Executive Vice President & Cashier of Community National Bank. Mark Poplin 152,764 1967 2001 Director of Corporation and Community National Bank; President and Treasurer, Poplin Supply Co.; Secretary, Poplin Furniture Co. David W. Webster 64,177 1995 2001 Director of Corporation and Community National Bank; President, Knight Fuel Co., Inc. Directors Continuing in Office ------------------------------ Has Served on Board of Directors Shares of of the Stock Owned Corporation Beneficially or Its as of March Predecessor Term of Principal Name 2, 1998 (1) Since Office Occupation - ---- ------------ ----------- ------- ------------------- Alfred A. Cardoza 22,486 1971 2000 Director of Corporation and Community National Bank; Retired Argeo R. Cellucci 6,728 1968 2000 Director of Corporation and Community National Bank; President, Cellucci Hudson Corp. Antonio Frias 19,858 1985 2000 Director of Corporation and Community National Bank; President and Treasurer, S & F Concrete Contractors, Inc. I. George Gould 118,063 1962 1999 Director of (2) Corporation and Community National Bank; Chairman, Gould's, Inc. James A. Langway 164,470 1976 1999 Director of (2) Corporation and Community National Bank; President and CEO of the Corporation; President & CEO of Community National Bank Dennis F. Murphy, Jr. 444,672 1984 2000 Chairman of the Board of Corporation and Community National Bank; Director of Corporation and Community National Bank; President and Treasurer, D. Francis Murphy Insurance Agency, Inc. David L. Parker 28,714 1986 1999 Director of Corporation and Community National Bank; Chairman, Larkin Lumber Co. -4- NOTES: 1. Beneficial ownership of stock for the purpose of this statement includes securities owned by the spouse and minor children and any relative with the same address. Certain Directors may disclaim beneficial ownership of certain of the shares listed beside their names. 2. Includes 73,075 shares held by CBI ESOP as to which Messrs. Gould, Hughes and Langway are co-trustees. The affirmative vote of the holders of a majority of the common stock of the Corporation present or represented and voting at the meeting is required to fix the number of Directors. The affirmative vote of a plurality of the votes cast by shareholders is required to elect Directors. OTHER MATTERS The management knows of no business which will be presented for consideration at the meeting other than that set forth in this Proxy Statement. However, if any such business comes before the meeting, the persons named as proxies will vote thereon according to their best judgment. By order of the Board of Directors /s/ James A. Langway -------------------- James A. Langway President Hudson, Massachusetts March 24, 1998 -----END PRIVACY-ENHANCED MESSAGE-----