-----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, JBV4ys+GkdfXSGn2eEGPm0ZItea8T94qQcBK61HrazqJz/AOQUToSMEjge/6tq6e 5a2OIGqVWcbqY+hlouV6kA== 0000742170-96-000020.txt : 19960729 0000742170-96-000020.hdr.sgml : 19960729 ACCESSION NUMBER: 0000742170-96-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960726 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: 1934 Act SEC FILE NUMBER: 033-12756-B FILM NUMBER: 96599278 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 06-30-96 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, 1996 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 - (508) 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 3,192,677 shares outstanding as of July 25, 1996 COMMUNITY BANCORP, INC. TABLE OF CONTENTS Page ---- PART I - FINANCIAL INFORMATION Item 1. Financial Statements: Consolidated Balance Sheets 3 Consolidated Statements of Income 4 Consolidated Statements of Cash Flow 5-6 Notes to Consolidated Financial Statemements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-12 PART II - OTHER INFORMATION 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 EXHIBITS Proxy Statement dated March 20, 1996 15-19 Financial Data Schedule (EX-27, Article 9) 20 -2- PART I - FINANCIAL INFORMATION COMMUNITY BANCORP, INC. Item 1. CONSOLIDATED BALANCE SHEETS
June 30, December 31, ---------------------------- 1996 1995 ------------ ------------ ASSETS Cash and due from banks $ 14,922,936 $ 12,668,446 Federal funds sold 10,300,000 16,700,000 Securities available for sale, at market 28,905,416 23,790,470 Securities held to maturity (market value $53,574,634 at 6/30/96 and $50,633,376 at 12/31/95) 54,517,459 50,825,359 Loans 128,908,753 128,072,061 Less allowance for possible loan losses 3,499,516 3,455,098 ----------- ----------- Total net loans 124,409,237 124,616,963 Premises and equipment, net 4,915,757 5,126,083 Other assets, net 3,744,324 3,853,475 ----------- ----------- Total assets $242,715,129 $237,580,796 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits Noninterest bearing $ 45,973,690 $ 45,383,886 Interest bearing 164,349,892 161,655,979 ----------- ----------- Total deposits 210,323,582 207,039,865 ----------- ----------- Federal funds purchased and securities sold under repurchase agreements 10,078,675 9,289,963 Other liabilities 1,467,592 1,710,295 ----------- ----------- Total liabilities 221,869,849 207,039,865 ----------- ----------- Commitments Stockholders' equity: Preferred stock, $2.50 par value, 100,000 shares authorized, none issued or outstanding Common stock, $2.50 par value, 4,000,000 shares authorized, 3,199,218 shares issued, 3,192,677 shares outstanding, (3,140,754 shares outstanding at December 31, 1995) 7,998,045 7,998,045 Surplus 374,581 290,253 Undivided profits 12,629,713 11,463,544 Treasury stock, 6,541 shares, (40,272 shares at December 31, 1995) (29,435) (181,224) Unrealized losses on securities available for sale, net (127,624) (29,945) ----------- ----------- Total stockholders' equity 20,845,280 19,540,673 ----------- ----------- Total liabilities and stockholders' equity $242,715,129 $237,580,796 =========== =========== See accompanying notes.
-3- COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME
Three months ended Six months ended June 30, June 30, --------------------- -------------------- 1996 1995 1996 1995 ---------- --------- --------- --------- Interest income: Interest and fees on loans $3,121,407 $3,075,590 $6,222,421 $6,027,822 Interest and div. on securities: Taxable interest 1,137,476 998,718 2,182,085 2,010,584 Nontaxable interest 23,686 24,771 45,256 48,136 Dividends 13,548 5,495 26,537 25,847 Interest on federal funds sold 123,001 31,159 302,517 33,509 --------- --------- --------- --------- Total interest income 4,419,118 4,135,733 8,778,816 8,145,898 --------- --------- --------- --------- Interest expense: Deposits 1,430,007 1,380,992 2,930,440 2,662,398 Short term borrowings 123,874 143,471 240,832 291,996 --------- --------- --------- --------- Total interest expense 1,553,881 1,524,463 3,171,272 2,954,394 --------- --------- --------- --------- Net interest income 2,865,237 2,611,270 5,607,544 5,191,504 Provision for loan losses 0 30,000 0 60,000 --------- --------- --------- --------- Net interest income after provision for loan losses 2,865,237 2,581,270 5,607,544 5,131,504 --------- --------- --------- --------- Noninterest income: Merchant credit card assessments 195,016 159,037 401,382 329,730 Service charges 195,388 172,334 381,510 349,560 Other charges, commissions, fees 181,237 183,796 351,824 348,832 Gains (losses) on sales of loans, net 4,436 (37,882) 19,939 (50,608) Other 17,842 19,995 33,137 41,761 --------- --------- --------- --------- Total noninterest income 593,919 497,280 1,187,792 1,019,275 --------- --------- --------- --------- Noninterest expense: Salaries and benefits 1,144,023 1,125,754 2,250,679 2,132,751 Data processing 150,970 110,213 291,269 223,856 Occupancy, net 132,338 156,264 289,566 303,917 Furniture and equipment 82,217 77,626 173,606 160,497 Credit card processing 170,942 139,317 330,144 273,567 Other 464,645 496,685 905,260 995,757 --------- --------- --------- --------- Total noninterest expense 2,145,135 2,105,859 4,240,524 4,090,345 --------- --------- --------- --------- Income before income taxes 1,314,021 972,691 2,554,812 2,060,434 Income taxes 518,035 435,079 998,002 817,220 --------- --------- --------- --------- Net income $ 795,986 $ 537,612 $1,556,810 $1,243,214 ========= ========= ========= ========= Earnings per share $ .250 $ .171 $ .491 $ .396 Dividends per share $ .062 $ .058 $ .123 $ .115 Weighted average number of shares 3,179,333 3,140,748 3,169,139 3,140,751 See accompanying notes.
-4- COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended June 30, --------------------------- 1996 1995 ------------ ------------ Cash flows from operating activities: Interest received $ 8,691,380 $ 8,170,602 Fees and commissions received 1,249,303 1,034,735 Proceeds from secondary market mortgage sales 8,858,377 2,230,942 Origination of mortgage loans for secondary market sales (7,895,977) (1,929,041) Interest paid (3,223,425) (2,979,467) Cash paid to suppliers & employees (3,908,440) (3,499,723) Income taxes paid (992,795) (741,709) ---------- ---------- Net cash provided by operating activities 2,778,423 2,286,339 ---------- ---------- Cash flows from investing activities: Purchases of securities held to maturity (9,586,198) (417,000) Proceeds from maturities of securities held to maturity 5,939,184 1,140,071 Purchases of securities available for sale (8,403,017 Proceeds from maturities of securities available for sale 3,072,767 3,172,003 Net change in federal funds sold 6,400,000 5,400,000 Net change in loans and other real estate owned (1,698,799) (6,639,467) Proceeds from sale of other real estate owned 97,700 Acquisition of property, plant and equipment (174,204) (274,231) ---------- ---------- Net cash provided by (used in) investing activities (4,450,267) 2,479,076 ---------- ---------- Cash flows from financing activities: Net change in deposits 3,283,717 700,536 Net change in federal funds purchased (1,000,000) (10,900,000) Net change in repurchase agreements 1,788,712 6,878,710 Purchase of treasury stock (240) Sale of treasury stock 236,137 Dividends paid (382,232) (354,065) ---------- ---------- Net cash provided by (used in) financing activities 3,926,334 (3,675,059) ---------- ---------- Net increase in cash and due from banks 2,254,490 1,090,356 Cash and due from banks at beginning of period 12,668,446 11,600,385 ---------- ---------- Cash and due from banks at end of period $14,922,936 $12,690,741 ========== ========== 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, -------------------------- 1996 1995 ----------- ----------- Net income $ 1,556,810 $ 1,243,214 Adjustments to reconcile net income to net cash provided by operating activities: Decrease in mortgage loans held for sale 791,145 125,891 Premium on sale of mortgages 171,255 176,010 Depreciation and amortization 420,855 366,956 Provision for loan losses 60,000 Increase (decrease) in other liabilities (88,786) 223,674 Increase in taxes payable 5,207 75,511 (Decrease) in interest payable (52,153) (25,073) Decrease in other assets 61,511 15,457 Decrease (increase) in interest receivable (87,421) 24,699 ---------- ---------- Total adjustments 1,221,613 1,043,125 ---------- ---------- Net cash provided by operating activities $ 2,778,423 $ 2,286,339 ========== ========== See accompanying notes.
-6- COMMUNITY BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1996 ________________________________________________________________________ 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, 1995. 2. EARNINGS PER SHARE Earnings per share calculations are based on the weighted average number of common shares outstanding during the period. 3. FINANCIAL ACCOUNTING STANDARDS BOARD STATEMENT NO. 122, "ACCOUNTING FOR MORTGAGE SERVICING RIGHTS" Beginning January 1, 1996, the Company adopted Financial Accounting Standards Board Statement No. 122, "Accounting for Mortgage Servicing Rights" (SFAS No. 122), which requires the capitalization of the cost of originating the rights to service mortgage loans for others. In addition, capitalized mortgage servicing rights are required to be assessed for impairment based on the fair value of those rights. The adoption of SFAS No. 122 resulted in the Company recording $30,315 in income associated with the origination of mortgage servicing rights during the six months ended June 30, 1996. -7- 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 $1,556,810 for the six months ended June 30, 1996, representing an increase of $313,596 or 25.2% over $1,243,214 for the same period in 1995. Earnings per share of $.491 for the current period represented an increase of $.095 from $.396 for the six months ended June 30, 1995. The Company recorded net income of $795,986 for the three months ended June 30, 1996, representing an increase of $258,374 or 48.1% over $537,612 for the corresponding period in 1995. Earnings per share of $.250 for the current period represented an increase of $.079 from $.171 for the same period in 1995. The improvement in net income resulted primarily from an increase in net interest income and noninterest income, and a decrease in the provision for possible loan losses and F.D.I.C. deposit insurance premiums. Deposits of $210,323,582 at June 30, 1996 increased by $3,283,717 or 1.6% from $207,039,865 at December 31, 1995. This increase occurred primarily in interest bearing deposit categories. Interest bearing deposits increased by $2,693,913, primarily in the areas of NOW and savings accounts. Noninterest bearing deposits increased by $589,804, primarily in the area of personal demand deposit accounts. Loans of $128,908,753 at June 30, 1996 increased by $836,692 or .7% from $128,072,061 at December 31, 1995. This increase occurred in the commercial, residential construction and consumer loan portfolios. Noncurrent loans (nonaccrual loans and loans 90 days or more past due but still accruing) totalled $1,887,793 and $1,810,267 at June 30, 1996 and December 31, 1995, respectively. There were no accruing troubled debt restructurings at June 30, 1996 or December 31, 1995. Assets of $242,715,129 at June 30, 1996 represented a $5,134,333 or 2.2% increase from $237,580,796 at December 31, 1995. Six Months ended June 30, 1996 as Compared To Six Months ended June 30, 1995 --------------------------------------------- Net Interest Income - ------------------- Interest income for the six months ended June 30, 1996 was $8,778,816, representing an increase of $632,918 or 7.8% from $8,145,898 for the six months ended June 30, 1995, primarily due to higher loan and securities balances in 1996. Interest expense was $3,171,272, representing an increase of $216,878 or 7.3% from $2,954,394 for the six months ended June 30, 1995, primarily due to higher interest bearing deposit balances in 1996. Net interest income for the six months ended June 30, 1996 was $5,607,544, representing an increase of $416,040 or 8.0% from $5,191,504 for the six months ended June 30, 1995. -8- Noninterest Income and Expense - ------------------------------ Noninterest income for the six months ended June 30, 1996 was $1,187,792, representing an increase of $168,517 or 16.5% from $1,019,275 for the six months ended June 30, 1995. This increase was primarily the result of increases in merchant credit card assessments, service charges, and gains on sales of loans. Noninterest expense for the six months ended June 30, 1996 of $4,240,524 was up $150,179 or 3.7% from $4,090,345 for the same period in 1995. This increase was primarily the result of increases in salaries and employee benefits, data processing, furniture and equipment, occupancy and credit card processing, partially offset by a reduction in other expense, including F.D.I.C. deposit insurance premiums. Provision for Loan Losses - ------------------------- The provision for loan losses for the six months ended June 30, 1996 was $0, representing a $60,000 or 100.0% decrease from $60,000 for the same period in 1995. This decrease was the result of 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 $998,002 for the six months ended June 30, 1996 compared to $817,220 for the same period in 1995, the result of an increase in taxable income during the current period. Net Income - ---------- Net income of $1,556,810 for the first six months of 1996 represented an increase of $313,596 or 25.2% from $1,243,214 recorded for the first six months of 1995. Earnings per share of $.491 for the current period represented an increase of $.095 from $.396 for the six months ended June 30, 1995. Three Months ended June 30, 1996 as Compared To Three Months ended June 30, 1995 ----------------------------------------------- Net Interest Income - ------------------- Interest income for the three months ended June 30, 1996 was $4,419,118, representing an increase of $283,385 or 6.9% from $4,135,733 for the three months ended June 30, 1995. The increase was primarily due to higher loan and securities balances in 1996. Interest expense was $1,553,881, representing an increase of $29,418 or 1.9% from $1,524,463 for the three months ended June 30, 1995, primarily due to higher interest bearing deposit balances in 1996. Net interest income for the three months ended June 30, 1996 was $2,865,237, representing an increase of $253,967 or 9.7% from $2,611,270 for the same period in 1995. -9- Noninterest Income and Expense - ------------------------------ Noninterest income for the three months ended June 30, 1996 was $593,919, representing an increase of $96,639 or 19.4% from $497,280 for the three months ended June 30, 1995. This increase was primarily the result of increases in merchant credit card assessments, service charges, and gains on sales of loans. Noninterest expense for the three months ended June 30, 1996 of $2,145,135 was up $39,276 or 1.9% from $2,105,859 for the three months ended June 30, 1995. This increase was primarily the result of increases in salaries and employee benefits, data processing, furniture and equipment, occupancy and credit card processing, partially offset by a reduction in other expense, including F.D.I.C. deposit insurance premiums. Provision for Loan Losses - ------------------------- The provision for loan losses for the three months ended June 30, 1996 was $0, representing a $30,000 or 100.0% decrease from $30,000 for the three months ended June 30, 1995. This decrease was the result of 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 $518,035 for the three months ended June 30, 1996 compared to $435,079 for the three months ended June 30, 1995, the result of an increase in taxable income during the current period. Net Income - ---------- Net income of $795,986 for the three months ended June 30, 1996 represented an increase of $258,374 or 48.1% over $537,612 for the three months ended June 30, 1995. Earnings per share of $.250 for the current period represented an increase of $.079 from $.171 for the three months ended June 30, 1995. 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 judgements 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, 1996, the balance in the allowance was $3,499,516, representing 2.7% of total loans, compared to $3,455,098 or 2.7% of total loans at December 31, 1995. -10- 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 municipalities in the Company's market area. Those assets are used in part to secure public deposits and as collateral for repurchase agreements. Total securities were $83,422,875 at June 30, 1996, representing an increase of $8,807,046 or 11.8% from $74,615,829 at December 31, 1995. At June 30, 1996, $28,905,416 in securities were classified as "available for sale". There were no sales of securities during the six months ended June 30, 1996. 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, 1995, 1994 and 1993, deposits were $210.3, $187.6 and $177.1 million, respectively. Management anticipates that deposits will remain relatively stable or grow moderately during the remainder of 1996. 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 3.00% ratio of Tier 1 capital to assets now constitutes the minimum capital standard for banking organizations. At June 30, 1996, the Company's Tier 1 leverage capital ratio was 8.62%. In addition, 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, 1996 the Company's Tier 1 and total risk-based capital ratios were 15.12% and 16.39%, respectively. Both the Company and the Bank are categorized as "well capitalized" under the Federal Deposit Insurance Corporation Improvement Act of 1991 (F.D.I.C.I.A.). The Board of Directors declared a second quarter 1996 cash dividend of $.062 per share of common stock to shareholders of record at June 1, 1996, payable on July 15, 1996. 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. -11- It is the Company's general policy to reasonably match the rate sensitivity of its assets and liabilities. A common benchmark of this 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, 1996, representing the excess of repricing assets versus repricing liabilities within a one year time frame, was 4.1% of total assets. -12- PART II - OTHER INFORMATION --------------------------- Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Annual Meeting of Shareholders was held on April 9, 1996. 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 20, 1996 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: 2,261,655 Votes against: 3,768 2. To elect as Directors the five individuals listed as nominees in the Proxy Statement, who, together with the six Directors whose terms of office did not expire at this meeting, constitute the full Board of Directors. Director Votes For Votes Against -------- --------- -------------- I. George Gould 2,269,075 7,268 Donald R. Hughes, Jr. 2,269,075 7,268 James A. Langway 2,269,075 7,268 David L. Parker 2,269,075 7,268 David W. Webster 2,269,075 7,268 Item 5. OTHER INFORMATION At its July 16, 1996 meeting, the Company's Board of Directors voted to implement a self-tender offer for its Common Stock in August of 1996. The Company will repurchase a percentage of its outstanding shares of Common Stock with the intention of increasing return on equity by redeploying a portion of existing capital that is not necessary for the Company's core banking business. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (b) The Company filed a Form 8-K on May 31, 1996, reporting the adoption of a Shareholders' Rights Agreement by the Company's Board of Directors on May 21, 1996. A copy of the complete Shareholder Rights Agreement was included with the Form 8-K filing as an exhibit. -13- 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: July 26, 1996 By: /s/ James A. Langway ----------------------------------- James A. Langway President & Chief Executive Officer Principal Executive Officer Date: July 26, 1996 By: /s/ Donald R. Hughes, Jr. ---------------------------------- Donald R. Hughes, Jr. Treasurer and Clerk Principal Financial Officer and Principal Accounting Officer -14- COMMUNITY BANCORP, INC. PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS April 9, 1996 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: 508-568-8321), for use at the Annual Meeting of Shareholders of the Corporation to be held on Tuesday, April 9, 1996. As of March 1, 1996, 3,158,946 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 1, 1996. 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 Donald R. Hughes, Jr. and David W. Webster to the Board of Directors of the Corporation to serve until the Annual Meeting of Shareholders in 1998 and until their successors are duly elected and qualified to serve; and to elect I. George Gould, James A. Langway and David L. Parker to the Board of Directors of the Corporation to serve until the Annual Meeting of Shareholders in 1999 and until their successors are duly elected and qualified to serve. The financial statements of the Corporation for 1995 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 20, 1996. -15- 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 five 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. -16- Nominees For Election at This Meeting Has Served on Board of Shares of Directors Stock Owned of the Beneficially Corporation as of or Its Term March 1, Predecessor of Principal Name 1996 (1) Since Office Occupation I. George Gould 117,499 1962 1999 Director of (2) Corporation and Hudson National Bank; Chairman, Gould's, Inc. Donald R. Hughes, Jr. 88,853 1995 1998 Director of (2) Corporation and Hudson National Bank; Treasurer and Clerk of the Corporation; Executive Vice President and Cashier of Hudson National Bank. James A. Langway 137,060 1976 1999 Director of (2) Corporation and Hudson National Bank; President and CEO of the Corporation and of Hudson National Bank. David L. Parker 22,274 1986 1999 Director of Corporation and Hudson National Bank; Treasurer, Larkin Lumber Co. David W. Webster 30,860 1995 1998 Director of Corporation and Hudson National Bank; President & Treasurer, A. T. Knight Fuel Co., Inc. -17- Directors Continuing in Office Has Served on Board of Shares of Directors Stock Owned of the Beneficially Corporation as of or Its Term March 1, Predecessor of Principal Name 1996 (1) Since Office Occupation Alfred A. Cardoza 22,486 1971 1997 Director of Corporation and Hudson National Bank; Retired. Argeo R. Cellucci 6,728 1968 1997 Director of Corporation and Hudson National Bank; President, Cellucci Hudson Corp. Antonio Frias 101,938 1985 1997 Director of Corporation and Hudson National Bank; President and Treasurer, S & F Concrete Contractors. Horst Huehmer 22,632 1980 1998 Director of Corporation and Hudson National Bank; Retired. Dennis F. Murphy, Jr. 442,640 1984 1997 Chairman of the Board of Corporation and Hudson National Bank; Director of Corporation and Hudson National Bank; President & Treasurer, D.F. Murphy Insurance Agency, Inc. Mark Poplin 170,174 1967 1998 Director of Corporation and Hudson National Bank; President & Treasurer, Poplin Supply Co.; Secretary, Poplin -18- 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 56,853 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 20, 1996 -19- EX-27 2 FINANCIAL DATA SCHEDULE
9 This schedule contains summary financial information extracted from the unaudited June 30, 1996 consolidated financial statements of Community Bancorp, Inc. and is qualified in its entirety by reference to such financial statements. 6-MOS DEC-31-1996 JUN-30-1996 14922936 0 10300000 0 28905416 54517459 53574634 128908753 3499516 242715129 210323582 10078675 1467592 0 0 0 7998045 12847235 242715129 6222421 2253878 302517 8778816 2930440 3171272 5607544 0 0 4240524 2554812 2554812 0 0 1556810 .491 .491 5.18 1802688 85105 0 0 3455098 107371 151789 3499516 1625634 0 1873882
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