-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, g22+Kz3Fadn5WXRbnEn/eTSVU5zDWEx7aJidBEUdhwRmtqbHAKvp55i0ZzEqj8an y6rl+AKkA3NVXYw6xGjECA== 0000915656-95-000008.txt : 19950517 0000915656-95-000008.hdr.sgml : 19950516 ACCESSION NUMBER: 0000915656-95-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BNH BANCSHARES INC CENTRAL INDEX KEY: 0000764205 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 061126899 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14018 FILM NUMBER: 95537188 BUSINESS ADDRESS: STREET 1: 209 CHURCH ST CITY: NEW HAVEN STATE: CT ZIP: 06510 BUSINESS PHONE: 2034983500 MAIL ADDRESS: STREET 2: 209 CHURCH STREET CITY: NEW HAVEN STATE: CT ZIP: 06510 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended March 31, 1995 Commission File Number 0-14018 BNH BANCSHARES, INC. (Exact name of Registrant as specified in its charter) CONNECTICUT 06-1126899 (State of incorporation (I.R.S. Employer Identification or organization) Number) 209 CHURCH STREET, NEW HAVEN, CONNECTICUT 06510 (Address of principal executive offices) Registrant's telephone number, including area code (203) 498-3500 Former name, former address and former fiscal year, if changed since last report NONE Indicate by check mark whether the registrant (1) has filed all reports required be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [ X ] NO [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. CLASS May 12, 1995 Common Stock (no par value) 14,726,650
BNH BANCSHARES, INC. CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Unaudited) ASSETS March 31, 1995 Dec. 31, 1994 ______________ _____________ Cash and due from banks $ 15,213,746 $ 22,011,625 Federal funds sold 3,575,000 Investment securities: Held to Maturity, at amortized cost 36,692,542 38,799,457 Available for Sale, at fair value 28,184,076 29,155,531 Loans less unearned discount 208,071,411 206,985,544 Less allowance for loan losses (7,403,980) (6,827,374) ___________ ___________ Loans - net 200,667,431 200,158,170 Property and equipment-net 4,106,483 4,139,386 Accrued interest receivable 2,128,641 2,140,277 Other real estate owned 1,453,181 1,852,068 Other assets 1,288,629 918,672 ___________ ___________ TOTAL $293,309,729 $299,175,186 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand deposits $ 46,654,634 $ 59,232,645 NOW accounts 37,920,551 39,869,769 Money market accounts 24,633,967 23,095,704 Savings deposits 32,422,516 36,169,539 Time deposits under $100,000 113,739,240 108,055,465 Time deposits $100,000 or more 13,239,953 11,293,040 ___________ ____________ Total deposits 268,610,861 277,716,162 Federal funds purchased and securities sold under repurchase agreements 1,541,328 3,561,134 FHLB Advances 9,036,368 4,692,180 Accrued interest payable 390,602 304,815 Other liabilities 565,934 545,236 ___________ ___________ Total liabilities 280,145,093 286,819,527 Shareholders' equity: Common stock, $.01, stated value; issued 14,745,756, shares Authorized 30,000,000 147,458 147,458 Capital surplus 47,523,492 47,523,492 Undivided losses (33,170,694) (33,392,619) Net unrealized losses on investment securities available for sale (1,088,449) (1,675,501) Treasury stock (19,106, shares) (247,171) (247,171) _____________ _____________ Total shareholders' equity 13,164,636 12,355,659 _____________ _____________ TOTAL $293,309,729 $299,175,186 See accompanying Notes to Consolidated Financial Statements.
BNH BANCSHARES, INC. CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) Three Months Ended March 31, 1995 1994 INTEREST INCOME: Loans $4,592,305 $3,954,654 Investment securities: Held to maturity 503,388 489,645 Available for sale 467,028 355,836 Federal funds sold 7,900 11,594 __________ __________ Total interest income 5,570,621 4,811,729 INTEREST EXPENSE: Time deposits $100,000 or more 139,488 99,034 Time deposits under $100,000 1,359,861 1,091,699 Other deposits 550,214 541,493 Other borrowings 187,340 40,451 __________ __________ Total interest expense 2,236,903 1,772,677 __________ __________ NET INTEREST INCOME 3,333,718 3,039,052 PROVISION FOR LOAN LOSSES (1,394,000) (827,400) __________ __________ NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,939,718 2,211,652 OTHER INCOME: Service charges 535,345 390,831 Other income 153,512 302,215 Net loss on investment securities 0 (6,000) __________ __________ Total other income 688,857 687,046 __________ __________ OPERATING EXPENSES: Salaries and employee benefits 1,361,539 1,370,857 Occupancy 335,140 352,873 Advertising and promotion 113,519 105,047 Office stationery and supplies 53,433 68,814 Examination and professional fees 148,229 194,406 Insurance 265,653 264,404 Other real estate owned 168,854 365,845 Other 445,784 486,715 __________ __________ Total operating expenses 2,892,151 3,208,961 NET LOSS BEFORE INCOME TAXES (263,576) (310,263) (BENEFIT)PROVISION FOR INCOME TAXES (485,500) 15,480 __________ __________ NET PROFIT (LOSS) $ 221,924 $ (325,743) NET PROFIT(LOSS) PER COMMON SHARE $0.02 ($0.02) Weighted average number of common shares outstanding during the period 14,726,650 14,726,650 See accompanying Notes to Consolidated Financial Statements.
BNH BANCSHARES, INC. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) March 31, 1995 March 31, 1994 ______________ ______________ SHAREHOLDERS' EQUITY at beginning of period $12,355,659 $20,206,348 UNDIVIDED LOSSES: Net income(loss) 221,924 (325,743) Change in unrealized depreciation on marketable equity securities 12,959 NET UNREALIZED LOSSES ON SECURITIES: Change in unrealized depreciation on investment securities available for sale 587,053 (239,035) ___________ ___________ SHAREHOLDERS' EQUITY at end of period $13,164,636 $19,654,529 See accompanying Notes to Consolidated Financial Statements.
BNH BANCSHARES, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) Three months ended March 31, 1995 1994 _____________________________ OPERATING ACTIVITIES Net profit(loss) $ 221,924 $ (325,743) Adjustments for items not affecting cash: Provision for loan losses 1,394,000 827,400 Depreciation and amortization of property and equipment 132,498 135,878 (Amortization)accretion of bond premiums and discounts (27,803) 51,819 Deferred tax benefit (504,000) Loss from the sale of available for sale securities 6,000 Loss/writedown on other real estate owned 144,844 281,378 Decrease in interest receivable 11,636 135,516 Increase(Decrease)in interest payable 85,787 (5,608) Other,net 115,094 (92,173) _________ _________ Net cash provided by operating activities 1,573,980 1,014,467 _________ _________ FINANCING ACTIVITIES Net decrease in demand, NOW, money market and savings accounts (16,735,989) (2,460,177) Net increase(decrease) in time deposits 7,630,688 (1,467,393) Net (decrease)increase in federal funds purchased and securities sold under repurchase agreements (2,019,806) 1,007,497 Proceeds from FHLB advances 4,344,188 1,000,000 ___________ __________ Net cash used by financing activities (6,780,919) (1,920,073) ___________ __________ INVESTING ACTIVITIES Net (increase) decrease in federal funds sold (3,575,000) 4,344,848 Maturities of securities held to maturity 2,100,000 3,005,000 Maturities of securities available for sale 2,031,401 341,826 Purchase of securities available for sale (443,300) Proceeds from the sale of available for sale securities 1,998,000 Net loans originated and matured (1,900,919) (6,139,094) Proceeds from sale of other real estate owned 296,473 435,379 Purchase of property and equipment (99,595) (70,664) ___________ ___________ Net cash (used) provided by investing activities (1,590,940) 3,915,295 (Decrease) increase in cash (6,797,879) 3,009,689 Cash and due from banks at beginning of year 22,011,625 12,349,091 ___________ ___________ Cash and due from banks at end of period $15,213,746 $15,358,780 Cash paid for: Interest expense $ 2,151,116 $ 1,778,285 Income taxes $ 18,500 $ 15,480
There were no non-cash transfers from loans receivable to other real estate owned for the three months ending March 31, 1995 and 1994, respectively. Non-cash transfers from other real estate owned to loans receivable were $77,800 and $354,134, for the three months ending March 31, 1995 and 1994, respectively. See accompanying Notes to Consolidated Financial Statements. BNH BANCSHARES, INC. Notes to Consolidated Financial Statements 1. Basis of Presentation The accompanying consolidated financial statements are unaudited and include the accounts of BNH Bancshares, Inc. (the "Company") and its subsidiaries, The Bank of New Haven (the "Bank") and Northeastern Capital Corporation. The financial statements reflect, in management's opinion, all appropriate adjustments consisting of normal recurring adjustments necessary for a fair presentation of the Company's financial position, the results of its operations and the change in its cash flows for the periods presented. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's 1994 Annual Report to Shareholders. 2. Loan Portfolio
March 31, Dec. 31, March 31, 1995 1994 1994 _________ ________ _________ (dollars in thousands) Commercial $ 67,426 $ 67,418 $ 73,058 Real estate: Commercial mortgage 57,047 57,097 69,671 Residential mortgage 38,658 36,605 30,598 Consumer 44,940 45,866 30,150 ________ ________ ________ Total loans 208,071 206,986 203,477 Allowance for loan losses (7,404) (6,827) (9,495) ________ ________ ________ Loans - net $200,667 $200,159 $193,982
The Company adopted Statement of Financial Accounting Standards No. 114 ("SFAS 114"), "Accounting by Creditors For Impairment of a Loan", effective January 1, 1995. The new accounting standard requires that impaired loans, which are defined as loans where it is probable that a creditor will not be able to fully collect both the contractual interest and principal payments, be measured at the present value of expected future cash flows discounted at the loan's effective interest rate or, as a practical expedient, at the loan's observable market price or the fair value of the collateral, if the loan is collateral dependent, when assessing the need for a loss accrual. As of March 31, 1995, the recorded investment in loans that are considered to be impaired under SFAS 114 was $8,705,000, of which $8,002,000 were on a nonaccrual status. The related allowance for loan losses on impaired loans was $3,861,000. The average aggregate balance of impaired loans was $8,420,000 for the three month period ended March 31, 1995. The Company recognized $19,700 of accrued interest income on impaired loans for the three month period ended March 31, 1995. All impaired nonaccrual loans recognize cash payments as a reduction to principal. Below is an analysis of the allowance for loan losses for the three month period ended March 31, 1995. ANALYSIS OF ALLOWANCE FOR LOAN LOSSES (dollars in thousands) March 31, 1995 ______________ Balance beginning of period $6,827 Provision charged to income 1,394 Loans charged off: Commercial 666 Real Estate: Commercial Mtg. 134 Residential Mtg. 40 Consumer 89 ______ Total Loans Charged-off 929 Recoveries 112 ______ Net loans charged off 817 ______ Balance, end of period $7,404 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company earned net income for the three months ended March 31, 1995 of $222,000 as compared to a net loss of $326,000 for the same 1994 period. The improvement in the Company's earnings for the three month period ending March 31, 1995 as compared to the same 1994 period, can be primarily attributed to an increase in net interest income of $295,000 and a reduction in total operating expenses of $317,000. These improvements were offset by an increase in the provision for loan losses of $567,000 from $827,400 for the three month period ended March 31, 1994 to $1,394,000 for the three month period ended March 31, 1995. The increase in the provision for loan losses is primarily related to the Company's adoption of Financial Accounting Standards Board Statement No. 114 ("SFAS 114"),"Accounting by Creditors for Impairment of a Loan". In addition, as a result of the Company's improving profitability and its available net operating loss carryforwards, the Company recognized noncurrent deferred tax benefits of $504,000 during the quarter ended March 31, 1995. The return on average assets was 0.30% for the three months ended March 31, 1995 compared to (0.46%) for the same 1994 period. Net income was $.02 per share for the three months ended March 31, 1995 compared to a net loss of $.02 per share for the three months ended March 31, 1994. In addition, the Federal Deposit Insurance Corporation ("FDIC") has recommended the removal of its Order to Cease and Desist issued on October 7, 1991 when the Bank experienced significant asset quality, liquidity and capital adequacy problems. After completion of a joint examination of the Bank with the Connecticut Banking Department, the FDIC recommended, and the Bank agreed to enter into, a significantly less stringent "Memorandum of Understanding". REGULATORY MATTERS The FDIC, after completion of a joint examination of the Bank with the Connecticut Banking Department as of February 6, 1995, has recommended the removal of its Cease and Desist Order ("Order") issued in 1991. The Order required the Bank to take a series of actions designed to improve its financial condition and operating results and augment its capital position. At the conclusion of its regulatory examination, the FDIC, based on the Bank's improved overall financial condition, recommended the issuance of a less stringent Memorandum of Understanding (the "Memorandum"). The Bank voluntarily agreed to enter into the Memorandum which will be effective in the near future. The Memorandum will require, among other things, that the Bank achieve certain Tier 1 leverage and total risk based capital requirements. The Bank must improve its Tier 1 leverage capital ratio to 5% by June 30, 1996 and to 6% by June 30, 1997. If these thresholds are not achieved the Bank will be required to submit a written capital plan to increase its Tier 1 leverage capital to the required level. Also, the Bank must maintain a total risk-based capital ratio of at least 8% throughout the existence of the Memorandum. As of March 31, 1995,the Bank's Tier 1 leverage capital and total risk-based capital ratios were 4.8% and 8.2%, respectively. The Company anticipates that it will achieve the minimum Tier 1 leverage capital ratio requirements through future earnings. See "Capital Adequacy" for further discussion. The Memorandum will also require the Bank to charge-off certain loans and develop and implement a written problem loan reduction program to continue to reduce its level of problem loans. In addition, the Memorandum will prohibit the payment of dividends without prior FDIC consent and will require the Bank to review, monitor and update certain loan and liquidity policies. NET INTEREST INCOME Net interest income is the difference between the interest earned on loans and investments and the interest paid on deposits and other borrowings. Net interest income was $3,334,000 for the three month period ended March 31, 1995 compared to $3,039,000 for the same 1994 period, representing an increase of $295,000, or 10%. The increase in net interest income for the comparative three month periods was primarily attributed to an increase in earning assets and their associated interest rates and partially offset by an increase in the cost of average paying liabilities. Although the Company's net interest income increased on a comparative basis from March 31, 1994 to March 31, 1995, the level of nonperforming assets continues to impact negatively net interest income. Interest income increased to $5,571,000 for the three months ended March 31, 1995 from $4,812,000 for the same 1994 period, an increase of $759,000, or 16%. The Company's average earning assets increased from $265,418,000 for the three months ended March 31, 1994 to $277,076,000 for the same 1995 period, or 4%. The growth in interest income can be primarily attributed to an increase in the average loan portfolio from $200,307,000 during the quarter ended March 31, 1994 to $208,084,000 during the same 1995 period and an increase in the corresponding loan yield of 94 basis points from 8.01% for the three months ended March 31, 1994 to 8.95% for the same 1995 period. Interest income was negatively impacted by the level of nonperforming assets(nonaccrual loans and OREO) of $9,554,000, $8,895,000 and $14,013,000 as of March 31, 1995, December 31, 1994 and March 31, 1994, respectively. If nonperforming assets had earned interest in accordance with their original terms, the Company would have earned additional interest of approximately $230,000 for the first three months of 1995 as compared to $319,000 for the same 1994 period. Interest expense increased to $2,237,000 for the three months ended March 31, 1995 from $1,773,000 for the same 1994 period, an increase of $464,000, or 26%. This increase reflects the rise in average paying liabilities and their associated interest rates from March 31, 1994 to March 31, 1995. Average paying liabilities increased from $220,643,000 for the quarter ended March 31, 1994 to $229,646,000 for the same period in 1995, an increase of $9,003,000, or 4%. The growth in average paying liabilities is primarily related to an increase in higher cost time deposits and other borrowings. Average time deposits increased $8,959,000 and average other borrowings increased $8,205,000 for the three months period ended March 31, 1995 compared to the same 1994 period. Average interest bearing core deposits (NOW, money market and savings accounts) as a percentage of total average paying liabilities declined from 46% as of March 31, 1994 to 41% as of March 31, 1995. The Company's average interest rate on paying liabilities increased 69 basis points from 3.26% for the three months ended March 31, 1994 to 3.95% for the three months ended March 31, 1995. The Company anticipates that upward pressure on market interest rates for deposits during the last half 1994 and the first quarter of 1995 will increase the Company's overall cost of funding during the remainder of 1995 . The net interest margins for the three month periods ended March 31, 1995 and 1994 were 4.88% and 4.64%, respectively, an increase of 24 basis points.
Three Months Ended March 31, 1995 (in thousands of dollars) (Unaudited) Average Average Balance Interest Yield ________ ________ _______ ASSETS ________________________________________ Investments: Held to Maturity, at amortized cost $ 37,791 $ 504 5.41% Available for Sale 30,667 467 6.18% Federal funds sold 534 8 6.08% Loans - net 208,084 4,592 8.95% ________ ______ ____ Total average earning assets $277,076 $5,571 8.15% INTEREST BEARING LIABILITIES _______________________________________ Deposits: NOW accounts $ 38,043 $ 165 1.76% Money markets 22,723 155 2.77% Savings deposits 33,633 231 2.79% Time deposits under $100,000 110,981 1,360 4.97% Time deposits over $100,000 or more 11,727 139 4.81% ________ ______ _____ Total interest bearing deposits $217,107 $2,050 3.83% Other borrowings 12,539 187 6.05% ________ ______ _____ Total interest bearing deposits and other borrowings $229,646 $2,237 3.95% Net interest income $3,334 Interest rate spread 4.20% Net interest margin 4.88%
Three Months Ended March 31, 1994 (in thousands of dollars) (Unaudited) Average Average Balance Interest Yield ________ ________ _______ ASSETS ________________________________________ Investments: Held to Maturity, at amortized cost $ 37,665 $ 490 5.28% Available for Sale 26,040 356 5.54% Federal funds sold 1,406 11 3.17% Loans - net 200,307 3,955 8.04% ________ ______ ____ Total average earning assets $265,418 $4,812 7.35% INTEREST BEARING LIABILITIES _______________________________________ Deposits: NOW accounts $ 41,853 $ 184 1.78% Money markets 28,746 160 2.26% Savings deposits 31,961 198 2.51% Time deposits under $100,000 103,441 1,092 4.28% Time deposits over $100,000 or more 10,308 99 3.90% ________ ______ _____ Total interest bearing deposits $216,309 $1,733 3.25% Other borrowings 4,334 40 3.74% ________ ______ _____ Total interest bearing deposits and other borrowings $220,643 $1,773 3.26% Net interest income $3,039 Interest rate spread 4.09% Net interest margin 4.64%
Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities (which do not include non-interest bearing demand accounts), and net interest margin represents net interest income as a percentage of average interest-earning assets, including the average daily amount of non-performing loans. The average balance and related weighted average yield calculations are based on average historical amortized cost for the period presented.
FOR THE YEAR TO DATE PERIOD SUMMARY OF AVERAGE INTEREST BEARING LIABILITIES AND DEMAND DEPOSITS (dollars (in thousands) March 31, 1995 December 31, 1994 March 31, 1994 Amount % Amount % Amount % _______________ _________________ ________________ Demand deposits $ 49,610 17.8% $ 46,290 17.0% $ 42,608 16.2% NOW accounts 38,043 13.6% 41,048 15.1% 41,853 15.9% Money market accounts 22,723 8.1% 27,955 10.2% 28,746 10.9% Savings deposits 33,633 12.1% 34,512 12.7% 31,961 12.1% Time deposits under $100,000 110,981 39.7% 105,067 38.5% 103,441 39.4% Time deposits $100,000 or more 11,727 4.2% 10,444 3.8% 10,308 3.9% _______ ______ _______ ______ _______ _____ Total deposits 266,717 95.5% 265,316 97.3% 258,917 98.4% Other borrowings 12,539 4.5% 7,362 2.7% 4,334 1.6% ________ ______ ________ ______ ________ ______ Average deposits and other borrowings $279,256 100.0% $272,678 100.0% $263,251 100.0%
OTHER INCOME Other income remained stable at $689,000 for the three months ended March 31, 1995 compared to $687,000 for the same 1994 period. Service fees related to NOW and demand accounts increased from $391,000 for the three months ended March 31, 1994 to $535,000 for the same 1994 period. This increase is primarily due to the additional fees collected relating to checking account overdrafts charges. Mortgage placement fees, which are fees the Company earns for originating residential first mortgage applications, declined $77,000 for the three months ending March 31, 1995 as compared the same 1994 period due to a slowdown in residential mortgage business. PROVISION FOR LOAN LOSSES The provision for loan losses charged to operations reflects management's analysis of the loan portfolio and determination of an adequate allowance for loan losses to provide for probable losses in the loan portfolio. The potential for loss in the portfolio reflects the risks and uncertainties inherent in the extension of credit. The determination of the adequacy of the allowance for loan loss is based upon management's assessment of risk elements in the portfolio, factors affecting loan quality and assumptions about the economic environment in which the Company operates. The Company utilizes a loan grading system, based upon FDIC parameters, and utilizes that assessment of the overall quality of the loan portfolio in the process of determining an adequate allowance for loan loss level. This system involves an ongoing review of the commercial and real estate loan portfolios, with added emphasis on the Company's larger commercial credits and nonperforming loans. Various factors are involved in determining the loan grade, including the cash flow and financial status of the borrower, the existence and nature of collateral, and general economic conditions and their impact on the borrower's industry. These reviews are dependent upon estimates, appraisals and judgments, which can change quickly due to economic conditions and the Company's perceptions as to how these conditions affect the collateral securing its current and past due loans as well as the borrower's economic prospects. In each reporting period, the allowance for loan losses is reviewed based on the most recent loan grading data and is adjusted to the amount deemed necessary, in the Company's judgment, to maintain adequate allowance for loan loss levels. The provision for loan losses charged against earnings in the first three months of 1995 was $1,394,000 compared with $827,000 in the same 1994 period. Net loan charge-offs for the three months ended March 31, 1995 and 1994 were $817,000 and $829,000, respectively. The Company's adoption of SFAS 114 requires that impaired loans, which are defined as loans where it is probable that a creditor will not be able to collect both the contractual interest and principal payments, be measured at the present value of expected future cash flows discounted at the loan's effective interest rate or, as a practical expedient, at the loan's observable market price or the fair value of the collateral, if the loan is collateral dependent, when assessing the need for a loss accrual. The adoption of SFAS 114 resulted in an additional provision for loan losses of approximately $500,000 during the first quarter of 1995. The Company anticipates that second and third quarter 1995 net charge-offs could approximate $1,300,000 to $1,500,000. Net charge-offs for the fourth quarter of 1995 should not exceed the level experienced by the Company during the first quarter of 1995. However, the Company anticipates that provision for loan losses for each of the remaining three quarterly periods of 1995 should not exceed the level experienced by the Company during the first quarter of 1995. In establishing the allowance for loan losses, management has considered the possible deterioration of the collateral securing its past due loans. As of March 31, 1995, the Company's allowance for loan losses was $7,404,000, or 3.56% of total loans, as compared to $9,495,000, or 4.65% of total loans, as of March 31, 1994. The allowance for loan losses was $6,827,000, or 3.30% as of December 31, 1994. The ratio of the allowance for loan losses to nonaccrual and restructured loans and accruing loans past due 90 days or more was 66.1% as of March 31, 1995 as compared to 69.3% and 39.3% as of December 31, 1994 and March 31, 1994, respectively. As of March 31, 1995, nonaccrual loans were $8,101,000 as compared with $7,043,000 as of December 31, 1994, and $8,836,000 as of March 31, 1994. The increase in nonaccrual loans during the first quarter of 1995 can be partially attributed to the Company's adoption of SFAS 114. The Company's SFAS 114 loan impairment analysis identified $812,000 of accruing loans(delinquent less than 90 days) as impaired and it was necessary, in management's judgment, to transfer these loans to a nonaccrual status during the first quarter of 1995. As of March 31, 1995, approximately $5,274,000 of the loans in the nonaccrual portfolio were collateralized partially by commercial or residential real estate or business assets and approximately $2,827,000 of nonaccrual loans were unsecured. The largest unsecured portion consists of 3 loan relationships that migrated to nonaccrual status during last half of 1994 which total $1,334,000. The Company is actively pursuing a workout plan for the orderly disposition of these loans. The Company believes that its allowance for loan losses is adequate to absorb any potential reduction of the net carrying value in the nonaccrual portfolio. The ratio of nonaccrual loans to total loans declined from 4.34% at March 31, 1994 to 3.89% at March 31, 1995. Accruing loans past due 90 days or more were $360,000 as of March 31, 1995, $357,000 as of December 31, 1994 and $1,207,000 as of March 31, 1994. The Company's nonaccrual policy states that any commercial or mortgage loan attaining a 90-day past due status is placed on nonaccrual unless such loan is well secured and in the process of collection. Exceptions to placement on nonaccrual status that extend beyond 120 days must be approved by the Board of Directors' Loan Committee. Any installment or consumer loan that attains a 180-day past due status will be placed on nonaccrual regardless of collateral value or collection proceedings. At March 31, 1995, loans totaling $103,000 were accruing past due 120-180 days. The Company has identified potential problem loans in the amount of $1,879,000 as of March 31, 1995. Potential problem loans are defined as loans where known information about possible credit problems of borrowers causes management to have serious doubts as to the ability of such borrowers to comply with the present loan repayment terms. These accruing commercial loans have experienced frequent delinquency problems. Twelve accruing loans with a principal balance of $759,000 have experienced 2 or more delinquencies between 60-89 days during the last five quarterly periods. In addition, twelve accruing loans with a principal balance of $1,120,000 have been delinquent 3 or more times between 30-59 days and at least once over 60 days during 1994. However, they continue to be less than 90 days delinquent as of March 31, 1995. If these credits continue to have financial difficulties, they could be classified as nonaccrual loans or become potential loan charge-offs in future quarterly periods. At March 31, 1995, December 31, 1994 and March 31, 1994, the Company had restructured loans of $2,740,000, $2,448,000 and $14,115,000, respectively. Interest income recorded on these loans during the three month periods ending March 31, 1995 and 1994 was $55,000 and $275,000, respectively. The weighted average yield on restructured loans was 6.96% and 6.52% during the three months ending March 31, 1995 and 1994, respectively. If these loans had earned interest in accordance with their original terms, interest income for the first three months of 1995 and 1994 would have been $9,000 and $82,000 higher, respectively. Management, after careful consideration of the above factors, is of the opinion that the allowance for loan losses as of March 31, 1995 is adequate. However, because the economic recovery in Connecticut appears to be progressing slower than in the nation, as a whole, it is difficult to predict how the future economy may impact the Company's loan customers. If economic conditions continue to slowly improve during 1995, management believes that the level of its nonaccrual loans could gradually decline during the next several quarterly periods. However, the level of the Company's nonperforming assets will continue to negatively impact the Company's profitability in future quarterly periods. The nature of the Connecticut economy will continue to influence the levels of loan charge-offs, nonaccrual loans and the allowance for loan losses, and management will appropriately adjust the allowance as considered necessary to reflect future changes in risk. The following tables set forth quarterly information on nonperforming assets, restructured loans, accruing loans past due 90 days or more and loans charged-off for the quarterly periods from March 31, 1994 to March 31, 1995.
ANALYSIS OF ALLOWANCE FOR LOAN LOSSES Quarter Ended (dollars in thousands) March 31, Dec. 31, Sept. 30, June 30, March 31, 1995 1994 1994 1994 1994 _________ ________ _________ ________ _________ Balance beginning of period $6,827 $6,695 $7,155 $9,495 $9,497 Provision charged to income 1,394 757 564 7,051 827 Loans charged off: Commercial 666 529 1,131 3,208 696 Real Estate: Commercial Mtg. 134 173 189 5,656 147 Residential Mtg. 40 0 0 574 0 Consumer 89 58 41 46 42 ______ ______ ______ ______ _______ Total Loans Charged-off 929 760 1,361 9,484 885 Recoveries 112 135 337 93 56 ______ ______ _______ ______ _______ Net loans charged-off 817 625 1,024 9,391 829 ______ ______ ______ ______ ______ Balance, end of period $7,404 $6,827 $6,695 $7,155 $9,495 Ratios: Net loans charged-off to avg. loans 0.39% 0.30% 0.50% 4.59% 0.42% Allowance for loan losses to total loans 3.56% 3.30% 3.22% 3.60% 4.65%
The Company incurred loan charge-offs of approximately $6,500,000 in connection with a sale of problem loans that was completed in the third quarter of 1994.
NONACCRUAL LOANS, RESTRUCTURED LOANS AND OTHER REAL ESTATE OWNED (in thousands) QUARTER ENDED March 31, Dec. 31, Sept. 30, June 30, March 31, 1995 1994 1994 1994 1994 ______________ _________ ________ _________ ________ ________ Nonaccrual loans: Commercial $ 3,368 $ 3,712 $ 3,595 $ 4,873 $ 4,210 Real Estate: Commercial 4,032 3,129 3,748 2,834 4,176 Residential 556 190 161 114 390 Consumer 145 12 60 60 60 ______ ______ ______ ______ ______ Total nonaccrual loans 8,101 7,043 7,564 7,881 8,836 Other Real Estate Owned - net 1,453 1,852 2,105 3,169 5,177 _______ ______ ______ _______ _______ Total nonperforming assets 9,554 8,895 9,669 11,050 14,013 Restructured loans 2,740 2,448 4,806 5,148 14,115 _______ _______ _______ _______ _______ Total nonperforming assets and restructured loans $12,294 $11,343 $14,475 $16,198 $28,128 Accruing loans past due 90 days or more: Commercial 164 88 240 66 1,046 Real Estate: Construction 0 0 0 0 0 Commercial 0 0 132 0 0 Residential 0 0 0 49 0 Consumer 196 269 292 231 161 ______ ______ ______ ______ ______ Total accruing loans past due 90 day or more $ 360 $ 357 $ 664 $ 346 $ 1,207 Allowance for loan losses $ 7,404 $ 6,827 $ 6,695 $ 7,155 $ 9,495 SFAS 114 impaired loans $ 8,705 Ratio of nonperforming assets to total assets 3.3% 3.0% 3.3% 3.8% 4.9% Ratio of nonperforming assets, restructured loans and accruing loans past due 90 days or more to total assets 4.3% 3.9% 5.2% 5.7% 10.3% Ratio of nonperforming assets to total loans and OREO 4.6% 4.3% 4.6% 5.5% 6.7% Ratio of nonperforming assets, restructured loans, and accruing loans past due 90 days or more to total loans and OREO 6.0% 5.6% 7.3% 8.3% 14.1% Ratio of allowance for loan losses to nonaccrual loans, restructured loans and accruing loans past due 90 days or more 66.1% 69.3% 51.4% 53.5% 39.3% Ratio of nonaccrual loans, restructured loans and accruing past due 90 days or more to shareholders' equity and allowance for loan losses 54.5% 51.3% 67.9% 68.1% 82.9%
OTHER REAL ESTATE OWNED Other Real Estate Owned (OREO) expense was $169,000 for the three month period ended March 31, 1995 as compared to $366,000 for the three months ended March 31, 1994. These expenses reflect losses on sales and writedowns on OREO properties and associated direct holding costs, such as property taxes, insurance and utilities. OREO holding costs were $24,000 and $85,000 for the three month periods ended March 31, 1995 and 1994, respectively. The OREO balance as of March 31, 1995 is $1,453,000 and was comprised of 10 properties. The OREO portfolio consists of 2 residential properties, representing 12% of the total OREO portfolio, and 4 commercial properties which constitutes 50% of the total OREO portfolio. In addition, the Company has 4 parcels of land which total $555,000 which includes a $439,000 approved residential subdivision. OREO properties are carried at the lower of carrying value of the related loan or fair value of the foreclosed property at date acquired through foreclosure less the cost to dispose. Fair value of OREO properties is determined using the Company's most recent appraisal or a more recent broker's valuation. In order to facilitate the sale and ultimate disposition of OREO, the Bank may finance the sale of a property at market rates to qualified, credit-worthy borrowers. The Company values its OREO properties based on an asset by asset review and on the assumption that an active market exists for those properties. The Company's primary valuation technique is to derive values from available comparable sales data and not from other evaluation criteria such as discounted cash flows. In making the assumption that an active market exists for OREO properties, the Company has made the determination that the properties are salable within approximately one year, and has valued each property at an amount which the Company anticipates will permit the sale of such property within approximately one year. Although the Company actively markets all OREO properties for sale, no assurance can be given that properties will actually sell in approximately one year, such sales being dependent upon relevant market conditions which will vary from property to property, and include such factors as the number of comparable properties available for purchase at the time, the availability of financing and the stability or trends of real estate values in the area. The following table reflects OREO activity for the last five quarterly periods.
OTHER REAL ESTATE OWNED QUARTERLY ANALYSIS (dollars in thousands) QUARTER ENDED DESCRIPTION 03/31/95 12/31/94 09/30/94 06/30/94 03/31/94 _______________________ ________ ________ ________ ________ ________ Beginning book value $1,852 $2,105 $3,169 $5,177 $5,993 Properties added 42 101 23 305 86 Proceeds from OREO sold (296) (186) (590) (2,005) (435) Gains(losses) on properties sold 14 (35) (24) (5) (12) Other activity (8) (157) (129) (186) Property writedowns (159) (125) (316) (174) (269) _______ _______ _______ _______ _______ Ending book value $1,453 $1,852 $2,105 $3,169 $5,177
OPERATING EXPENSES Operating expenses decreased $317,000, or 10%, from $3,209,000 for the three months ending March 31, 1994 to $2,892,000 for the same 1995 period. OREO expense and examination and professional fees were primarily responsible for the decrease in operating expenses during the first three months of 1995 as compared to the same 1994 period. OREO expense comprised of losses on sales and writedowns on OREO properties and associated direct holding costs declined $197,000, or 54%, from $366,000 for the three months ended March 31, 1994 to $169,000 for the same 1995 period. Examination and professional fees decreased $46,000, or 24%, from $194,000 as of March 31, 1994 to $148,000 for the same 1995 period which resulted from lower legal expenses related to problem assets. Salaries and employee benefits remained flat at $1,371,000 for the first three months of 1994 as compared to $1,362,000 for the same 1995 period. The Company's full-time equivalent positions as of March 31, 1995 is 140 as compared to 142 as of March 31, 1994. PROVISION(BENEFIT) FOR INCOME TAXES The Company accounts for income taxes in accordance with the provisions of the Statement of Financial Accounting Standard No. 109 "Accounting for Income Taxes" ("SFAS 109"). As a result of the Company's net operating losses in prior years, it has federal and state tax net operating loss carryforwards of approximately $20.6 million and $30.8 million as of March 31, 1995, respectively. Such net operating loss carryforwards can be used to offset future taxable income based upon management's estimate of the amount of taxable income to be generated in future periods. Gross deferred tax assets and gross deferred tax liabilities were $14.7 million and $0.6 million, respectively, as of March 31, 1995. A valuation allowance has been established of $13.6 million for a portion of deferred tax assets. The deferred tax assets after the valuation allowance were $504,000 as of March 31, 1995 and included in other assets. Management believes that it is "more likely than not" that these deferred tax assets will be realized from the utilization of tax benefit carryforwards in future periods. The federal tax net operating loss carryforwards expire in the years from 1997 to 2009 and the state tax net operating loss carryforwards expire from 1995 to 1999. The income tax benefit of $504,000 was offset by state and alternative minimum federal taxes of $18,500 for the three months ended March 31, 1995. CAPITAL ADEQUACY The Company and the Bank are subject to the capital adequacy rules of several regulators. Effective December 19, 1992, each federal banking agency issued final rules to carry out the "prompt corrective action" provisions of the Federal Deposit Insurance Corporation Improvement Act of 1991 (the "Improvement Act"). The regulations adopted, among other things, defined capital measures and the capital thresholds for each of the five capital categories established in the statute and established a uniform schedule for filing of capital restoration plans by undercapitalized institutions. The following table identifies generally the capital measures and thresholds defined under the FDIC and Federal Reserve Board rules.
Total Tier 1 Tier 1 Risk-Based Risk-Based Leverage Ratio Ratio Ratio ______________ _____________ _________ Well Capitalized 10% or above & 6% or above & 5% or above Adequately Capitalized 8% or above & 4% or above & 4% or above Undercapitalized Under 8% or Under 4% or Under 4% Significantly Undercapitalized Under 6% or Under 3% or Under 3% Critically Undercapitalized A ratio of tangible equity to total assets equal to or under 2%
To fall within the well capitalized or adequately capitalized capital category, the financial institution must meet the requirements of all three capital measurements. Undercapitalized and significantly undercapitalized institutions will be categorized as such if the institution falls within any of those three capital measurements. The risk-based capital guidelines establish a measurement of capital adequacy by relating a banking organization's capital to its financial risks, both on- and off-balance sheet. As of March 31, 1995, December 31, 1994 and March 31, 1994, the Company's total risk-based capital ratio was 8.3%, 8.1%, 10.7%, respectively. The second capital measure is the Tier 1 risk-based ratio, which includes only core capital as it measures the relationship to risk-weighted assets. As of March 31, 1995, December 31, 1994 and March 31, 1994, the Company's Tier 1 risk-based ratio was 7.0%, 6.8%, and 9.4%, respectively. The third capital adequacy measure is the Tier 1 (or core) leverage capital (using the same definition of capital as used in the risk-based guidelines) to average total assets. The Company's Tier 1 leverage ratio was 4.8%, 4.7%, and 6.9% as of March 31, 1995, December 31, 1994 and March 31, 1994, respectively. As of March 31, 1995, based on the above criteria, the Company falls within the adequately capitalized category. As of March 31, 1995, December 31, 1994 and March 31, 1994, the Bank's total risk-based capital ratio was 8.2%, 8.0% and 10.4%, respectively, while its Tier 1 risk-based capital ratio was 6.9%, 6.8% and 9.1%, respectively, and its Tier 1 leverage ratio was 4.8%, 4.7%, and 6.7%, respectively. As of March 31, 1995, based on the above criteria, the Bank falls within the adequately capitalized category. The reporting of debt and equity securities (not held for trading activities or to maturity) for the purposes of calculating Tier 1 capital for the Company and the Bank differs from reporting under SFAS 115. Under final FDIC regulations, net unrealized losses for equity securities that are available for sale are included in the calculation of Tier 1 capital. All other net unrealized gains or losses on available for sale securities are excluded from the definition of Tier 1 capital. As of March 31, 1995, Tier 1 capital was reduced $218,000 to reflect the unrealized depreciation on the Company's equity securities held as available for sale. At the conclusion of its regulatory examination, the FDIC, based on the Bank's improved overall financial condition, has recommended the removal of the Order and will issue a less stringent Memorandum of Understanding. See "Regulatory Matters" for further discussion. The Company's principal subsidiary, The Bank of New Haven, voluntarily agreed to enter into the Memorandum effective in the near future. The Memorandum will require, among other things, the Bank to achieve certain Tier 1 leverage and total risk-based capital requirements. The Bank must improve its Tier 1 leverage capital ratio to 5% by June 30, 1996 and to 6% by June 30, 1997. If these thresholds are not achieved, the Bank will be required to submit a written capital plan to increase its Tier 1 leverage capital to the required level. Also, the Bank will be required to maintain a total risk-based capital ratio of at least 8% throughout the existence of the Memorandum. The Bank's Tier 1 leverage ratio is currently below the Memorandum's minimum level of 5%, but it exceeds the total risk-based capital ratio requirement. The Company anticipates that it will achieve the minimum Tier 1 leverage capital ratio requirements through future earnings. The Improvement Act also requires each federal banking agency to revise its risk-based capital standards for insured institutions to ensure that those standards take adequate account of interest rate risk, concentration of credit risk, and risks of nontraditional activities and reflect the actual performance and expected risk of loss on multi-family residential loans. While the FDIC has published proposed regulations for the purpose of amending its risk-based capital standards, the Company cannot predict what may be required under any final regulations that may be adopted. Such regulations could, however, further increase the regulatory capital requirements which are applicable to the Company and the Bank. LIQUIDITY AND INTEREST RATE SENSITIVITY The liquidity process is monitored by the Company's Asset Liability Committee ("ALCO"), which meets regularly to implement its asset/liability and funds management policy. ALCO's role is to evaluate liquidity and interest rate risk and their impact on earnings. The Committee developed a reporting system that integrates the current interest rate environment of the national and local economy with the maturities and the repricing schedules of both the assets and liabilities of the Company. The objective of ALCO is to manage the Company's assets and liabilities to provide an optimum and stable net interest margin and to facilitate a constant level of net interest income. The primary focus of the Company's liquidity management is appropriately to match cash inflows and outflows with funds provided by the Company's market for deposits and loans. The Company's objective is to maintain adequate cash which is invested in federal funds. During the first three months of 1995, the average balance of federal funds sold was $534,000. In the event the Company needs to borrow cash to manage its overnight position or short-term position, the Company can borrow up to 2% of its assets, $5,980,000 as of March 31, 1995, on an overnight basis from the Federal Home Loan Bank of Boston. As of March 31,1995, the Company had no overnight borrowings outstanding from the Federal Home Loan Bank of Boston. In addition, the Company has access to $7,000,000 in short-term funds via reverse repurchase agreements with two brokerage firms. The Company's investment portfolio also provides a secondary source of liquidity. At March 31, 1995, the Company's liquidity ratio as defined by FDIC criteria was 25.2% compared to 25.9% and 26.5% as of December 31, 1994 and March 31, 1994. The liquidity ratio is defined as the total of net cash, short-term investments and other marketable assets, divided by total net deposits and short-term liabilities. Management believes that its liquidity position is adequate as of March 31, 1995. Effective January 1, 1994, the Company adopted the provisions of the Statement of Financial Accounting Standard No. 115 ("SFAS 115"), "Accounting for Certain Investments in Debt and Equity Securities". Under SFAS 115, debt securities classified as held to maturity are reported at amortized cost. Debt and equity securities (not held for trading activities or to maturity) are reported at fair value with unrealized gains or losses excluded from income and reported as a separate component of shareholders' equity. In order to classify securities as held to maturity, management must have the positive intent and ability to hold the securities to maturity. The adoption and ongoing compliance with SFAS 115 on January 1, 1994 has not had an adverse effect on the Company's net interest margin, regulatory capital ratios or ability to meet its liquidity obligations. The Company generated a negative aggregate cash flow of $6,798,000 for the three months ended March 31, 1995, as compared to a positive aggregate cash flow of $3,010,000 for the same 1994 period. Cash flows provided by operating activities were $1,574,000 and $1,014,000 for the three months ending March 31, 1995 and March 31, 1994, respectively. This was due in part to significant non-cash charges for the provision for loan losses and writedowns on OREO. Net cash used by financing activities was $6,781,000 and $1,920,000 for the three months ending March 31, 1995 and 1994, respectively. Net cash used by financing activities was primarily due to an aggregate decrease in core deposits and federal funds purchased and offset by an increase in time deposits and FHLB Advances for the three month period ending March 31, 1995. For the three month period ending March 31, 1994, net cash used by financing activities was primarily due to decreases in core and time deposits and were offset by proceeds from federal funds purchased and FHLB Advances. Net cash used by investing activities were $1,591,000 for the three months ending March 31, 1995 as compared net cash provided of $3,915,000 for the three months ended March 31, 1994. The cash used by investing activities for the three months ended March 31, 1995 was primarily due to an increase in net loans originated and federal funds sold and offset by maturities of investment securities. For the three months ended March 31, 1994, cash provided by investing activities was due to an decrease in federal funds sold and investment securities maturities and offset by a increase in net loans originated. The Company concentrates its efforts on evaluating interest rate risk and appropriately adjusts for changes in rates and maturities of its assets and liabilities. The Company's objective is to provide stable net interest income. The table below illustrates the ratio of rate sensitive assets to rate sensitive liabilities as they mature and/or reprice within the indicated periods. As of March 31, 1995, the Company's rate sensitive assets repricing or maturing approximately equalled its rate sensitive liabilities during the first ninety days. This results from having approximately 42% of the Company's loan portfolio available to reprice within thirty days. In an increasing rate environment, asset sensitivity enhances earnings potential, whereas liability sensitivity would negatively impact earnings. In contrast, in a declining rate environment, asset sensitivity would negatively impact earnings, whereas liability sensitivity enhances earnings potential. The Company is "liability sensitive" between the periods of six to twelve months and beyond one year which is primarily due to its demand and savings accounts, which are considered relatively stable and not easily influenced by changes in interest rates. At March 31, 1995, the amount of the Company's cumulative gap with respect to assets and liabilities maturing or repricing within one year was $7,235,000 more liabilities than assets repricing (a negative gap position), representing a negative 3% cumulative gap to total rate sensitive assets. ALCO manages the gap position on an ongoing basis to assure an interest rate risk not to exceed more than a 3% change in net interest income for a one year period. If interest rates were to immediately increase by 200 basis points, the negative impact on the Company would be within ALCO's tolerance level. The following table sets forth the distribution of the repricing of the Company's earning assets and interest bearing liabilities at a single point in time, as of March 31, 1995. The table shows the interest rate sensitivity gap (i.e., interest rate sensitive assets less interest rate sensitive liabilities), the cumulative interest rate sensitivity gap, the interest rate sensitivity gap ratio (i.e., interest rate sensitive assets divided by interest rate sensitive liabilities) and the cumulative interest rate sensitivity gap ratio. The table also sets forth the time periods in which interest earning assets and interest bearing liabilities will mature or may reprice in accordance with their contractual terms. However, the table does not necessarily indicate the impact of general interest rate movements on the net interest margin since the Company's repricing of various categories of assets and liabilities is subject to competitive pressures and the needs of the Company's customers. The Company's interest rate sensitivity position is adjusted as ALCO's assessment of the interest rate outlook and other factors are modified. As the Company increases its total assets, the overall business plan provides for matching its assets and liabilities to reduce interest rate risk and liquidity risk.
INTEREST - RATE SENSITIVITY TABLE (dollars in thousands) March 31, 1995 Month 1 Month 2 Month 3 ______________________ _______ _______ _______ Rate Sensitive Assets: Loans $84,450 $4,045 $2,421 Investments 8,592 2,995 3,346 _______ ______ ______ Total Rate Sensitive Assets 93,042 7,040 5,767 Rate Sensitive Liabilities: Time deposits 12,525 9,891 8,438 Other deposits 70,156 2,000 0 _______ ______ ______ Total Rate Sensitive Liabilities 82,681 11,891 8,438 Net Gap 10,361 (4,851) (2,671) ______ ______ ______ Cumulative Gap 10,361 5,510 2,839 Net Gap as % of total rate sensitive assets 4% -2% -1% Cumulative Gap as % of total rate sensitive assets 4% 2% 1%
INTEREST - RATE SENSITIVITY TABLE (dollars in thousands) March 31, 1995 Months Months Over Total 4-6 7-12 1 Year ______________________ ______ ______ ______ _____ Rate Sensitive Assets: Loans $ 8,872 $23,799 $ 76,384 $199,971 Investments 9,453 9,020 35,046 68,452 _______ _______ ________ ________ Total Rate Sensitive Assets: 18,325 32,819 111,430 268,423 Rate Sensitive Liabilities: Time deposits 11,115 44,603 39,728 126,300 Other deposits 2,500 3,000 75,233 152,889 _______ _______ ________ ________ Total Rate Sensitive Liabilities: 13,615 47,603 114,961 279,189 Net Gap 4,710 (14,784) (3,531) (10,766) _______ _______ _______ ________ Cumulative Gap 7,549 (7,235) (10,766) (10,766) Net Gap as % of total rate sensitive assets 2% -6% -1% -4% Cumulative Gap as % of total rate sensitive assets 3% -3% -4% -4%
Excludes nonaccrual loans. The Company has assumed that 100% of money market and NOW accounts will reprice within 30 days based on local market conditions. The Company has assumed that 90% of demand and savings deposits will not be withdrawn in less than one year based on its analysis of Bank and industry experiences for the rate of runoff of such deposits. PART II - OTHER INFORMATION ITEMS 1-5 Not applicable. ITEM 6 Exhibits and Reports on Form 8-K: (a) Exhibits-Exhibit 27 Financial Data Schedule (b) Form 8-K: None 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. Date: May 12, 1995 /s/ F. Patrick McFadden, Jr. ________________________________ F. Patrick McFadden, Jr. President/Chief Executive Officer Date: May 12, 1995 /s/ John F. Trentacosta ________________________________ John F. Trentacosta Chief Financial Officer EX-27 2
9 This schedule contains Summary Financial Information extracted from the Quarterly Report on Form 10-Q for the period ended 03/31/95 and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS DEC-31-1995 MAR-31-1995 15,214 0 3,575 0 28,184 36,693 0 208,071 7,404 293,310 268,611 1,541 957 9,036 148 0 0 13,017 293,310 4,592 971 8 5,571 2,050 2,237 3,334 1,394 0 2,892 (264) (264) 0 0 222 0.2 0.2 4.88 8,101 360 2,740 1,879 6,827 929 112 7,404 7,404 0 0 Not reported on a quarterly basis.
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