0000799166-95-000005.txt : 19950815 0000799166-95-000005.hdr.sgml : 19950815 ACCESSION NUMBER: 0000799166-95-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MASSBANK CORP CENTRAL INDEX KEY: 0000799166 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 042930382 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15137 FILM NUMBER: 95562612 BUSINESS ADDRESS: STREET 1: 123 HAVEN STREET CITY: READING STATE: MA ZIP: 01867 BUSINESS PHONE: 6179428192 MAIL ADDRESS: STREET 1: 123 HAVEN STREET CITY: READING STATE: PA ZIP: 01867 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q /x/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1995 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from______________to____________ Commission File Number 0-15137 MASSBANK Corp. (Exact name of registrant as specified in its charter) Delaware 04-2930382 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 123 HAVEN STREET Reading, Massachusetts 01867 (Address of principal executive offices, including Zip Code) Registrant's telephone number, including area code: (617) 662-0100 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 [ ] The number of shares outstanding of the issuer's classes of common stock, as of the latest practicable date is: Class: Common stock $1.00 per share. Outstanding at July 31, 1995: 2,731,994 shares. MASSBANK CORP. AND SUBSIDIARIES INDEX PART I - FINANCIAL INFORMATION Page ITEM 1. Financial Statements Consolidated Balance Sheets as of June 30, 1995 (unaudited) and December 31, 1994 3 Consolidated Statements of Income (unaudited) for the three months ended June 30, 1995 and 1994 4 and for the six months ended June 30, 1995 and 1994 5 Consolidated Statements of Changes in Stockholders' Equity for the six months ended June 30, 1995 (unaudited) and the year ended December 31, 1994 6 Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 1995 and 1994 7 - 8 Condensed Notes to the Consolidated Financial Statements 9 - 12 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13 - 24 PART II - OTHER INFORMATION ITEM 1. Legal Proceedings 25 ITEM 2. Changes in Securities 25 ITEM 3. Defaults Upon Senior Securities 25 ITEM 4. Submission of Matters to a Vote of Security Holders 25 ITEM 5. Other Information 25 ITEM 6. Exhibits and Reports on Form 8-K 25 Signature Page 26 2 MASSBANK CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands except share data)
June 30, December 31, 1995 1994 (unaudited) Assets: Cash and due from banks $ 10,517 $ 9,610 Federal funds sold 75,937 22,551 Interest bearing deposits 900 -- Other short-term investments 8,032 -- ______________________________________________________________________________ Total cash and cash equivalents 95,386 32,161 Term federal funds sold 25,000 -- Investment securities (Note 4) 411 567 Mortgage-backed securities (Note 4) 185,057 172,263 Securities available for sale (Note 5) 246,553 257,644 Trading securities, at market value 36,312 115,610 Loans: Mortgage loans 212,338 220,269 Other loans 29,644 30,547 Less allowance for possible loan losses (2,568) (2,566) ______________________________________________________________________________ Net loans 239,414 248,250 Premises and equipment 4,312 4,328 Real estate acquired through foreclosure or substantively repossessed 430 129 Accrued interest receivable 6,463 6,870 Other assets 1,485 5,825 ______________________________________________________________________________ Total assets $840,823 $843,647 Liabilities and Stockholders' Equity: Deposits: Demand and NOW $ 66,375 $ 67,496 Savings 376,317 458,401 Time certificates of deposit 306,519 235,421 Deposit acquisition premium, net of amortization (1,526) (1,642) ______________________________________________________________________________ Total deposits 747,685 759,676 Escrow deposits of borrowers 1,050 966 Employee stock ownership plan loan 1,249 1,249 Other liabilities 7,933 7,252 ______________________________________________________________________________ Total liabilities 757,917 769,143 Stockholders' Equity: Preferred stock, par value $1.00 per share; 2,000,000 shares authorized, none issued -- -- Common stock, par value $1.00 per share; 10,000,000 shares authorized, 5,373,138 and 5,352,138 shares issued, respectively 5,373 5,352 Additional paid-in capital 55,931 55,609 Retained earnings 55,332 51,995 Treasury stock at cost, 2,635,911 and 2,570,411 shares, respectively (34,932) (33,288) Net unrealized gains (losses) on securities available for sale, net of tax effect 2,451 (3,915) Common stock acquired by ESOP (1,249) (1,249) ______________________________________________________________________________ Total stockholders' equity 82,906 74,504 ______________________________________________________________________________ Total liabilities and stockholders' equity $840,823 $843,647 See accompanying condensed notes to consolidated financial statements. 3
MASSBANK CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three months ended June 30, (In thousands except share data) 1995 1994 _____________________________________________________________________________ Interest and dividend income: Mortgage Loans $ 4,146 $ 4,291 Other loans 752 596 Mortgage-backed securities 3,137 2,768 Securities available for sale 4,004 3,174 Trading securities 760 1,524 Federal funds sold 1,373 266 Other investments 48 8 ______________________________________________________________________________ Total interest and dividend income 14,220 12,627 ______________________________________________________________________________ Interest expense: Deposits 7,680 6,384 Borrowed funds -- 1 ______________________________________________________________________________ Total interest expense 7,680 6,385 ______________________________________________________________________________ Net interest income 6,540 6,242 Provision for possible loan losses 40 250 ______________________________________________________________________________ Net interest income after provision for possible loan losses 6,500 5,992 Non-interest income: Deposit account service fees 233 247 Gains (losses) on securities, net 35 (570) Interest on tax settlements 51 1,188 Other 290 298 ______________________________________________________________________________ Total non-interest income 609 1,163 ______________________________________________________________________________ Non-interest expense: Salaries and employee benefits 1,832 1,729 Occupancy and equipment 500 514 Data processing 153 159 Professional services 118 131 Deposit insurance 440 445 Real estate acquired through foreclosure expenses 24 69 Write-down in loan valuation premium -- 282 Other 490 508 ______________________________________________________________________________ Total non-interest expense 3,557 3,837 ______________________________________________________________________________ Income before income taxes 3,552 3,318 Income tax expense 1,383 1,224 ______________________________________________________________________________ Net income $ 2,169 $ 2,094 ______________________________________________________________________________ Earnings per share (in dollars): Earnings per common and common equivalent share $ 0.78 $ 0.73 ______________________________________________________________________________ Weighted average common shares and common stock equivalents outstanding 2,789,240 2,855,772 ______________________________________________________________________________ See accompanying condensed notes to consolidated financial statements. 4
MASSBANK CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Six months ended June 30, (In thousands except share data) 1995 1994 ______________________________________________________________________________ Interest and dividend income: Mortgage Loans $ 8,364 $ 8,569 Other loans 1,420 1,177 Mortgage-backed securities 6,225 4,899 Securities available for sale 8,006 6,569 Trading securities 1,850 2,849 Federal funds sold 2,148 724 Other investments 55 28 ______________________________________________________________________________ Total interest and dividend income 28,068 24,815 ______________________________________________________________________________ Interest expense: Deposits 14,868 12,573 Borrowed funds -- 1 ______________________________________________________________________________ Total interest expense 14,868 12,574 ______________________________________________________________________________ Net interest income 13,200 12,241 Provision for possible loan losses 110 370 ______________________________________________________________________________ Net interest income after provision for possible loan losses 13,090 11,871 Non-interest income: Deposit account service fees 460 496 Gains (losses) on securities, net 39 (545) Interest on tax settlements 51 1,188 Other 487 519 ______________________________________________________________________________ Total non-interest income 1,037 1,658 ______________________________________________________________________________ Non-interest expense: Salaries and employee benefits 3,648 3,400 Occupancy and equipment 1,008 1,096 Data processing 305 323 Professional services 231 266 Deposit insurance 879 898 Real estate acquired through foreclosure expenses 75 121 Write-down in loan valuation premium -- 282 Other 932 1,017 ______________________________________________________________________________ Total non-interest expense 7,078 7,403 ______________________________________________________________________________ Income before income taxes 7,049 6,126 Income tax expense 2,754 2,247 ______________________________________________________________________________ Net income $ 4,295 $ 3,879 _____________________________________________________________________________ Earnings per share (in dollars): Earnings per common and common equivalent share $ 1.54 $ 1.34 ______________________________________________________________________________ Weighted average common shares and common stock equivalents outstanding 2,793,204 2,900,364 ______________________________________________________________________________ See accompanying condensed notes to consolidated financial statements. 5
MASSBANK CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY For The Six Months Ended June 30, 1995 (unaudited) and the Year Ended December 31, 1994 (In thousands except share data)
NET UNREALIZED GAINS (LOSSES) ON SECURITIES COMMON ADDITIONAL AVAILABLE FOR STOCK COMMON PAID-IN RETAINED TREASURY SALE, NET OF ACQUIRED STOCK CAPITAL EARNINGS STOCK TAX EFFECT BY ESOP TOTAL ________ __________ _________ __________ __________ ________ ________ Balance at December 31, 1993 $ 3,522 $56,300 $45,502 $(28,225) $ 4,152 $(1,176) $80,075 Net income -- -- 8,185 -- -- -- 8,185 Cash dividends declared ($0.60 per share) -- -- (1,692) -- -- -- ( 1,692) Net increase in liability to ESOP -- -- -- -- -- ( 73) ( 73) Purchase of treasury stock -- -- -- (5,063) -- -- (5,063) Stock options exercised 54 1,085 -- -- -- -- 1,139 Transfer resulting from three-for-two stock split 1,776 (1,776) -- -- -- -- -- Change in net unrealized gains (losses) on securities available for sale, net of tax effect -- -- -- -- (8,067) -- (8,067) ____________________________________________________________________________________________________________________ Balance at December 31, 1994 5,352 55,609 51,995 (33,288) (3,915) (1,249) 74,504 Net Income -- -- 4,295 -- -- -- 4,295 Cash dividends declared ($0.35 per share) -- -- (958) -- -- -- (958) Purchase of treasury stock -- -- -- (1,644) -- -- (1,644) Stock options exercised 21 322 -- -- -- -- 343 Change in net unrealized gains (losses) on securities available for sale, net of tax effect -- -- -- -- 6,366 -- 6,366 _____________________________________________________________________________________________________________________ Balance at June 30, 1995 $ 5,373 $55,931 $55,332 $(34,932) $ 2,451 $(1,249) $82,906 _____________________________________________________________________________________________________________________ See accompanying condensed notes to consolidated financial statements. 6
MASSBANK CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Six Months Ended June 30, 1995 1994 ____ ____ (In thousands) Cash flows from operating activities: Net income $ 4,295 $ 3,879 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation & amortization 241 255 Amortization of deposit acquisition premium 116 115 Amortization of loan valuation premium 32 329 Decrease in accrued interest receivable 407 1,005 Increase in other liabilities 553 4,002 Decrease in accrued and deferred income taxes payable (513) (146) Accretion of discounts on securities, net of amortization of premiums (565) (241) Net trading securities activity 79,808 (7,911) (Gains) losses on securities available for sale (510) 922 (Gains) losses on trading securities 422 (377) Increase (decrease) in deferred mortgage loan origination fees, net of amortization (42) 35 Decrease (increase) in deferred income tax asset, net 399 (1,453) Decrease (increase) in other assets (316) 160 Loans originated for sale (214) (1,034) Loans sold 214 1,285 Provision for possible loan losses 110 370 Provision for losses and writedowns on real estate acquired through foreclosure or substantively repossessed 19 36 Increase in escrow deposits of borrowers 84 12 ______________________________________________________________________________ Net cash provided by operating activities 84,540 1,243 ______________________________________________________________________________ Cash flows from investing activities: Purchases of term federal funds (40,000) -- Proceeds from maturities of term federal funds 15,000 -- Proceeds from sales of securities available for sale 36,312 16,210 Proceeds from maturities of investment securities and securities available for sale 28,147 98,207 Purchases of securities available for sale (44,889) (74,443) Purchases of mortgage-backed securities (18,687) (61,501) Principal repayments of mortgage-backed securities 8,969 19,024 Principal repayments of tax-exempt bonds 9 9 Loans originated (9,227) (32,093) Loan principal payments received 17,570 25,310 Purchases of premises & equipment (225) (297) Proceeds from sale of real estate acquired through foreclosure 80 532 Net advances on real estate acquired through foreclosure (7) -- ______________________________________________________________________________ Net cash (used in) investing activities (6,948) (9,042) ______________________________________________________________________________ 7
MASSBANK CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (unaudited)
Six Months Ended June 30, 1995 1994 ____ ____ (In thousands) Cash flows from financing activities: Net increase (decrease) in deposits (12,107) 2,382 Net increase in borrowed funds -- 85 Payments to acquire treasury stock (1,644) (3,105) Issuance of common stock under stock option plan 257 273 Tax benefit resulting from stock options exercised 85 143 Dividends paid on common stock (958) (795) ______________________________________________________________________________ Net cash (used in) financing activities (14,367) (1,017) ______________________________________________________________________________ Net increase (decrease) in cash and cash equivalents 63,225 (8,816) Cash and cash equivalents at beginning of period 32,161 35,177 ______________________________________________________________________________ Cash and cash equivalents at end of period $95,386 $26,361 ______________________________________________________________________________ Supplemental cash flow disclosures: Cash transactions: Cash paid during the year for interest $14,869 $12,574 Cash paid during the year for taxes, net of refunds 2,735 2,534 Non-cash transactions: SFAS 115: Increase (decrease) in stockholders' equity 6,366 (5,331) Increase (decrease) in deferred tax (assets) liabilities 4,832 (4,048) Foreclosures and in-substance foreclosures 410 142 ______________________________________________________________________________ See accompanying condensed notes to consolidated financial statements. Disclosure of accounting policy: For purposes of reporting cash flows, cash and cash equivalents consist of cash and due from banks, federal funds sold and term federal funds sold with original maturities of less than 90 days.
8 MASSBANK CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (1) Basis of Presentation The financial condition and results of operations of MASSBANK Corp. (the "Company") essentially reflect the operations of its subsidiary, MASSBANK for Savings (the "Bank"). All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles, and in the opinion of management, include all adjustments of a normal recurring nature necessary for the fair presentation of the financial condition of the Company as of June 30, 1995 and December 31, 1994, operating results for the three months ended June 30, 1995 and 1994, and cash flows for the six months ended June 30, 1995 and 1994. The results of operations for any interim period are not necessarily indicative of the results to be expected for the entire year. Certain amounts in the prior years' consolidated financial statements have been reclassified to permit comparison with the current fiscal year. The information in this report should be read in conjunction with the financial statements and related notes included in the Annual Report on Form 10-K for the year ended December 31, 1994. (2) Common Stock In July, 1994, the Company declared a three-for-two split of the common stock of the Company, to be effected by means of a 50 percent stock distribution. One share for each two shares held by shareholders of record on August 26, 1994, was distributed on September 9, 1994. Prior year weighted average common shares and common stock equivalents outstanding and earnings per share amounts appearing in the consolidated financial statements have been restated to reflect the three-for-two stock split of September, 1994 to permit comparison with the current fiscal year. (3) Earnings Per Common Share The computation of earnings per common share for the three months and six months ended June 30, 1995 and 1994 is based on the weighted average number of shares of common stock and common stock equivalents outstanding during the period. Stock options, when dilutive are included as common stock equivalents using the Treasury stock method. 9 (4) Securities Held To Maturity The book value and approximate market value of investment securities and mortgage-backed securities held to maturity are as follows:
__________________________________________________________________________________________ At At (In thousands) June 30, 1995 December 31, 1994 __________________________________________________________________________________________ Amortized Market Amortized Market Cost Value Cost Value ________ ________ ________ _______ (unaudited) Investment Securities: Other bonds and obligations $ 411 $ 411 $ 567 $ 563 ________ ________ ________ ________ Total investment securities $ 411 $ 411 $ 567 $ 563 ________ ________ ________ ________ Mortgage-Backed Securities: Government National Mortgage Association $ 86,447 $ 86,965 $ 90,153 $ 84,457 Federal Home Loan Mortgage Corporation 83,235 83,448 64,921 61,174 Federal National Mortgage Association 14,505 14,987 16,220 16,237 Other 870 916 969 998 _________ ________ ________ ________ Total mortgage-backed securities $185,057 $186,316 $172,263 $162,866
Investment and mortgage-backed securities are stated at cost, adjusted for amortization of premiums and accretion of discounts, using a method that approximates the level-yield method. An analysis of unrealized gains and losses on investment and mortgage-backed securities held to maturity is as follows:
__________________________________________________________________________________________ (In thousands) June 30, 1995 December 31, 1994 __________________________________________________________________________________________ Unrealized Unrealized Gains Losses Gains Losses ________ ________ ________ ________ (unaudited) Other bonds and obligations $ -- $ -- $ -- $ (4) Mortgage-backed securities 2,589 (1,330) 229 (9,626) ________ ________ ________ _________ Total unrealized gains (losses) $ 2,589 $(1,330) $ 229 $ (9,630)
10 (5) Securities Available For Sale The amortized cost and approximate market values of securities available for sale are as follows:
__________________________________________________________________________________________ (In thousands) June 30, 1995 December 31, 1994 __________________________________________________________________________________________ Amortized Market Amortized Market Cost Value Cost Value ________ ________ ________ ________ (unaudited) U.S. Treasury obligations $225,402 $227,892 $250,354 $242,787 U.S. Government agency obligations 8,990 9,167 5,987 6,043 Other bonds and obligations 1,994 1,985 1,992 1,914 Marketable and other equity securities 5,855 7,509 6,197 6,900 ________ ________ ________ ________ Total securities available for sale $242,241 $246,553 $264,530 $257,644 ________ ________ ________ ________
Securities held for indefinite periods of time and not intended to be held to maturity are classified as available for sale. The Company records securities available for sale at aggregate market value with the net unrealized holding gains or losses reported net of tax effect, as a separate component of stockholders' equity until realized. Gains or losses on sales of securities are recognized at the time of sale using the specific identification method. An analysis of unrealized holding gains and losses on securities available for sale is as follows:
__________________________________________________________________________________________ (In thousands) June 30, 1995 December 31, 1994 __________________________________________________________________________________________ Unrealized Unrealized Gains Losses Gains Losses ______ ______ ______ ______ (unaudited) U.S. Treasury obligations $3,073 $ (583) $ 146 $(7,713) U.S. Government agency obligations 177 -- 56 -- Other bonds and obligations 5 (14) -- (78) Marketable and other equity securities 1,660 (6) 792 (89) _______ _______ _______ _______ Total unrealized gains (losses) $4,915 $ (603) $ 994 $(7,880) _______ ________ _______ _______
(6) Trading Securities Investments classified as trading securities are stated at market with unrealized gains and losses included in earnings. 11 (7) Loans The composition of the Bank's loan portfolio is summarized as follows:
_______________________________________________________________________________________ (In thousands June 30, 1995 December 31, 1994 _______________________________________________________________________________________ Mortgage loans: Residential $204,490 $211,930 Commercial 7,391 8,155 Construction 866 603 ________ ________ 212,747 220,688 Add: Premium on loans 420 452 Less: deferred mortgage loan origination fees (829) (871) _________ ________ Total mortgage loans 212,338 220,269 Other loans: Consumer Installment 1,961 1,972 Guaranteed education 10,504 10,152 Other secured 1,994 2,598 Home equity lines of credit 14,080 14,674 Unsecured 279 269 ________ ________ Total consumer loans 28,818 29,665 Commercial 826 882 ________ ________ Total other loans 29,644 30,547 _________ ________ Total loans $241,982 $250,816
(8) Commitments At June 30, 1995, the Company had outstanding commitments to originate mortgage loans and to advance funds for construction loans amounting to $3,280,000 and commitments under existing home equity lines of credit and other loans of approximately $20,181,000 which are not reflected on the consolidated balance sheet. In addition, as of June 30, 1995, the Company had a performance standby letter of credit conveyed to others in the amount of $1,249,000 which is also not reflected on the consolidated balance sheet. (9) Employee Stock Ownership Plan Effective May 28, 1986, the Company established an employee stock ownership plan ("ESOP"). Under the plan, the ESOP has borrowed funds from a third party bank to invest in the Company's common stock. As this obligation will be liquidated primarily through future contributions to the ESOP by the Company, the obligation is reflected as a liability of the Company and a reduction of shareholders' equity on the consolidated balance sheet. As of June 30, 1995 and December 31, 1994, such outstanding liabilities totaled $1,249,000. 12 (10) Changes in Accounting Principle Employee Stock Ownership Plans ("ESOPs") Effective January 1, 1994, the Company adopted the American Institute of Certified Public Accounts ("AICPA") Statement of Position ("SOP") 93-6, "Employers' Accounting for Employee Stock Ownership Plans". This SOP replaces existing accounting guidance and brings about changes in the way employees report transactions with leveraged ESOPs. Adoption of the Statement did not have a significant effect on MASSBANK's financial statements. Impaired Loans Effective January 1, 1995, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 114, "Accounting by Creditors for Impairment of a Loan", and SFAS No. 118 "Accounting by Creditors for Impairment of a Loan - Income Recognition and Disclosures". These statements require changes in both the disclosure and impairment measurement of non-performing loans. Certain loans which had previously been reported as non-performing and insubstance fore- closures are currently required to be disclosed as impaired loans. Additionally, certain loans are exempt from the provisions of these statements including large groups of smaller balance homogeneous loans that are collectively evaluated for impairment, such as consumer and residential mortgage loans. Commercial and commercial real estate loans are considered to be impaired when it is probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan agreement. The amount of impairment for all impaired loans is determined by the difference between the present value of the expected cash flows related to the loan using the original contractual interest rate, and its recorded value, or, as a practical expedient at the loans observable market price or the fair value of the collateral if the loan is collateral dependent. Loans are placed on non-accrual when payment of principal or interest is past due 90 days or more. Previously accrued income that has not been collec- ted is reversed from current income, and subsequent cash receipts are applied to reduce the unpaid principal balance. Loans are returned to accrual status when collection of all contractual principal and interest is reasonably assured and there has been sustained repayment performance. Adoption of Statements 114 and 118 did not have a significant effect on the Company's financial statements. The Company did not have any impaired loans at June 30, 1995. The average balance of impaired loans for the quarter ended June 30, 1995 was not significantly different than the ending balance. There was no interest income recognized on impaired loans during the recent quarter. Activity in the allowance for loan losses account during the six months ended June 30, 1995 was: (in thousands) Balance, December 31, 1994 $ 2,566 Provision 110 Loan losses charged off (150) Less recoveries 42 ________ Net charge-offs (108) ________ Balance, June 30, 1995 $ 2,568 (11) Deposit Acquisition Premium The deposit acquisition premium arising from acquisitions is reported net of accumulated amortization. Such premium is being amortized on a straight line basis over 10 years. 13 MASSBANK CORP. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS June 30, 1995 General The following discussion should be read in conjunction with the consolidated financial statements and related notes included in this report. MASSBANK Corp.'s (the "Company's") financial condition and results of operations essentially reflect the operations of its subsidiary, MASSBANK for Savings (the "Bank"). The Company's net income depends largely upon net interest income, which is the difference between interest income from loans and investments ("interest-earning assets") and interest expense on deposits and borrowed funds ("interest-bearing liabilities"). Net interest income is significantly affected by general economic conditions, policies established by regulatory authorities and competition. The Company has consistently maintained positive net interest income. Net income is also affected by the provision for possible loan losses and by the level of non-interest income (including gains or losses on securities), non-interest expenses and income taxes. Each of these major elements of consolidated net income is discussed in succeeding paragraphs. FINANCIAL CONDITION Total assets of the Company decreased by approximately $2.8 million from $843.6 million at December 31, 1994 to $840.8 million at June 30, 1995. The decrease in total assets is primarily attributable to a decrease in total deposits partially offset by an increase in other liabilities and total stockholders' equity. The Bank's total deposits, escrow deposits of borrowers and other liabilities combined declined by $11.2 million during the first half of 1995. This decrease was partially offset by an increase of $8.4 million in total stockholders' equity. Stockholders' equity at June 30, 1995 equalled $82.9 million compared to $74.5 million at December 31, 1994. The increase is primarily due to an increase in retained earnings of $3.3 million during the six months ended June 30, 1995 combined with a $6.4 million after tax improvement in the securities available for sale valuation reserve. For the three months ended June 30, 1995, average earning assets equalled $819.6 million, a decrease of $12.6 million, from $832.2 million for the same period in 1994. Average interest bearing liabilities totaled $752.2 million for the first quarter of 1995 compared to $769.7 million for the same quarter of 1994. Loans The Bank's loan portfolio has decreased during the first half of 1995 from $250.8 million at December 31, 1994 to $242.0 million at June 30, 1995. loan originations during this period have not kept pace with the level of loan amortization and payoffs in the Bank's portfolio. Loan originations in the first half of 1995 declined to $9.4 million, compared to $33.1 million for the same period in 1994, due primarily to the lack of loan demand in the Bank's market area. 14 Investments MASSBANK's investment portfolio, consisting of federal funds sold, term federal funds sold, investment and mortgage-backed securities, securities available for sale, trading securities and other short-term investments remained fairly stable during the first half of 1995 increasing slightly to $578.2 million or 68.8% of total assets at June 30, 1995, from $568.6 million or 67.4% of total assets at December 31, 1994. However, the market value of the Bank's securities portfolio increased by $21.9 million from December 31, 1994 to June 30, 1995 resulting in net unrealized gains of $5.6 million in the securities portfolio as of June 30, 1995 due to a continuing rally in the bond market during this period. Deposits Deposit accounts of all types have historically been the primary source of funds for the Bank's lending and investment activities. The Bank's deposit flows are influenced by prevailing interest rates, competition, and other market conditions. Management attempts to manage its deposits through selective pricing. MASSBANK's total deposits decreased $12.0 million in the first half of 1995, from $759.7 million at December 31, 1994 to $747.7 million at June 30, 1995. Attractive returns on U.S. Treasuries and other alternative investment opportunities have lured away some of the Bank's depositors. ASSET QUALITY Net loans represented 28.5% of total assets at June 30, 1995 as compared to 29.4% of total assets at December 31, 1994. The Bank's securities and other short-term investments, representing 68.8% of total assets at June 30, 1995, consist primarily of U.S. Treasuries, Government Agency obligations, high quality mortgage-backed securities, federal funds sold and investments in mutual funds of approximately $5.7 million. At June 30, 1995, the Bank's loan portfolio consisted of residential mortgages of $205.0 million, commercial mortgages of $7.4 million, consumer loans of $28.8 million and commercial loans of approximately $0.8 million. Non-performing assets were $1.9 million at June 30, 1995, representing 0.23% of total assets. This compares to $2.2 million, or 0.26% of total assets, at December 31, 1994. At June 30, 1995, the Bank's allowance for possible loan losses was approximately $2.6 million, representing 169.0% of non-performing loans and 1.06% of total loans. The Bank believes that its allowance for possible loan losses is adequate to cover the risks inherent in the loan portfolio under current conditions. Results of Operations for the Three Months Ended June 30, 1995 Compared to the Corresponding Period in 1994 General MASSBANK Corp. reported record net income of $2,169,000 or $0.78 per share for the second quarter of 1995, compared with net income of $2,094,000 or $0.73 per share earned in the same quarter of 1994. All share information set forth in this report has been adjusted to reflect the 3-for-2 split of the Company's common stock, effective September 9, 1994. The Company's favorable earnings results for the second quarter of 1995 compared to the same quarter of 1994 can be attributed primarily to an improvement in net interest margin, coupled with a lower provision for possible loan losses. The earnings results for the recent quarter also reflect a decrease in non-interest income which is partially offset by a decrease in non-interest expense. 15 Net Interest Income Net interest income before provision for possible loan losses totaled $6,540,000 in the second quarter of 1995 compared to $6,242,000 in the comparable quarter of 1994. As detailed in the average balance sheets on the following pages, this is the result of an improvement in the Company's net interest margin and interest rate spread. The interest rate spread was 2.85% for the second quarter of 1995 compared to 2.75% for the same quarter in 1994. The net interest margin for the three months ended June 30, 1995 and 1994 was 3.21% and 3.02%, respectively. Interest and Dividend Income Interest and dividend income increased by $1,593,000 or 12.6% to $14,220,000 for the three months ended June 30, 1995 from $12,627,000 for the same period in 1994. The increase in interest and dividend income is primarily attributable to an increase in yield on earning assets partially offset by a decrease in the Company's average earning assets. The Company's average yield on total earning assets for the second quarter of 1995 increased 87 basis points to 6.95% from 6.08% for the same period in 1994. This improvement is due primarily to rising interest rates. The average total earning assets of the Company decreased to $819.6 million in the second quarter of 1995 from $832.2 million for the corresponding quarter of 1994. Interest Expense Total interest expense increased 20.3% to $7,680,000 for the three months ended June 30, 1995 from $6,385,000 for the same period in 1994. The increase in interest expense was primarily due to an increase in the Company's cost of funds, partially offset by a decrease of $17.6 million in the Company's average deposits and borrowed funds. During the second quarter of 1995, the Company's average cost of funds increased 77 basis points to 4.10% from 3.33% in the second quarter of 1994. This increase was primarily due to the rise in market interest rates over the last twelve months, which increased rates on customer deposits, and a shift in mix of deposits as customers have migrated to higher yielding time deposits. Average deposits and borrowed funds for the three months ended June 30, 1995 were $752.1 million compared to $769.7 million for the same period in 1994. 16 AVERAGE BALANCE SHEETS Three Months Ended
June 30, 1995 June 30, 1994 ______________ ______________ (1) Interest Average (1) Interest Average Average Income/ Yield/ Average Income/ Yield/ (In thousands) Balance Expense Rate Balance Expense Rate __________________________________________________________________________________________ Assets: Earning assets: Federal funds sold $ 89,821 $ 1,373 6.13% $ 27,166 $ 266 3.93% Mortgage-backed securities 174,037 3,137 7.21 156,945 2,768 7.06 Securities available for sale 256,560 4,034 6.29 236,778 3,201 5.41 Trading securities 51,160 760 5.94 157,354 1,524 3.87 Other investments 3,361 50 5.95 972 12 4.86 Mortgage loans (2) 214,393 4,146 7.74 223,626 4,291 7.67 Other loans (2) 30,285 752 9.94 29,420 596 8.13 __________________________________________________ ________________ Total earning assets 819,617 $14,252 6.95% 832,261 $12,659 6.08% __________________________________________________________________________________________ Allowance for possible loan losses (2,597) (2,170) __________________________________________________________________________________________ Total earning assets less allowance for possible loan losses 817,020 830,091 Other assets 20,982 23,338 __________________________________________________________________________________________ Total assets $838,002 $853,429 __________________________________________________________________________________________ 17
AVERAGE BALANCE SHEETS (continued) Three Months Ended
June 30, 1995 June 30, 1994 ______________ ______________ (1) Interest Average (1) Interest Average Average Income/ Yield/ Average Income/ Yield/ (In thousands) Balance Expense Rate Balance Expense Rate __________________________________________________________________________________________ Liabilities: Deposits: Demand and NOW $ 64,657 $ 163 1.01% $ 66,129 $ 170 1.03% Savings 388,408 3,207 3.31 535,588 4,407 3.30 Time certificates of deposit 299,101 4,310 5.78 167,579 1,807 4.32 __________________________________________________ ________________ Total deposits 752,166 7,680 4.10 769,296 6,384 3.33 Borrowed funds -- -- -- 437 1 0.46 __________________________________________________ ________________ Total deposits and borrowed funds 752,166 7,680 4.10% 769,733 6,385 3.33% Other liabilities 4,763 8,328 __________________________________________________________________________________________ Total liabilities 756,929 778,061 __________________________________________________________________________________________ Stockholders' equity 81,073 75,368 __________________________________________________________________________________________ Total liabilities and stockholders' equity $838,002 $853,429 __________________________________________________________________________________________ Net interest income (tax-equivalent basis) 6,572 6,274 Less adjustment of tax-exempt interest income 32 32 __________________________________________________________________________________________ Net interest income $6,540 $6,242 __________________________________________________________________________________________ Interest rate spread 2.85% 2.75% __________________________________________________________________________________________ Net interest margin (3) 3.21% 3.02% __________________________________________________________________________________________ (1) Includes SFAS No. 115 adjustment. (2) Loans on non-accrual status are included in the average balance. (3) Annualized net interest income (tax equivalent basis) before provision for possible loan losses divided by average interest-earning assets. 18
Provision for Possible Loan Losses Possible losses on loans are provided for under the allowance method of accounting. The allowance is increased by provisions charged to operations based on management's assessment of many factors including the risk characteristics of the portfolio, underlying collateral, current and anticipated economic conditions that may affect the borrowers ability to pay, and trends in loan delinquencies and charge-offs. Realized losses, net of recoveries, are charged directly to the allowance. While management uses the information available in establishing the allowance for losses, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluation. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank's allowance for possible loan losses. Such agencies may require the Bank to recognize additions to the allowance based on judgments different from those of management. As a result of management's assessment and analysis, the Bank provided $40,000 for potential loan losses during the second quarter of 1995 compared to $250,000 for the same quarter in 1994. Loan charge-offs net of recoveries, were $69,000 and $232,000 for the respective periods. Non-performing assets decreased to $1,950,000 as of June 30, 1995 from $2,227,000 as of December 31, 1994. At June 30, 1995 the balance of the allowance for possible loan losses was $2,568,000 compared to $2,566,000 at the end of 1994. The reserve for loan losses remains strong at 169.0% of total non-performing loans. Non-Performing Assets June 30, December 31, June 30, (In thousands) 1995 1994 1994 ______________________________________________________________________________ Non-Performing Assets: Non-accrual loans $ 1,520 $ 2,098 $ 1,794 Real estate acquired through foreclosure or substantively repossessed 430 129 273 ______________________________________________________________________________ Total non-performing assets $ 1,950 $ 2,227 $ 2,067 ______________________________________________________________________________ Allowance for possible loan losses $ 2,568 $ 2,566 $ 2,353 Allowance as percent of non-accrual loans 169.0% 122.3% 131.2% Non-accrual loans as percent of total loans 0.63% 0.84% 0.70% Non-performing assets as percent of total assets 0.23% 0.26% 0.24% The Company adopted Statement of Financial Accounting Standards (SFAS) No. 114, "Accounting by Creditors for Impairment of a Loan", and SFAS No. 118 "Accounting by Creditors for Impairment of a Loan - Income Recognition and Disclosures" effective January 1, 1995. However, the Bank did not have any impaired loans as of June 30, 1995. 19 Non-Interest Income Non-interest income consists of deposit account service fees, gains or losses on securities and other non-interest income. Non-interest income for the quarter was $609,000, down from $1,163,000 a year ago due primarily to extraordinary items (i.e. interest on tax settlements of $1,188,000 and securities losses of $570,000 recorded in the second quarter of 1994. Non-Interest Expense Non-interest expenses for the three months ended June 30, 1995 decreased to $3,557,000 from $3,837,000 for the corresponding period in 1994. The reduction was primarily due to a $282,000 write-down in loan valuation premium in 1994 Income Tax Expense The Company and its subsidiaries file consolidated federal income tax returns on an October 31, year-end. The Parent Company is subject to a State of Delaware Franchise Tax and a State of Massachusetts Bank Excise Tax and the Bank's subsidiaries are subject to a State of Massachusetts Corporate Excise Tax. Provisions for deferred income taxes are made as a result of timing differences between financial and income tax methods of accounting. The provision for federal and state income taxes increased to $2,169,000 for the three months ended June 30, 1995 from $2,094,000 for the same period in 1994. The increase is due to higher income before taxes and an increase in the Company's combined effective income tax rate from 36.9% for the second quarter of 1994 to 38.9% for the second quarter of 1995. The Company's estimated effective income tax rate for 1994 was reduced due to the resolution of a federal income tax matter. Results of Operations for the Six Months Ended June 30, 1995 Compared to the Corresponding Period in 1994 General For the first half of 1995, the Company reported net income of $4,295,000 or $1.54 per share, up 10.7% from the $3,879,000 or $1.34 per share earned in the first six months of 1994. The Company's favorable earnings results for the six months ended June 30, 1995 compared to the same period in 1994 can be attributed primarily to an improvement in net interest margin, coupled with a lower provision for possible loan losses. The earnings results for 1995 also reflect a decrease in non-interest income which is partially offset by a decrease in non-interest expense. Net Interest Income Net interest income before provision for possible loan losses totaled $13,200,000 in the first half of 1995 compared to $12,241,000 in the same period of 1994. As detailed in the average balance sheets on the following pages, this is the result of an improvement in the Company's net interest margin and interest rate spread. The interest rate spread was 2.90% for the six months ended June 30, 1995 compared to 2.67% for the same period a year ago. The net interest margin for the six months ended June 30, 1995 and 1994 was 3.24% and 2.95%, respectively. Interest and Dividend Income Interest and dividend income increased by $3,253,000 or 13.1% to $28,068,000 for the six months ended June 30, 1995 from $24,815,000 for the same period in 1994. 20 The increase in interest and dividend income is primarily attributable to an increase in yield on earning assets partially offset by a decrease in the Company's average earning assets. The Company's average yield on total earning assets for the first half of 1995 increased 91 basis points to 6.88% from 5.97% for the same period in 1994. This improvement is due primarily to rising interest rates. The average total earning assets of the Company decreased to $818.2 million in the first half of 1995 from $833.8 million for the corresponding period of 1994. Interest Expense Total interest expense increased 18.2% to $14,868,000 for the six months ended June 30, 1995 from $12,574,000 for the same period in 1994. The increase in interest expense was primarily due to an increase in the Company's cost of funds, partially offset by a decrease of $14.6 million in the Company's average deposits and borrowed funds. During the first half of 1995, the Company's average cost of funds increased 68 basis points to 3.98% from 3.30% in the first half of 1994. This increase was primarily due to the rise in market interest rates over the last twelve months, which increased rates on customer deposits, and a shift in mix of deposits as customers have migrated to higher yeilding time deposits. Average deposits and borrowed funds for the six months ended June 30, 1995 were $753.7 million compared to $768.3 million for the same period in 1994. AVERAGE BALANCE SHEETS Six Months Ended
June 30, 1995 June 30, 1994 ______________ ______________ (1) Interest Average (1) Interest Average Average Income/ Yield/ Average Income/ Yield/ (In thousands) Balance Expense Rate Balance Expense Rate __________________________________________________________________________________________ Assets: Earning assets: Federal funds sold $ 71,779 $ 2,148 6.03% $ 42,765 $ 724 3.41% Mortgage-backed securities 173,116 6,225 7.19 137,175 4,899 7.15 Securities available for sale 258,773 8,066 6.23 247,476 6,627 5.36 Trading securities 65,860 1,850 5.62 153,348 2,849 3.73 Other investments 1,957 60 6.13 1,756 37 4.15 Mortgage loans (2) 216,279 8,364 7.73 221,635 8,569 7.73 Other loans (2) 30,465 1,420 9.36 29,675 1,177 8.00 __________________________________________________ ________________ Total earning assets 818,229 $28,133 6.88% 833,830 $24,882 5.97% __________________________________________________________________________________________ Allowance for possible loan losses (2,586) (2,233) __________________________________________________________________________________________ Total earning assets less allowance for possible loan losses 815,643 831,597 Other assets 21,921 22,168 __________________________________________________________________________________________ Total assets $837,564 $853,765 __________________________________________________________________________________________
21 AVERAGE BALANCE SHEETS (continued) Six Months Ended
June 30, 1995 June 30, 1994 ______________ ______________ (1) Interest Average (1) Interest Average Average Income/ Yield/ Average Income/ Yield/ (In thousands) Balance Expense Rate Balance Expense Rate __________________________________________________________________________________________ Liabilities: Deposits: Demand and NOW $ 64,791 $ 328 1.02% $ 65,680 $ 341 1.05% Savings 409,182 6,718 3.31 536,833 8,763 3.29 Time certificates of deposit 279,768 7,822 5.64 165,550 3,469 4.23 __________________________________________________ ________________ Total deposits 753,741 14,868 3.98 768,063 12,573 3.30 Borrowed funds -- -- -- 277 1 0.58 __________________________________________________ ________________ Total deposits and borrowed funds 753,741 14,868 3.98% 768,340 12,574 3.30% Other liabilities 4,807 7,764 __________________________________________________________________________________________ Total liabilities 758,548 776,104 __________________________________________________________________________________________ Stockholders' equity 79,016 77,661 __________________________________________________________________________________________ Total liabilities and stockholders' equity $837,564 $853,765 __________________________________________________________________________________________ Net interest income (tax-equivalent basis) 13,265 12,308 Less adjustment of tax-exempt interest income 65 67 __________________________________________________________________________________________ Net interest income $13,200 $12,241 __________________________________________________________________________________________ Interest rate spread 2.90% 2.67% __________________________________________________________________________________________ Net interest margin (3) 3.24% 2.95% __________________________________________________________________________________________ (1) Includes SFAS No. 115 adjustment. (2) Loans on non-accrual status are included in the average balance. (3) Annualized net interest income (tax equivalent basis) before provision for possible loan losses divided by average interest-earning assets.
22 Provision for Possible Loan Losses The provision for loan losses charged against income was $110,000 for the six months ended June 30, 1995 compared to $370,000 for the same period in 1994. Loan charge-offs net of recoveries totaled $108,000 for the first half of 1995. The allowance for possible loan losses at June 30, 1995 stands at $2,568,000, which equals 169.0% of non-performing loans and 1.06% of total loans. Non-Interest Income Non-interest income consists of deposit account service fees, gains or losses on securities and other non-interest income. Non-interest income for the six months ended June 30, 1995 was $1,037,000, down from $1,658,000 a year ago due primarily to extraordinary items (i.e. interest on tax settlements of $1,188,000 and securities losses of $545,000 recorded in the first half of 1994). Non-Interest Expense Non-interest expenses for the six months ended June 30, 1995 decreased to $7,078,000 from $7,403,000 for the corresponding period in 1994. The reduction was primarily due to a $282,000 write-down in loan valuation premium in 1994. Income Tax Expense Total income tax expense for the first half of 1995 was $4,295,000 compared to $3,879,000 for the same period in 1994. The increase is due to higher income before taxes coupled with an increase in the Company's combined effective income tax rate from 36.7% for the six months ended June 30, 1994 to 39.1% for the same period in 1995. The Company's estimated effective income tax rate for 1994 was reduced due to the resolution of a federal income tax matter. In addition, the Bank's use of subsidiaries with securities corporation status for state income tax purposes has also helped to reduce the estimated effective income tax rate for 1994 and 1995. Liquidity and Capital Resources The Bank must maintain a sufficient amount of cash and assets which can readily be converted into cash in order to meet cash outflow from normal depositor requirements and loan demands. The Bank's primary sources of funds are deposits, loan amortization and prepayments, sale or maturities of investment securities and income on earning assets. In addition to loan payments and maturing investment securities, which are relatively predictable sources of funds, the Bank maintains a high percentage of its assets invested in overnight federal funds sold, which can be immediately converted into cash and United States Treasury and Government agency securities, which can be sold or pledged to raise funds. At June 30, 1995 the Bank had $75.9 million or 9.0% of total assets and $271.6 million or 32.3% of total assets invested respectively in overnight federal funds sold and United States Treasury and Government agency obligations. 23 The Bank is an FDIC insured institution subject to the FDIC regulatory capital requirements. The FDIC regulations require all FDIC insured institutions to maintain minimum levels of Tier 1 capital. Highly rated banks (i.e., those with a composite rating of 1 under the CAMEL rating system) are required to maintain Tier 1 capital of at least 3% of their total assets. All other banks are required to have Tier 1 capital of 4% to 5%. The FDIC has authority to impose higher requirements for individual banks. The Bank is also required to maintain a minimum level of risk-based capital. Under the new risk-based capital standards, FDIC insured institutions generally are expected to meet a minimum total qualifying capital to risk-weighted assets ratio of 8.00% as of December 31, 1992. At June 30, 1995, the Bank had ratios of Tier 1 capital to total assets of 9.39% and qualifying capital to risk- weighted assets of 38.85%. The Company had ratios of Tier 1 capital to total assets of 9.43% and total qualifying capital to risk-weighted assets of 39.00% at June 30, 1995. Impact of Inflation and Changing Prices MASSBANK Corp.'s financial statements presented herein have been prepared in accordance with generally accepted accounting principles which require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative purchasing power of money over time, due to the fact that substantially all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates have a more significant impact on a financial institutions performance than the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or in the same magnitude as the prices of goods and services. 24 PART II - OTHER INFORMATION Item 1. Legal Proceedings From time to time, MASSBANK Corp. and/or the Bank are involved as a plaintiff or defendant in various legal actions incident to their business. As of June 30, 1995, none of these actions individually or in the aggregate is believed by management to be material to the financial condition of MASSBANK Corp. or the Bank. Item 2. Changes in Securities Not Applicable. Item 3. Defaults Upon Senior Securities Not Applicable. Item 4. Submission of Matters to a Vote of Security Holders At the Annual Meeting of Stockholders of MASSBANK Corp. on April 18, 1994, stockholders voted affirmatively on the following proposal: To elect each Class III Director to serve until the 1998 Annual Meeting of Stockholders and until their successors are chosen and qualified. Elected at Meeting __________________ Samuel Altschuler Gerard H. Brandi Peter W. Carr Robert E. Dyson Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K a. Exhibits Exhibit No. 1: Statement regarding computation of per share earnings. b. Reports on Form 8-K None. 25 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. MASSBANK Corp. & Subsidiaries _____________________________ (Registrant) Date August 11, 1995 /s/Gerard H. Brandi ___________________________ (Signature) Gerard H. Brandi President and CEO Date August 11, 1995 /s/Reginald E. Cormier ___________________________ (Signature) Reginald E. Cormier V.P., Treasurer and CFO 26 EX-1 2 EXHIBIT 1 MASSBANK CORP. Earnings Per Share The following is a calculation of earnings per share for the three months and six months ended June 30, 1995 and 1994.
Three Months Ended Six Months Ended Calculation of Primary June 30, June 30, Earnings Per Share 1995 1994* 1995 1994* ______________________________ ____ ____ ____ ____ Average common shares outstanding 2,767,811 2,836,282 2,776,176 2,879,568 Less: Unallocated Employee Stock Ownership Plan (ESOP) shares not committed to be released (52,800) (62,979) (52,800) (62,979) Shares assumed to be repurchased under treasury stock method of stock options 74,229 82,469 69,828 83,775 _______ _______ _______ _______ Total Shares 2,789,240 2,855,772 2,793,204 2,900,364 __________ __________ _________ _________ Net Income $2,169,000 $2,094,000 $4,295,000 $3,879,000 __________ __________ __________ __________ Per Share Amount $ 0.78 $ 0.73 $ 1.54 $ 1.34 __________ __________ __________ __________
Three Months Ended Six Months Ended Calculation of Fully Diluted June 30, June 30, Earnings Per Share 1995 1994* 1995 1994* ______________________________ ____ ____ ____ ____ Average common shares outstanding 2,767,811 2,836,282 2,776,176 2,879,568 Less: Unallocated Employee Stock Ownership Plan (ESOP) shares not committed to be released (52,800) (62,979) (52,800) (62,979) Shares assumed to be repurchased under treasury stock method of stock options 78,660 94,325 72,376 90,062 ________ _______ _______ _______ Total Shares 2,793,671 2,867,628 2,795,752 2,906,651 _________ _________ _________ _________ Net Income $2,169,000 $2,094,000 $4,295,000 $3,879,000 __________ __________ __________ __________ Per Share Amount $ 0.78 $ 0.73 $ 1.54 $ 1.34 * Prior year total shares outstanding and earnings per share amounts have been restated to reflect the three-for-two stock split of September, 1994 to permit comparison with the current fiscal year.
EX-27 3
9 0000799166 MASSBANK CORP. 1,000 6-MOS DEC-31-1995 JAN-01-1995 JUN-30-1995 10,517 900 100,937 36,312 246,553 185,468 186,727 241,982 (2,568) 840,823 747,685 1,050 7,933 1,249 5,373 0 0 77,533 840,823 9,784 16,081 2,203 28,068 14,868 14,868 13,200 110 39 7,078 7,049 7,049 0 0 4,295 1.54 1.54 3.24 1,520 0 0 1,520 2,566 (150) 42 2,568 101 0 2,467