-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vg1kcsZu2StOhzCka0b6UrdkfeohEoHp3SUUnf5XM6LA8FllO7KaAq3XjYtWR5g4 Cy3QjCFmSOuYMs9njRCwTQ== 0000810830-97-000009.txt : 19971110 0000810830-97-000009.hdr.sgml : 19971110 ACCESSION NUMBER: 0000810830-97-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971107 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMPIRE BANC CORP CENTRAL INDEX KEY: 0000810830 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 382727982 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-15839 FILM NUMBER: 97710285 BUSINESS ADDRESS: STREET 1: 1227 FRONT STREET CITY: TRAVERSE CITY STATE: MI ZIP: 49686 BUSINESS PHONE: 6169225864 MAIL ADDRESS: STREET 1: 1227 E FRONT ST CITY: TRAVERSE STATE: MI ZIP: 49684 10-Q 1 QUARTERLY REPORT FOR QUARTER ENDING 09/30/97 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------------------- FORM 10-Q Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1997. Commission file number 0-15839 EMPIRE BANC CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Michigan -------------------------------------------------------------- (State or other jurisdiction of incorporation or organization) 1227 E. Front Street Traverse City, Michigan ---------------------------------------- (Address of principal executive offices) 38-2727982 ------------------------------------ (IRS Employer Identification Number) 49686-2928 ---------- (Zip code) (616) 922-2111 ---------------------------------------------------- (Registrant's telephone number, including area code) Not applicable -------------------------------------------------------------------- (Former name, address and fiscal year, if changed since last report) 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, and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares outstanding of each of the issuer's classes of common stock was 1,757,584 shares of common stock, par value $5, outstanding as of September 30, 1997. 2 Empire Banc Corporation - Consolidated Balance Sheet
(In thousands, except share data) September 30 December 31 September 30 1997 1996 1996 Assets Cash and due from banks $ 18,126 $ 22,603 $ 16,403 Federal funds sold 6,700 -- -- -------- -------- -------- Cash and cash equivalents 24,826 22,603 16,403 Securities Available for sale, at fair value 38,762 34,572 34,466 Held to maturity 31,544 36,804 38,212 (fair value: 9/30/97-$31,783, 12/31/96-$37,038, 9/30/96-$38,340) Mortgage-backed securities Available for sale, at fair value 26,128 27,202 27,518 Loans 297,409 272,182 268,031 Less: allowance for loan losses (3,800) (3,525) (3,692) -------- -------- -------- Net loans 293,609 268,657 264,339 Premises and equipment, net 4,484 3,985 3,919 Other real estate -- -- 5 Accrued income and other assets 6,910 6,996 6,982 -------- -------- -------- Total assets $426,263 $400,819 $391,844 ======== ======== ======== Liabilities Deposits Non-interest-bearing $ 56,488 $ 54,556 $ 49,778 Interest-bearing 315,268 289,798 286,762 -------- -------- -------- Total deposits 371,756 344,354 336,540 Federal funds purchased -- 5,500 -- Federal Home Loan Bank advances 12,000 12,000 17,000 Accrued expense and other liabilities 7,416 6,292 6,607 -------- -------- -------- Total liabilities 391,172 368,146 360,147 Shareholders' equity Preferred stock-$1 par value, 2,000,000 shares authorized, none outstanding Common stock-$5 par value, 5,000,000 shares authorized, shares outstanding: 9/30/97-1,757,584; 12/31/96- 1,746,009; 9/30/96-1,740,683 8,788 8,730 8,703 Paid-in-capital 12,608 12,350 12,210 Retained earnings 13,371 11,419 10,781 Net unrealized gain on securities, net of tax 324 174 3 -------- -------- -------- Total shareholders' equity 35,091 32,673 31,697 -------- -------- -------- Total liabilities and shareholders' equity $426,263 $400,819 $391,844 ======== ======== ======== See notes to consolidated financial statements.
3 Empire Banc Corporation - Consolidated Statement of Income
(In thousands, except share data) Quarter Ending Year to Date September 30 September 30 1997 1996 1997 1996 Interest income Loans, including fees $ 6,950 $ 6,140 $ 19,887 $ 18,302 Taxable securities Available for sale 1,021 957 2,936 2,572 Held to maturity 432 466 1,330 1,350 Tax-exempt securities-held to maturity 60 66 182 177 Federal funds sold 106 161 174 351 ------- ------- ------- ------ Total interest income 8,569 7,790 24,509 22,752 Interest expense Deposits 3,685 3,332 10,575 9,693 Federal funds purchased 1 -- 37 20 Federal Home Loan Bank advances 176 252 543 743 ------- ------- -------- ------- Total interest expense 3,862 3,584 11,155 10,456 ------- ------- -------- ------- Net interest income 4,707 4,206 13,354 12,296 Provision for loan losses 188 416 981 877 ------- ------- -------- ------- Net interest income after provision for loan losses 4,519 3,790 12,373 11,419 Non-interest income Mortgage sales and servicing 456 408 1,178 1,061 Service charges on deposit accounts 380 326 1,056 953 Trust income 672 515 1,964 1,555 Other service charges and fees 228 155 497 393 Other income 91 95 264 288 Security gains(losses) -- -- (6) -- ------- ------- -------- ------ Total non-interest income 1,827 1,499 4,953 4,250 Non-interest expense Salaries and employee benefits 2,805 2,116 7,199 6,426 Occupancy 283 258 798 777 Furniture and equipment 225 188 659 612 Other 996 963 2,995 2,883 ------- ------- ------- ------ Total non-interest expense 4,309 3,525 11,651 10,698 ------- ------- ------- ------ Income before federal income taxes 2,037 1,764 5,675 4,971 Federal income taxes 676 583 1,881 1,643 ------- ------- ------- ------ Net income $ 1,361 $ 1,181 $ 3,794 $ 3,328 ======= ======= ======= ======= - ---------------------------------------------------------------------------------------- Earnings per share $ .72 $ .63 $ 2.00 $ 1.78 Average shares outstanding 1,895,816 1,876,514 1,894,771 1,873,692 - ---------------------------------------------------------------------------------------- See notes to consolidated financial statements.
4 Empire Banc Corporation - Consolidated Statement of Cash Flows
(In thousands) Year to Date September 30 1997 1996 Operating activities Net income $ 3,794 $ 3,328 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 527 537 Provision for loan losses 981 877 Mortgage loans originated for sale (40,647) (47,712) Sale of mortgage loans 37,842 46,277 Net realized loss on securities 6 -- Net amortization/accretion on securities 91 285 Increase in deferred income taxes 281 34 Increase (decrease) in accrued interest receivable 70 (87) Increase in accrued expense and other liabilities 1,120 736 Decrease in other assets (342) (43) ------- ------- Total adjustments (71) 904 ------- ------- Net cash from operating activities 3,723 4,232 Investing activities Securities available for sale Proceeds from sales 992 -- Proceeds from maturities 11,220 15,672 Purchases (15,146) (30,507) Securities held to maturity Proceeds from sales 1,986 -- Proceeds from maturities 7,261 12,073 Purchases (4,039) (13,908) Loans granted net of repayments (23,128) (7,879) Premises and equipment expenditures (1,065) (833) Proceeds from disposal of assets 39 -- ------- ------- Net cash from investing activities (21,880) (25,382) Financing activities Net increase in deposits 27,402 17,000 Net decrease in federal funds purchased (5,500) -- Cash dividends paid (1,838) (1,489) Issuance of common stock 316 184 ------- ------- Net cash from financing activities 20,380 15,695 ------- ------- Net change in cash and cash equivalents 2,223 (5,455) Cash and cash equivalents at January 1 22,603 21,858 ------- ------- Cash and cash equivalents at September 30 $24,826 $16,403 ======= ======= - ------------------------------------------------------------------------------------------ Interest paid $ 11,049 $10,395 Income taxes paid 1,834 1,825 - ------------------------------------------------------------------------------------------ See notes to consolidated financial statements.
5 Empire Banc Corporation - Consolidated Statement of Changes in Shareholders' Equity
(In thousands) 1997 1996 - ------------------------------------------------------------------------------------------- Balance January 1 $32,673 $30,005 Net income 3,794 3,328 Common stock issued 316 184 Dividends declared (1,842) (1,489) Net change in security valuation 150 (331) ------- ------- Balance September 30 $35,091 $31,697 ======= =======
Notes to Consolidated Financial Statements Note-1 The consolidated financial statements include the accounts of Empire Banc Corporation and its wholly-owned subsidiary, Empire National Bank, after elimination of significant inter-company transactions and accounts. The statements have been prepared by management without audit by independent certified public accountants. However, these statements reflect all adjustments (consisting of normal recurring accruals) and disclosures which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented and should be read in conjunction with the notes to financial statements included in the Empire Banc Corporation's Form 10-K for the year ended December 31, 1996. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Because the results of operations are so closely related to and responsive to changes in economic conditions, the results for any interim period are not necessarily indicative of the results that can be expected for the entire year. Note-2 Earnings per share of common stock is computed by dividing net income by the weighted average number of common stock and common stock equivalents outstanding during the period. Common stock equivalents consist of common stock issuable under the assumed exercise of stock options granted under the Corporation's stock option plan, using the treasury stock method. In October 1997 the Board of Directors of the Corporation declared a ten percent stock dividend to be paid in November 1997. Earnings per share data after restatement for the declared dividend for the year to date periods ending September 30, 1997 and 1996, would be $1.82 and $1.61. Restatement of per share amounts for the quarterly periods ending September 30, 1997 and 1996 would be $.65 and $.57. 6 Empire Banc Corporation Financial Review Third Quarter 1997 Compared with Third Quarter 1996 Summary Empire Banc Corporation's 1997 third quarter earnings were $1,361,000, a 15% increase over 1996 third quarter results. Earnings per share increased from $.63 per share in 1996 to $.72 in 1997. The return on assets was 1.29% for the quarter versus 1.21% in 1996. The return on equity was 15.75% compared to 15.15% in the prior year quarter. The current quarter's results reflect the impact of an increase of 12% in net interest income, attributable to a 7% growth in average earning assets. Total loans and deposits have increased approximately 11% to $297 million and $372 million during the last twelve months. Non-interest income increased 22% in the quarter-to-quarter comparison, with substantial growth in trust fees, loan fee income and deposit related fees. In addition, income from service charges increased significantly during the quarter due to the assessment of fees for ATM usage to non-bank customers. Non-interest expense increased 22%, primarily due to increased personnel costs and computer-related depreciation expense. The provision for loan losses for the third quarter of 1997 decreased $228,000 from the prior year quarter as a significant portion of the net charge-offs for the quarter were due to a credit previously reserved for. Total shareholders' equity increased 11% during the last twelve months to $35.1 million, improving book value per share to $19.97 from the $18.21 at September 30, 1996. 7
Net Interest Income Quarter Ending Nine Months Ending September 30 September 30 1997 1996 1997 1996 - ---------------------------------------------------------------------------------- Interest income $8,569 $7,790 $24,509 $22,752 Taxable equivalent adjustment 34 32 96 90 ------ ------ ------- ------- Interest income (TE) 8,603 7,822 24,605 22,842 Interest expense 3,862 3,584 11,155 10,456 ------ ------ ------- ------- Net interest income (TE) $4,741 $4,238 $13,450 $12,386 ====== ====== ======= ======= Increase (decrease) due to change in: Volume $ 481 $ 245 $ 1,260 $ 734 Rate 22 49 (196) 343 ------ ------ ------- ------- Total $ 503 $ 294 $ 1,064 $ 1,077 ====== ====== ======= ======= - ----------------------------------------------------------------------------------
Third quarter net interest income on a taxable equivalent ("TE") basis was $4.7 million, a 12% increase from the $4.2 million earned in the year ago quarter. Average earning assets increased 7% or $26.4 million while net interest margin, the other principal determinant of net interest income, increased from 4.58% to 4.77% in the quarter to quarter comparison. Average loans increased $31.4 million or 12%, to $291.5 million for the current quarter. The mortgage portfolio grew 17% or $11.3 million, the commercial portfolio grew 7% or $7.8 million and average consumer loans increased 17% or $12.3 million. The average rate earned on the loan portfolio increased 8 basis points ("bp") to average 9.47% in the current quarter. The security portfolio remained comparable to the prior year quarter while the rate earned increased 26 bp to average 6.47%. Average overnight funds sold decreased $4.6 million or 37% and the rate earned increased 26 bp from the prior year's third quarter. Incremental funding for the earning asset growth came mainly from the $19.2 million or 6.3% growth in interest bearing funds. Consumer certificates of deposits grew $1.7 million, money market accounts increased $22.0 million, and Federal Home Loan Bank advances decreased $5.0 million. The average rate paid on interest bearing funds was 4.75%, comparable to the 4.70% average in the third quarter of 1996. Non-interest bearing funds supporting earning assets increased 11% or $7.2 million compared to the last year's quarter. 8 Net Interest Income Average Balances, Interest Income/Expense, Average Rates
Quarter Ending September 30, 1997 1996 - ------------------------------------------------------------------------------------------ Average Average (Taxable equivalent, Balance Interest Rate Balance Interest Rate in thousands) --------------------------- ----------------------------- Assets Loans, including fees*,** $291,543 $6,956 9.47% $260,182 $6,144 9.39% Securities Taxable 90,238 1,453 6.44 90,312 1,424 6.31 Tax-exempt* 4,986 88 7.07 5,320 93 7.03 -------- ------ -------- ------ Total 95,224 1,541 6.47 95,632 1,517 6.21 Federal funds sold 7,622 106 5.43 12,181 161 5.17 -------- ------ -------- ------ Total earning assets\ interest income 394,389 8,603 8.65% 367,995 7,822 8.46% Cash and due from banks 16,038 14,393 Other assets 11,483 9,093 -------- -------- Total $421,910 $391,481 ======== ======== Liabilities and Equity CDs over $100,000 $ 11,191 153 5.34% $ 11,531 148 5.02% Savings & interest checking 64,535 368 2.26 63,769 349 2.18 Money market deposits 100,774 1,128 4.44 78,749 819 4.14 Consumer CDs 133,882 2,036 6.03 132,207 2,016 6.07 -------- ------ -------- ------ Total 310,382 3,685 4.71 286,256 3,332 4.63 Federal funds purchased 70 1 5.87 -- -- -- FHLB advances 12,000 176 5.83 17,000 252 5.90 -------- ------ -------- ------ Total interest-bearing funds/interest expense 322,452 3,862 4.75% 303,256 3,584 4.70% -------- ------ -------- ------ Demand deposits 57,936 50,638 Other liabilities 6,949 6,410 Shareholders' equity 34,573 31,177 -------- -------- Total $421,910 $391,481 ======== ======== Net interest spread (TE) 3.90% 3.76% ==== ==== Net interest income (TE) $4,741 $4,238 ====== ====== Net interest margin (TE) 4.77% 4.58% ==== ==== - ------------------------------------------------------------------------------------------ * Interest income on tax-exempt securities and certain tax-exempt loans has been adjusted to a tax-equivalent basis. ** Non-accrual loans are excluded.
9 Net Interest Income Average Balances, Interest Income/Expense, Average Rates
Year to date September 30, 1997 1996 - ------------------------------------------------------------------------------------------ Average Average (Taxable equivalent, Balance Interest Rate Balance Interest Rate in thousands) --------------------------- ----------------------------- Assets Loans, including fees*,** $283,283 $19,902 9.39% $256,694 $18,313 9.53% Securities Taxable 88,672 4,266 6.41 84,756 3,923 6.17 Tax-exempt* 4,928 263 7.13 4,659 255 7.30 -------- ------- -------- ------- Total 93,600 4,529 6.45 89,415 4,178 6.14 Federal funds sold 4,276 174 5.37 8,890 351 5.19 -------- ------- -------- ------- Total earning assets\ interest income 381,159 24,605 8.63% 354,999 22,842 8.60% Cash and due from banks 14,537 12,895 Other assets 11,219 9,202 -------- -------- Total $406,915 $377,096 ======== ======== Liabilities and Equity CDs over $100,000 $ 10,810 428 5.22% $ 11,718 473 5.31% Savings & interest checking 63,745 1,053 2.21 61,666 1,005 2.18 Money market deposits 93,438 3,037 4.35 75,647 2,345 4.14 Consumer CDs 134,279 6,057 6.03 129,203 5,870 6.07 -------- ------- -------- ------- Total 302,272 10,575 4.67 278,234 9,693 4.65 Federal funds purchased 870 37 5.65 462 20 5.77 FHLB advances 12,293 543 5.91 16,617 743 5.97 -------- ------- -------- ------- Total interest-bearing funds/interest expense 315,435 11,155 4.73% 295,313 10,456 4.73% -------- ------- -------- ------- Demand deposits 51,203 45,015 Other liabilities 6,625 6,021 Shareholders' equity 33,652 30,747 -------- -------- Total $406,915 $377,096 ======== ======== Net interest spread (TE) 3.90% 3.87% ==== ==== Net interest income (TE) $13,450 $12,386 ======= ======= Net interest margin (TE) 4.72% 4.66% ==== ==== - ------------------------------------------------------------------------------------------ * Interest income on tax-exempt securities and certain tax-exempt loans has been adjusted to a tax-equivalent basis. ** Non-accrual loans are excluded.
10
Non-Interest Income Quarter Ending Nine Months Ending September 30 September 30 Increase (decrease) Increase (decrease) Amount % Amount % - ----------------------------------------------------------------------------- (In thousands) Mortgage sales and servicing $ 48 12% $ 117 11% Service charges on deposit accounts 54 17 103 11 Trust income 157 30 409 26 Other service charges and fees 73 47 104 26 Other income (4) (4) (24) (8) Securities (losses) gains -- -- (6) -- ------ ---- ------ ---- $ 328 22% $ 703 17% ====== ==== ====== ====
Non-interest income for the third quarter totaled $1.8 million, a $328,000 or 22% increase from the third quarter of 1996. Income from trust activities continued its strong growth pattern, with a 30% increase in fee income in the quarter to quarter comparison. In addition, fees collected for providing other services to customers increased $73,000 or 47%.
Non-Interest Expense Quarter Ending Nine Months Ending September 30 September 30 Increase (decrease) Increase (decrease) Amount % Amount % - ----------------------------------------------------------------------------- (In thousands) Salaries and employee benefits $ 689 33% $ 773 12% Occupancy 25 10 21 3 Furniture and equipment 37 20 47 8 Other 33 3 112 4 ------ ---- ------ ---- $ 784 22% $ 953 9% ====== ==== ====== ====
Non-interest expenses for the third quarter totaled $4.3 million, an increase of $784,000, or 22%, from the third quarter of 1996. The majority of the increase is attributable to personnel related expenses, which grew by $689,000 or 33%. 11 Asset Quality
Non-Performing Assets 9/30/97 12/31/96 9/30/96 ------- -------- ------- (In thousands) Non-accrual loans $1,136 $2,131 $ 732 Renegotiated loans 112 408 596 ------ ------ ------ Total non-performing loans 1,248 2,539 1,328 Other real estate -- -- 5 ------ ------ ------ Total non-performing assets $1,248 $2,539 $1,333 ====== ====== ====== Non-performing assets as a percent of total loans .42% .93% .50% Accruing loans 90 days or more past due $ 478 $ 172 $ 13
Total non-performing assets at September 30, 1997 decreased $85,000 or 6% from September of 1996, with increases in non-accrual loans of $404,000 offset by decreases in renegotiated loans of $484,000. As previously reported in the December 31, 1996 Annual Report on Form 10-K, an increase in problem loans at in 1996 was due to one long term credit relationship. In the fourth quarter of 1996 the credit was classified non-accrual and with a subsequent charge to operations of approximately $1.1 million, the carrying value was reduced and the established reserve was substantially increased. In the third quarter of 1997 this credit was resolved with a new borrower within the reserves established in 1996. As a result, non-performing assets are .42% of total loans at September 30, 1997, the lowest in the history of the Corporation. Loans identified as potential problem loans totaled $2.4 million at September 30, 1997, $2.1 million at December 31, 1996 and $5.0 million at September 30, 1996. 12
Allowance for Loan Losses Quarter Ending Nine Months Ending September 30 September 30 1997 1996 1997 1996 - -------------------------------------------------------------------------------- (In thousands) Balance beginning of period $ 4,075 $ 3,375 $ 3,525 $ 3,200 Charge-offs 542 154 888 530 Recoveries 79 55 182 145 ------- ------- ------- ------- Net charge-offs 463 99 706 385 Provision charged to operations 188 416 981 877 ------- ------- ------- ------- Balance September 30 $ 3,800 $ 3,692 $ 3,800 $ 3,692 ======= ======= ======= ======= - -------------------------------------------------------------------------------------- 9/30/97 12/31/96 9/30/96 ------- -------- ------- Net loan losses as a percent of average loans .33% .52% .20% Allowance for loan losses as a percent of end of period loans 1.28% 1.30% 1.38% - ---------------------------------------------------------------------------------------
For the current quarter, net charge-offs increased $364,000 from the same period in 1996, primarily due to the loss, previously reserved for in 1996, on the credit discussed on page 11 within the Non-Performing Assets section. The allowance for loan losses increased $108,000 over the last twelve months and was 1.28% of total loans and 305% of non-performing assets as of September 30, 1997. The increase in the allowance for loan losses is due to the growth in loans over the last twelve months. Under accounting guidance regarding impaired loans, at September 30, 1997 there were $1.01 million in impaired loans with $505,000 for which an allowance for credit losses is allocated. Impaired loans totaled $2.42 million and $951,000 at December 31, 1996 and September 30, 1996. 13 Investment Securities The following is a summary of investment securities, held-to-maturity and available-for-sale, at September 30, 1997.
Held-to-maturity Unrealized Cost Gain Loss Fair Value - -------------------------------------------------------------------------------- U.S. government and agency $12,512 $ 94 $ -- $12,606 State and municipal 8,206 91 -- 8,297 Corporate notes 10,826 57 2 10,881 ------- ----- ----- ------- Total $31,544 $ 242 $ 2 $31,784 ======= ===== ===== =======
Available-for-sale Unrealized Cost Gain Loss Fair Value - -------------------------------------------------------------------------------- U.S. government and agency $35,117 $ 206 $ 30 $35,293 Commercial paper 993 -- -- 993 Equity 2,329 147 -- 2,476 ------- ---- ----- ------- Total $38,439 $ 353 $ 30 $38,762 ======= ===== ===== ======= Mortgage-backed $25,960 $ 197 $ 29 $26,128 ======= ===== ===== =======
A gross realized loss of $7,000 was recognized, with proceeds of $992,000 on the sale of available-for-sale securities during the nine months ended September 30, 1997. A gross realized gain of $1,000 was recognized on the sale of a held to maturity security with proceeds of $1,986,000 during the first nine months of 1997. There were no sales of securities during the nine months ended September 30, 1996. 14 Shareholders' Equity and Capital Resources Total equity at September 30, 1997 was $35.1 million, compared to $32.7 million and $31.7 million at December 31, 1996 and September 30, 1996. The Corporation declared $615,000, or $.35 per share, in dividends for the third quarter of 1997 as compared to $497,000, or $.30 per share in the third quarter of 1996.
The following is a summary of risk-based capital amounts and ratios: Risk-based capital amounts (In thousands) Regulatory Capital Standards Well Capitalized Actual ----------------- -------------------------------- 9/30/97 9/30/97 12/31/96 9/30/96 ----------------- -------- -------- -------- Tier 1 leverage $ 21,070 $ 34,400 $ 32,102 $ 31,287 Tier 1 risk-based 18,120 34,400 32,102 31,287 Total risk-based 30,201 38,175 35,611 34,698 Risk-weighted assets 302,011 280,705 272,639 Quarterly average assets 421,408 396,033 391,074 Risk-based ratios Tier 1 leverage 5% 8.16% 8.11% 8.00% Tier 1 risk-based 6% 11.39% 11.44% 11.48% Total risk-based 10% 12.64% 12.69% 12.73%
Risk-based capital ratios for the Corporation continue to be well above the guidelines established for well-capitalized institutions, which is the highest capital standard. 15 - --------------------------------------------------------------------------- Nine months ended September 30, 1997 compared with 1996 - --------------------------------------------------------------------------- Net income for the nine months ended September 30, 1997 is $3,794,000 or $2.00 per share compared to the $3,328,000 or $1.78 per share earned in the same period of 1996, a 14% increase. Return on average assets for the first nine months of 1997 was 1.24%, as compared to 1.18% in the previous year. The return on average equity was 15.03%, in comparison to the 14.43% earned in the first nine months of 1996. Net interest income (FTE) has increased $1.1 million, or 8.6% to $13.5 million for the first nine months of 1997 as average earning assets increased $26.2 million from 1996. The year to date net interest margin is 4.72% for 1997 as compared to 4.66% for the first nine months of 1996. The average rate earned on assets has increased 3 basis points (bp) to 8.63% and the average rate paid on interest-bearing funds of 4.73% has remained unchanged from the prior year period. Average outstanding loans have increased $26.6 million and securities $4.2 million from 1996. Average total deposits are $353.5 million for the first nine months of 1997, an increase of $30.2 million. Money market investment deposits have grown by $17.8 million, consumer CDs $5.1 million and demand deposits $6.2 million while funding from Federal Home Loan Bank advances has decreased on average $4.3 million. The provision for loan losses was $981,000 and net loan charge-offs were $706,000 for the first nine months of 1997 compared to a provision of $877,000 and net charge-offs of $385,000 in 1996. The allowance for loan losses has been increased by $108,000 over the last twelve months and was 1.28% of total loans at September 30, 1997. Non-interest income has grown $703,000, or 17%, for the first nine months of 1997, mainly due to the $409,000 or 26% increase in trust fee income, $117,000 or 11% increase in fees earned from the origination and sale of mortgage loans. Non-interest expense increased $953,000 or 9% from the comparable prior period essentially due to greater personnel costs increasing $773,000, or 12%, as well as higher expenses, an increase of $130,000, associated with non-earning loans. Total cash dividends for the first nine months of 1997 were $1.05 per share compared to $.86 per share in 1996, a 22% increase. Shareholders' equity increased 10.7% from September of 1996 and at $35.1 million for September of 1997, represents 8.2% of assets. Total risk-based capital in September of 1997 was 12.6% compared to the 12.7% in September of 1996. Recorded in stockholders' equity were unrealized gains of $150,000 during 1997 and unrealized losses of $331,000 in 1996. The unrealized gains and losses of the investment portfolio are not expected to cause a material change in future income or investment yields. 16 Empire Banc Corporation Part II - Other Information Item 4. Submission of matters to a vote of security holders (a) none Item 6. Exhibits and reports on Form 8-K (a) Exhibits - none (b) Reports on 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. Empire Banc Corporation ----------------------- (Registrant) Date: November 7, 1997 /s/ James E. Dutmers, Jr. --------------------------------------- James E. Dutmers, Jr. Chairman and Chief Executive Officer Date: November 7, 1997 /s/ William T. Fitzgerald, Jr. --------------------------------------- William T. Fitzgerald, Jr. Secretary, Treasurer & Chief Financial Officer
EX-27 2 ARTICLE 9 FDS FOR 10-Q
9 1,000 9-MOS DEC-31-1997 SEP-30-1997 17,968 158 6,700 0 64,890 31,544 31,783 297,409 3,800 426,263 371,756 5,000 7,416 7,000 0 0 8,788 26,303 426,263 19,887 4,448 174 24,509 10,575 11,155 13,354 981 (6) 11,651 5,675 5,675 0 0 3,794 2.00 2.00 4.72 1,136 478 112 2,432 3,525 888 182 3,800 2,330 0 1,470
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