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 Quarter Ended June 30, 1996
Commission File Number 33-20685
SEAWAY FINANCIAL CORPORATION
200 S. Riverside Avenue
St. Clair, Michigan 48079
Incorporated in the State of Michigan.
I.R.S. Employer I.D. Number 38-2785653
Registrant's Telephone Number, (including area code):
(810) 326-2244
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
Number of shares of Registrant's Common Stock, $1.00 par value,
outstanding as of June 30, 1996 - 1,685,430.
1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
SEAWAY FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30, 1996 and June 30, 1995
1996 1995
(000's) (000's)
ASSETS
CASH AND CASH EQUIVALENTS
Cash and due from banks $ 10,849 $ 13,570
Federal Funds Sold 7,000 3,850
_______ ______
Total cash and cash equivalents 17,843 17,420
TIME DEPOSITS WITH OTHER BANKS 0 0
MORTGAGES HELD FOR SALE 1,454 307
INVESTMENT SECURITIES HELD TO MATURITY 52,944 52,512
(At cost)
INVESTMENT SECURITIES AVAILABLE FOR SALE 73,216 82,867
(At market) _______ _______
Total Investment Securities 126,160 135,379
LOANS 206,038 183,423
LESS RESERVE FOR POSSIBLE LOAN LOSSES (2,463) (2,204)
_________ ________
Net Loans 203,575 181,219
BANK PREMISES AND EQUIPMENT 7,929 7,244
ACCRUED INTEREST RECEIVABLE AND OTHER ASSETS 4,920 4,979
_______ _______
Total Assets $361,887 $346,548
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
DEPOSITS
Interest Bearing $283,326 $259,189
Non-interest Bearing 37,429 34,039
_______ _______
Total Deposits 320,755 293,228
SHORT-TERM BORROWINGS 30 14,375
ACCRUED INTEREST, TAXES AND OTHER LIABILITIES 1,353 1,295
_______ _______
Total Liabilities 322,138 308,898
STOCKHOLDERS' EQUITY
Common Stock 1,685 1,685
Capital Surplus 31,288 31,288
Undivided Profits 7,059 4,915
Unrealized gain/loss on sec- A-F-S (283) (238)
_______ ________
Total stockholders' equity 39,749 37,650
Total liabilities and stockholders' equity $361,887 $346,548
======= =======
2
SEAWAY FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30, 1996 and December 31, 1995
1996 1995
(000's) (000's)
ASSETS
CASH AND CASH EQUIVALENTS
Cash and due from banks $ 10,849 $ 11,058
Federal Funds Sold 7,000 10,700
_______ ______
Total cash and cash equivalents 17,849 21,758
TIME DEPOSITS WITH OTHER BANKS 0 0
MORTGAGES HELD FOR SALE 1,454 0
INVESTMENT SECURITIES HELD TO MATURITY 52,944 46,779
(At cost)
INVESTMENT SECURITIES AVAILABLE FOR SALE 73,216 77,423
(At market) _______ _______
Total Investment Securities 126,160 124,202
LOANS 206,038 192,283
LESS RESERVE FOR POSSIBLE LOAN LOSSES (2,463) (2,294)
_________ ________
Net Loans 203,575 189,989
BANK PREMISES AND EQUIPMENT 7,929 7,626
ACCRUED INTEREST RECEIVABLE AND OTHER ASSETS 4,920 4,254
_______ _______
Total Assets $361,887 $347,829
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
DEPOSITS
Interest Bearing $283,326 $269,640
Non-interest Bearing 37,429 36,736
_______ _______
Total Deposits 320,755 306,376
SHORT-TERM BORROWINGS 30 760
ACCRUED INTEREST, TAXES AND OTHER LIABILITIES 1,353 1,662
_______ _______
Total Liabilities 322,138 308,798
STOCKHOLDERS' EQUITY
Common Stock 1,685 1,685
Capital Surplus 31,288 31,288
Undivided Profits 7,059 5,965
Unrealized gain/loss on sec- A-F-S (283) 93
_______ ________
Total stockholders' equity 39,749 39,031
Total liabilities and stockholders' equity $361,887 $347,829
======= =======
3
SEAWAY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Three months ending June 30, 1996 and 1995
1996 1995
(000's) (000's)
INTEREST INCOME
Interest and fees on loans $ 4,523 $ 4,151
Investment Securities
Taxable 1,246 1,443
Tax Exempt 526 515
Short-term investments 104 66
Mortgages held for sale 6 4
______ ______
Total interest income 6,405 6,179
______ ______
INTEREST EXPENSE
Deposits 2,690 2,397
Short-term borrowings 3 279
______ ______
Total interest expense 2,693 2,676
______ ______
NET INTEREST INCOME 3,712 3,503
PROVISION FOR LOAN LOSSES 116 23
______ ______
NET INTEREST INCOME AFTER PROVISION 3,596 3,480
______ _____
OTHER OPERATING INCOME
Service Charges on deposit accounts 288 269
Income from fiduciary activities 409 404
Gains(losses) on security transactions (23) 10
Gains(losses) on sales of mortgage loans (19) 5
Bankcard processing fees 44 31
Other 266 247
______ ______
Total other operating income 965 966
______ ______
OTHER OPERATING EXPENSE
Salaries and employee benefits 1,862 1,779
Net occupancy costs 507 442
Supplies 135 128
Processing fees 154 175
Professional fees 150 110
FDIC assessment 1 160
Marketing 54 44
Other 338 322
______ ______
Total other operating expense 3,201 3,160
INCOME BEFORE INCOME TAXES 1,360 1,286
PROVISION FOR INCOME TAXES 282 266
______ ______
NET INCOME $ 1,078 $ 1,020
====== ======
NET INCOME PER COMMON SHARE $ .64 $ .61
====== ======
CASH DIVIDENDS PER COMMON SHARE $ .32 $ .30
====== ======
AVG NUMBER OF COMMON SHARES OUTSTANDING 1,685,430 1,685,430
4
SEAWAY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Six months ending June 30, 1996 and 1995
1996 1995
(000's) (000's)
INTEREST INCOME
Interest and fees on loans $ 8,871 $ 8,080
Investment Securities
Taxable 2,522 2,870
Tax Exempt 1,069 1,063
Short-term investments 223 92
Mortgages held for sale 9 4
______ ______
Total interest income 12,694 12,109
______ ______
INTEREST EXPENSE
Deposits 5,352 4,634
Short-term borrowings 10 589
______ ______
Total interest expense 5,362 5,223
______ ______
NET INTEREST INCOME 7,332 6,886
PROVISION FOR LOAN LOSSES 167 41
______ ______
NET INTEREST INCOME AFTER PROVISION 7,165 6,845
______ _____
OTHER OPERATING INCOME
Service Charges on deposit accounts 554 520
Income from fiduciary activities 858 849
Gains(losses) on security transactions (23) 10
Gains(losses) on sales of mortgage loans (26) 6
Bankcard processing fees 87 78
Other 460 428
______ ______
Total other operating income 1,910 1,891
______ ______
OTHER OPERATING EXPENSE
Salaries and employee benefits 3,674 3,501
Net occupancy costs 1,009 898
Supplies 276 250
Processing fees 331 352
Professional fees 217 196
FDIC assessment 2 319
Marketing 133 88
Other 657 623
______ ______
Total other operating expense 6,299 6,227
INCOME BEFORE INCOME TAXES 2,776 2,509
PROVISION FOR INCOME TAXES 604 509
______ ______
NET INCOME $ 2,172 $ 2,000
====== ======
NET INCOME PER COMMON SHARE $ 1.29 $ 1.19
====== ======
CASH DIVIDENDS PER COMMON SHARE $ 0.64 $ 0.57
====== ======
AVG NUMBER OF COMMON SHARES OUTSTANDING 1,685,430 1,685,430
5
SEAWAY FINANCIAL CORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended June 30, 1996 and 1995
1996 1995
(000's) (000's)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,172 $ 2,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Gain(loss) on sale of investment
securities (23) 10
Loss on sale of fixed assets 81 0
Depreciation and amortization 534 512
Provision for possible loan losses 167 41
Increase in accr. int. & other assets (432) (57)
Decrease in accrued expenses and
other liabilities (262) (422)
Amortization and accretion on securities 434 1,005
Net increase in mortgages held for sale (1,454) (307)
______ ______
Total adjustments (955) 782
______ ______
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,217 2,782
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment securities
Proceeds from maturities A-F-S 17,361 6,507
Proceeds from maturities H-T-M 28,547 7,996
Proceeds from sales A-F-S 2,728 991
Purchases A-F-S (16,859) (8,399)
Purchases H-T-M (34,713) (2,673)
Net increase in loans (13,753) (4,548)
Capital expenditures (1,008) (1,302)
______ ______
NET CASH USED IN INVESTING ACTIVITIES (17,697) (1,428)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in demand, now and
savings deposits (4,177) 1,853
Net increase in certificate of deposit 18,556 9,084
Dividends paid (1,078) (972)
Net (decrease) increase in short term
borrowing (730) (4,492)
______ ______
NET CASH USED IN FINANCING ACTIVITIES 12,571 5,473
______ ______
Net increase (decrease) in cash
and cash equivalents (3,909) 6,827
CASH AND CASH EQUIVALENTS AT JANUARY 1 21,758 10,593
______ ______
CASH AND CASH EQUIVALENTS AT JUNE 30 $ 17,849 $ 17,420
====== ======
6
Item 2. Management's discussion and analysis of financial
condition and results of operations.
Interim Financial Statement: The Interim Financial Statements
furnished include all adjustments which, in the opinion of
management, are necessary to reflect fair statements of the
results for the interim period presented and are recurring in
nature.
Earnings: Seaway reported net income of $2,172,000 in the first
six months of 1996 compared to $2,000,000 in the same period in
1995. Net income for the six months was $1.29 per share, or a
8.4% increase in earnings per share, as compared to the first six
months of 1995 at $1.19 after adjustment of 10% stock dividend
declared April 13, 1996. On an annualized basis, return on
beginning stockholders' equity was 11.1% in the first six months
of 1996 versus 11.4% in the first six months 1995. On an
annualized basis, return on average assets are at 1.23% in the
first six months of 1996, from 1.17% in the same period for 1995.
Earnings of $1,078,000 were recorded for second quarter of 1996.
In the second quarter 1996, earnings were down from the first
quarter results by 1.5%. Second quarter per share earnings were
$.64 compared to second quarter 1995 earnings of $.61 per share
after adjusting for the 10% stock dividend declared on April 13,
1996.
Net Interest Income: For the first six months of 1996, net
interest income, after provision for loan losses, was $7,165,000,
a 4.7% increase from the first six months of 1995 net interest
income after loan loss provision of $6,845,000. The increase was
due primarily to a 12.3% increase in the loan portfolios of the
two subsidiary banks. Deposits increased by $13,182,000 or 4%,
after adding Repurchase Agreements, in the first six months of
1996 as compared to the first six months of 1995. With the
decrease of mutual fund growth, it is noted that additional funds
are being added to the various bank deposit accounts.
Total loans increased by $22,615,000 with an additional increase
of $1,147,000 in Mortgages held for sale from June 30, 1995.
Loan quality remains strong as non-performing loans represent
1.1% of total loans outstanding. Net loan charge offs for the
first six months were actually in a net recovery position.
Other Income: Total other income in the first six months of 1996
increased to $1,910,000 from $1,891,000 in the first six months
of 1995, for a increase of 1%. The five major factors were a
1.1% increase in fiduciary income from trust operations totaling
$9,000; an increase of $34,000 in Service Charges on Deposit
accounts; an increase of $42,000 in Brokerage Fees; an increase
of $24,000 in Income from other real estate; a decrease of
$33,000 in Security transactions; and a decrease of $32,000 in
the Sale of Mortgage Loans. With the constant pressure on
interest margins, management is very conscious that other income
must be developed to offset the continuing increase in the cost
of doing business. Mortgages Originated and Sold totaled
$3,692,000 for the first six months of 1996 and totaled
$2,147,000 for the first six months of 1995.
LOANS HELD FOR SALE
(in thousands)
YTD YTD YTD
06/30/96 12/31/95 06/30/95
Loan originations sold for the
period ending $3,692 $ 6,959 $ 2,147
Gains on loan originations sold
for the period ending $ (10) $ 41 $ 6
Loans originated for sale -
not yet sold $ 1,454 $ 0 $ 307
SFAS 122, Mortgage Servicing Rights accounting was implemented
effective January 1, 1996. The calculation of the capitalized
amounts have not been material in either the quarters ending
March 30, 1996, or June 30, 1996.
7
Other Expenses: Total Other Expenses increased by 1.0% or
$72,000 in the first six months of 1996 compared to the first
six months of 1995. Salary and benefits expenses were
increased $173,000 or 4.9% above 1995 levels. If performance
levels continue throughout December 31, 1996 as they have in
the first six months of 1996, the Incentive Compensation and
Profit Sharing Plans will provide for a payout to participants
in the plans. Accruals have been established in the financial
information for the anticipated amounts as if the current
financial performance is continued through the end of year 1996.
This handling of anticipated payout is consistent with the
handling in previous years. Net Occupancy costs have increased
by $111,000, or 12.4% above 1995 levels. Professional Fee
Expense increased by $21,000 and FDIC expense decreased by
$317,000 below 1995 levels. Marketing costs have increased by
$45,000 above 1995 levels. Management continues to look at ways
to reduce our operating costs.
Reserve/Provision for Loan Losses: Management at each
subsidiary Bank monitors the adequacy of the reserve on a
quarterly basis with an in-depth review of all non-accrual
loans, other real estate, loans 90 days past due and all
other loans where the financial statements of the Borrower
reveal a deterioration in financial strength. After each
review, specific sums in the loan loss reserve are allocated
to weak situations and the remaining balance is tested
for adequacy when measured by historical loss experience
and anticipated changes in the economic environment.
At all times during the past three years, the reserve accounts
were deemed to be fully adequate to cover the credit risks in
each of the bank portfolios. A specific loan loss reserve
does not exist for potential losses on loan commitments. No
losses from loan commitments have occurred in 1996, 1995
or 1994.
Management is not aware of any loans classified for regulatory
purposes as loss, doubtful, substandard, or special mention
that have not been disclosed under Item III of Industry Guide
III that (1) represent or result from trends or uncertainties
which management reasonably expects will materially impact
future operating results, liquidity or capital resources, or
(2) represent material credits about which management is aware
of any information which causes management to have serious
doubts as to the ability of such borrowers to comply
with the loan repayment terms. We know of no trends, events
or uncertainties that presently exist that are reasonably likely
to have a material effect on our liquidity, capital resources or
operations. The regulatory authorities have not made any
recommendations that would impact our liquidity, capital
resources or operations. FAS 114, which is based on the analysis
of expected cash flows and collateral values, required no
additional reserve for possible loan losses for impaired loans as
of June 30, 1996.
At June 30, 1996 the reserve account was $2,463,000 which
represented 1.20% of total loans outstanding. Our current goal
is to maintain the reserve for loan losses at 1.20% of total
loans outstanding. At June 30, 1995 this reserve account was
$2,204,000 or 1.20% of total loans outstanding. At December 31,
1995 the reserve for loan losses was $2,294,000 which was 1.19%
of total loans outstanding. Loan losses net of recoveries for
the first six months of 1996 were a net recovery of $2,000 versus
a net loss of $7,000 for the first six months of 1995. Loan
quality continues to remain at a high level with net loan
charge-offs for the first six months being negligible.
8
RESERVE FOR LOAN LOSSES
(in thousands)
as of June 30, 1996
06/30/96 12/31/95 06/30/95
Reserve for loan losses as a
percentage of nonperforming
loans 108.5% 145.6% 124.2%
Reserve for loan losses as a
percentage of nonperforming
assets 85.1% 135.3% 103.1%
Reserve for loan losses as a
percentage of loans outstanding
at six months end 1.20% 1.19% 1.20%
Non-Performing Assets: Non-Performing Assets are defined as
Non-Accrual, Other Real Estate Owned and Restructured Loans.
Generally, the accrual of interest income on a loan is suspended
when the loan becomes 90 days past due unless the loan is fully
collateralized and is in the process of collection. A
restructured loan is one that is accruing interest, but on
which concessions in the original terms of the loan have
been made due to a weakening in the financial strength of
the borrower. Management's policy for returning a non-performing
loan to a performing loan status is that the loan must be
current (all principal and interest payment made.) Any loan that
is returned to performing status is watched closely. It is not
our practice to loan split.
9
NON-PERFORMING ASSETS
(In Thousands)
as of June 30, 1996
06-30-96 12-31-95 06-30-95
Impaired loans under FAS 114 (1) $ 1,753 $ 1,236 $ 0
Non-accrual loans:
Restructured loans 0 0 0
Original terms 200 130 646
Accruing loans past due
90 Days or more 318 210 1,128
________ _________ ________
Total nonperforming loans $ 2,271 $ 1,576 $ 1,774
Other real estate owned 623 120 364
________ ________ ________
Total nonperforming assets $ 2,894 $ 1,696 $ 2,138
======== ======== ========
Nonperforming loans as a
percentage of total loans 1.10% .82% .97%
Nonperforming assets as a
percentage of total loans
plus other real estate owned 1.40% .88% 1.16%
Nonperforming assets as a
percentage of total assets .80% .49% .62%
Investment Securities: Securities are recorded in accordance
with Financial Accounting Standards Board Statement No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities", which requires an investment in a security to be
classified based on the Corporation's intent with respect to
holding securities. The following summarizes the classification
of securities held at June 30, 1996 and 1995 as well as December
31, 1995. The effect of SFAS 115 in the first six months of 1996
was a decrease in assets of $425,000 and a decrease in equity of
$283,000, net of deferred tax credits of $142,000.
10
INVESTMENT SECURITIES
06/30/96 06/30/95
Amort Cost Amort Cost
U.S. Government agencies $34,462 $34,273 $44,175 $43,875
and obligations - A.F.S.
U.S. Government agencies 0 0 0 0
and obligations - H.T.M.
Municipal Bonds - H.T.M. 39,144 39,825 37,910 39,018
Municipal Bonds - A.F.S. 1,090 1,096 222 225
Other Securities - A.F.S. 1,863 1,912 1,863 2,025
Other Securities - H.T.M. 13,800 13,483 14,602 14,383
Mortgage Backed 36,226 35,935 36,966 36,742
Securities - A.F.S. _______ _______ _______ _______
Total Investments $126,585 $126,524 $135,738 $136,268
======== ======== ======== ========
Available for Sale
U.S. Government agencies $34,273 $43,875
and obligations
Municipal Bonds 1,096 225
Other Securities 1,912 2,025
Mortgage Backed Securities 35,935 36,742
_______ _______
Total $73,216 $82,867
======= =======
Held to Maturity:
U.S. Government agencies $ 0 $ 0
and obligations
Municipal Bonds 39,144 37,910
Other Securities 13,800 14,602
Mortgage Back Securities 0 0
_______ _______
Total $52,944 $52,512
======= =======
11
INVESTMENT SECURITIES
06/30/96 12/31/95
Amort Cost Amort Cost
U.S. Government agencies $34,462 $34,273 $39,278 $39,316
and obligations - A.F.S.
U.S. Government agencies 0 0 0 0
and obligations - H.T.M.
Municipal Bonds - H.T.M. 39,144 39,825 38,136 39,462
Municipal Bonds - A.F.S. 1,090 1,096 1,097 1,114
Other Securities - A.F.S. 1,863 1,912 1,863 1,950
Other Securities - H.T.M. 13,800 13,483 8,643 8,537
Mortgage Backed 36,226 35,935 35,044 35,043
Securities - A.F.S. _______ _______ _______ _______
Total Investments $126,585 $126,524 $124,061 $125,422
======== ======== ======== ========
Available for Sale
U.S. Government agencies $34,273 $39,316
and obligations
Municipal Bonds 1,096 1,114
Other Securities 1,912 1,950
Mortgage Backed Securities 35,935 35,043
_______ _______
Total $73,216 $77,423
======= =======
Held to Maturity:
U.S. Government agencies $ 0 $ 0
and obligations
Municipal Bonds 39,144 38,136
Other 13,800 8,643
Mortgage Back Securities 0 0
_______ _______
Total $52,944 $46,779
======= =======
12
Liquidity: At June 30, 1996, Seaway's net liquidity ratio was
39.2%. At December 31, 1995, this ratio was 35.7% and at June
30, 1995, it was 39.8%. Net liquid assets are comprised of
investment securities that are not pledged, federal funds sold,
bankers acceptances, cash and due from banks and time deposits
in other banks, less any reserve requirements.
This strong liquidity position allows us to meet any increasing
loan demands of our customers or to absorb any short term
decline in deposits which might be experienced.
Captial Management: Seaway is dedicated to maintaining a
capital position in excess of eight percent equity capital to
total assets. In light of the current regulatory and banking
environment, this is more important today than it ever has been.
Depositor and investor confidence is necessary to continue to
operate profitably. This also places the Corporation in a
position to expand through new offices or acquisitions should
these opportunities arise. Seaway's primary capital ratio which
includes stockholders' equity and loan reserves, at June 30, 1996
was 11.7% as well as 11.6% at June 30, 1995 and 11.9% at December
31, 1995. Return on equity capital at June 30, 1996 was 11.1%.
This same ratio was 10.6% at June 30, 1995 and 11.2% at December
31, 1995.
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the reqistrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SEAWAY FINANCIAL CORPORATION
Date: August 12, 1996 /s/Franklin H. Moore, Jr.
Franklin H. Moore, Jr.
Chairman of the Board of Directors
and Treasury as Principal Executive
Officer and Principal Financial and
Chief Accounting Officer of the
Registrant
14
PART II OTHER INFORMATION
Item 1. Legal Proceedings:
None
Item 2. Changes in Securities:
None
Item 3. Defaults upon Senior Securities:
None
Item 4. Submission of Matters to a Vote of Security Holders:
None
Item 5. Other Information:
On June 3, 1996, a Letter of Intent was signed for
the merger of Seaway Financial Corporation into Old
Kent Financial Corporation, Grand Rapids, Michigan.
David Wagner, Chairman and CEO of Old Kent, stated
"the merger with Seaway provides a natural extension
of Old Kent's markets from Oakland and Macomb Counties
into the adjacent St. Clair County. The projected
growth in households, population and employment in
St. Clair County should provide strong demand for
Old Kent's banking services." According to
Franklin H. Moore, Jr. Chairman and CEO of Seaway
Financial Corporation, "this affiliation with Old
Kent will provide a broader array of banking and
trust services to Seaway customers with the same
personal touch and high quality they have
traditionally enjoyed." The merger is subject
to execution of a definitive agreement, approval
by Seaway shareholders and regulators, and
other customary conditions. It is expected to
be completed by year-end.
Based on the current market value of Old Kent common
stock, Seaway shareholders would receive Old Kent
common stock in a tax free exchange valued at $43.91
for approximately $74 million. Old Kent intends to
repurchase an equal number of shares in the open
market. Old Kent Financial Corporation is a bank
holding company headquartered in Grand Rapids,
Michigan with 216 offices in Michigan and Illinois.
Our negotiations with Old Kent Financial Corporation
continue to progress well. The major part of the due
diligence has been done by both parties and work
continues on completion of the definitive agreement.
we anticipate executing this agreement by mid-August
and moving on to shareholder and regulatory approval.
We are hopeful of closing prior to year-end.
We opened a new branch office in leased quarters on
June 10, 1996, at the following location:
MainStreet/Port Huron Office
400 Huron Avenue
Port Huron, MI 48060
The Directors at their July meeting declared a $.32
per share dividend payable on September 10, 1996, to
shareholders of record on August 20, 1996.
Item 6. Exhibits and Reports on Form 8-K
None
15