1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 0-16356
CENTRAL BANCORPORATION
(Exact name of small business issuer as specified in its charter)
WASHINGTON 91-1203145
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION IDENTIFICATION NUMBER
301 NORTH CHELAN AVENUE
WENATCHEE, WASHINGTON, 98801
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(509) 663-0733
(ISSUER'S TELEPHONE NUMBER)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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
----- ------
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the last practicable date.
1,015,315 shares of common stock outstanding at June 30, 1996
Transitional Small Business Disclosure Format (check one):
Yes No X
----- ------
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CENTRAL BANCORPORATION
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following Consolidated Financial Statements are presented for
Registrant, Central Bancorporation, its wholly owned subsidiaries, Central
Washington Bank, North Central Washington Bank, and Central Financial Services,
Inc., the wholly owned subsidiary of Central Washington Bank.
1. Consolidated balance sheets for December 31, 1995 and June 30, 1996.
2. Consolidated statements of operations for the second quarter and first
six months ended June 30, 1996 and 1995.
3. Consolidated statements of cash flows for the six months ended June
30, 1996 and 1995.
4. Notes to consolidated financial statements.
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CENTRAL BANCORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
- --------------------------------------------------------------------------------------------
JUNE 30, DECEMBER 31,
1996 1995
- --------------------------------------------------------------------------------------------
ASSETS
Cash and due from banks $9,762 $10,507
Interest bearing deposits in other banks 16,127 9,387
-------- --------
Cash and cash equivalents 25,889 19,894
Securities available for sale, at market 22,716 26,336
Securities held to maturity (market value
of $14,520 in 1996 and $16,744 in 1995) 14,579 16,719
Loans 132,792 132,894
Less allowance for loan losses 2,008 1,795
-------- --------
Loans, net 130,784 131,099
Accrued interest receivable 1,687 1,628
Federal Home Loan Bank stock 943 910
Premises and equipment, net 5,841 6,074
Other assets, net 829 752
-------- --------
Total assets $203,268 $203,412
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing demand $27,474 $27,363
Interest-bearing 153,562 152,550
-------- --------
Total deposits 181,036 179,913
Short-term borrowings 2,732 2,895
Notes payable 500 2,295
Accrued interest and other liabilities 2,541 2,456
-------- --------
Total liabilities 186,809 187,559
Stockholders' equity:
Common stock, $1.67 par value. Authorized
3,000,000 shares; issued and outstanding
1,015,315 in 1996 and 1,014,565 in 1995. 1,692 1,691
Surplus 2,692 2,678
Retained earnings 12,114 11,459
Unrealized gain (loss) on securities available for sale (39) 25
-------- --------
Total stockholders' equity 16,459 15,853
-------- --------
Total liabilities and stockholders' equity $203,268 $203,412
======== ========
See accompanying notes to consolidated financial statements.
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CENTRAL BANCORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts) (unaudited)
- ------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30,
1996 1995 1996 1995
- ------------------------------------------------------------------------------------------------------
INTEREST INCOME:
Interest and fees on loans $3,214 $3,176 $6,402 $6,175
Interest on securities:
Taxable 462 526 977 1,102
Exempt from federal income tax 62 52 122 104
Other interest income 271 111 474 189
------ ------ ------ ------
Total interest income 4,009 3,865 7,975 7,570
INTEREST EXPENSE:
Interest on deposits 1,489 1,463 3,000 2,737
Interest on borrowings 76 96 166 198
------ ------ ------ ------
Total interest expense 1,565 1,559 3,166 2,935
------ ------ ------ ------
Net interest income 2,444 2,306 4,809 4,635
Provision for loan losses - - - -
------ ------ ------ ------
Net interest income after the
provision for loan loss 2,444 2,306 4,809 4,635
OTHER INCOME:
Loan servicing fees 62 49 125 98
Service charges on deposit accounts 259 253 505 502
Gain on sales of loans, net 80 101 166 139
Other service charges and fees 163 157 315 290
------ ------ ------ ------
Total other income 564 560 1,111 1,029
Other expenses:
Salaries and employee benefits 1,013 985 2,115 2,010
Occupancy expense of premises 125 122 278 238
Printing, stationery and supplies 66 87 154 176
Equipment and data processing 165 186 341 354
Legal and professional 82 48 253 102
Business and occupation taxes 51 53 103 98
Deposit insurance assessment 1 98 2 196
Other 280 308 561 616
------ ------ ------ ------
Total other expenses 1,783 1,887 3,807 3,790
------ ------ ------ ------
Income before income tax expense 1,225 979 2,113 1,874
Income tax expense 355 307 647 573
------ ------ ------ ------
Net income $870 $672 $1,466 $1,301
====== ====== ====== ======
Net income per share $0.82 $0.65 $1.39 $1.25
====== ====== ====== ======
See accompanying notes to consolidated financial statements.
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CENTRAL BANCORPORATION
Consolidated Statements of Cash Flows
(Dollars in Thousands) (unaudited)
- --------------------------------------------------------------------------------------------
SIX MONTHS ENDED June 30,
1996 1995
- --------------------------------------------------------------------------------------------
OPERATING ACTIVITIES:
Net income $1,466 $1,301
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 284 256
Cash provided (used) by changes in operating
assets and liabilities:
Origination of loans held for sale (8,825) (10,837)
Proceeds from sale of loans 9,532 10,800
Loan fees deferred, net of amortization 52 111
Dividends on FHLB stock (34) (25)
Other (482) (85)
-------- --------
Net cash provided by operating activities 1,993 1,521
INVESTING ACTIVITIES:
Proceeds from maturing securities held to maturity 14,471 1,309
Purchase of securities held to maturity (10,902) (317)
Proceeds from maturing securities available for sale 5,005 7,776
Purchase of securities available for sale (2,847) (1,021)
Loans originations, net of principal repayments (445) (10,402)
Acquisition of premise and equipment (51) (23)
------- --------
Net cash used in investing activities 5,231 (2,678)
FINANCING ACTIVITIES:
Net increase (decrease) in deposits 1,125 2,031
Net increase in short-term borrowings (163) 390
Proceeds from stock options exercised 15 57
Principal payments on notes payable (1,800) (300)
Cash dividends (406) (350)
------- -------
Net cash provided by (used in) financing activities (1,229) 1,828
Net increase in cash and cash equivalents 5,995 671
Cash and cash equivalents at beginning of year 19,894 19,306
------- -------
Cash and cash equivalents at end of period $25,889 $19,977
======= =======
Supplemental disclosure of cash flow information:
Cash paid during the period for: Interest $3,060 $2,563
Income tax 726 555
See accompanying notes to consolidated financial statements.
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CENTRAL BANCORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with instructions to Form 10-QSB. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
six months ended June 30, 1996 are not necessarily indicative of the results
anticipated for the year ending December 31, 1996. For additional information
refer to the consolidated financial statements and footnotes thereto included in
Central Bancorporation's annual report on Form 10-KSB for the year ended
December 31, 1995.
2. NET INCOME PER SHARE
Net income per share is computed using the weighted average number of
common stock outstanding, including shares issuable under stock options plans,
when dilutive, during the periods presented.
The weighted average number of shares outstanding used to compute net
income per share was 1,058,137 during the quarter and 1,055,203 during the six
month periods in 1996 and 1,037,770 during the quarter and 1,038,438 during the
six month periods in 1995, respectively.
3. STATEMENT OF CASH FLOWS
For purposes of reporting cash flows, cash and cash equivalents include
cash and due from banks, interest bearing deposits, and federal funds sold.
4. CONSOLIDATION
The consolidated financial statements include the accounts of Central
Bancorporation, Central Washington Bank, North Central Washington Bank, and
Central Financial Services, Inc. All significant inter-company balances and
transactions have been eliminated in consolidation.
5. PENDING MERGER
On January 10, 1996, Bancorp and its subsidiary banks entered into an
agreement and plan of mergers with InterWest Bancorp, Inc., Oak Harbor,
Washington and InterWest's subsidiary, InterWest Savings Bank, pursuant to which
Bancorp will be merged into InterWest. The merger agreement provides that
Bancorp's common stock will be exchanged for shares of InterWest common stock
pursuant to a specified exchange ratio. Consummation of the acquisition is
subject to several conditions, including receipt of applicable regulatory
approval. Stockholder approval was obtained during June of 1996.
6. DIVIDEND PAYABLE
On June 26, 1996, the directors of Bancorp declared a $.40 dividend
payable on July 26,1996, to those stockholders of record on July 10, 1996. The
amount of the dividend payable was recorded as a reduction in retained earnings
and an increase in accrued interest and other liabilities.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
GENERAL
This discussion is provided for Central Bancorporation ("Bancorp") and
wholly owned subsidiaries Central Washington Bank ("Central") and North Central
Washington Bank ("North Central"). Central and North Central operate in ten
locations, located in North Central Washington, and provide families and
businesses with a wide variety of financial services, primarily loans and
deposits. Central Washington Bank's wholly owned subsidiary, Central Financial
Services, Inc. provides banking customers with financial products, such as
annuities and mutual funds.
PENDING MERGER
On January 10, 1996, Bancorp and its subsidiary banks entered into an
agreement and plan of mergers with InterWest Bancorp, Inc., Oak Harbor,
Washington and InterWest's subsidiary, InterWest Savings Bank, pursuant to
which Bancorp will be merged into InterWest. The merger agreement provides
that Bancorp's common stock will be exchanged for shares of InterWest common
stock pursuant to a specified exchange ratio. Consummation of the merger is
subject to several conditions, including receipt of applicable regulatory
approval. Shareholder's of Bancorp and InterWest, respectively, approved the
agreement and plan of mergers during June 1996.
Subject to regulatory approval, it is anticipated that the merger will
be consummated during the third quarter of 1996. It is anticipated the merger
transaction will be recorded using the pooling of interests method of
accounting.
RESULTS OF OPERATIONS
Net income
Net income for the second quarter of 1996 increased by 29 percent to
$870,000 or $.82 per share compared to $672,000 or $.65 per share during the
same period a year ago. Net income for the first six months increased by 13
percent to $1,466,000 or $1.39 per share compared to $1,301,000 or $1.25 per
share a year ago. The annualized return on average assets during the first six
months of 1996 was 1.44 percent compared to 1.34 percent during the same period
last year. These results were achieved despite non-recurring legal and
professional fees, associated with the pending merger with InterWest, incurred
during the first half of 1996.
The second quarter improvement in earnings was the result of an
increase in net interest income and a decrease in other expenses. The
improvement in earnings for the first six months was the result of an increase
in net interest income and other income, partially offset by an increase in
other expenses. The six month increase in other expenses occurred primarily in
occupancy expense of premises and legal and professional, partially offset by a
lower deposit insurance assessment. The increase in legal and professional is
primarily associated with the proposed merger with InterWest Bancorp, Inc.,
while the reduction in deposit insurance assessment resulted from a lower
assessment rate enacted by the Federal Deposit Insurance Corporation ("FDIC").
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Net interest income
Net interest income during the second quarter of 1996 totaled
$2,444,000 a $138,000 (6.0 percent) increase over 1995. Net interest income
during the first six months of 1996 totaled $4,809,000 a $174,000 (3.8 percent)
increase over 1995. The increase in both periods resulted from an increase in
net earning assets partially offset by a lower net interest rate spread. The
table below (in thousands) is illustrative:
1996 1995
---- ----
Balance Yield * Balance Yield *
------- ------- ------- -------
Average earning assets:
Loans $ 130,324 9.88% $ 126,434 9.85%
Investments 40,777 5.69 46,080 5.48
Other 18,142 5.25 6,424 5.96
-------- ---- -------- ----
Total 189,243 8.53 178,938 8.58
Average interest-bearing
liabilities:
Deposits 153,899 3.92 149,413 3.70
Other 4,080 6.46 5,678 7.03
--------- ---- -------- ----
Total 157,979 3.99 155,091 3.82
--------- ---- -------- ----
Net earning assets $ 31,264 5.21% $ 23,847 5.27%
========= ==== ========= ====
*Annualized with a 34 percent tax equivalent adjustment.
Net interest income is influenced by changes in both interest rates
(rate) and changes in interest-bearing assets and liabilities (volume). The
table presented below (adjusted for tax equivalency and in thousands) is an
analysis of these changes for the second quarter and first six months of 1996
compared to the same period a year ago.
SECOND QUARTER YEAR-TO-DATE
----------------------------------------- --------------------------------------------
Interest Interest Net Int. Interest Interest Net Int.
Income Expense Income Income Expense Income
------ ------- ------ ------ ------- ------
Rate $ 6 $ (12) $ 18 $ 20 $ 122 $ (102)
Volume 155 ( 6) 161 394 74 320
------- ------- ------- ------- ------- -------
$ 161 $ (18) $ 179 $ 414 $ 196 $ 218
======= ======= ======= ======= ======= =======
Bancorp's average earning assets for the first six months of 1996
increased $10,305,000 over the first six months of 1995 while Bancorp's average
interest-bearing liabilities increased $2,888,000 during the same period,
respectively. The difference between the interest earned and the interest paid
on this increased volume resulted in approximately $161,000 in additional net
interest during the second quarter of 1996 and approximately $320,000 in
additional net interest income during the first six months of 1996 compared to
the same periods a year ago, respectively.
The yield on earning assets decreased slightly during the first six
months of 1996 compared to the same period last year. An increase in yield was
experienced in loans and investment securities, while the yield on other
earning assets decreased from 5.96 percent to 5.25 percent. The decrease in
yield on other earning assets is a reflection of lower short term interest
rates, primarily the federal funds rate, experienced during 1996 when compared
to the same period in 1995. Bancorp's cost of funds increased 17 basis points
during the first six months of 1996 to 3.99 percent as compared to 3.82 percent
last year. The increase in the deposit rate occurred as a result of lagging
deposit
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maturities which repriced later in 1995 and 1996 to a higher rate. Because of
this increase in the cost of funds, Bancorp's net interest margin decreased
from 5.27 percent during 1995 to 5.21 percent during 1996.
Bancorp continues to be liability sensitive to interest rates, i.e.
liabilities are subject to repricing faster than assets. Therefore, any future
rate increases may have a negative impact on Bancorp's net interest margin.
However, the impact on Bancorp's net interest margin is dependent on the
magnitude and direction of future interest rates, deposit customer
alternatives, and Bancorp's need for liquidity.
Bancorp has approximately $84.6 million in savings and checking
accounts and an additional $57.9 million in other interest bearing deposits
whose interest rates may increase along with other market interest rates,
during the next year. Historically, the interest rates paid on savings and
checking accounts lag and do not increase as far as the rates earned on loans
and investments. Both savings and checking rates have been relatively stable
over the past year, however, competitive pressures may necessitate raising
these rates in the future. Bancorp has approximately $95.6 million in earning
assets repricing or maturing within the next year to partially offset the
effect of increasing deposits interest rates. In the event savings and checking
rates continue to remain stable, Bancorp's interest rate sensitivity becomes
somewhat asset sensitive. In that event, lower future interest rates may result
in a lower net interest margin.
Provision and Allowance for Loan Losses
Bancorp did not provide for any loan losses during the first six
months of 1996 and 1995. Bancorp had net loan recoveries of $213,000 and
$44,000 during the first six months of 1996 and 1995, respectively. The effect
of the net recoveries, was to increase in the allowance for loan losses without
making any provisions. Although Bancorp received a significant loan recovery
during the second quarter of 1996 Bancorp anticipates loan recoveries to slow
in the future, which may necessitate the resumption of modest loan loss
provisions.
The allowance for loan losses totaled $2,008,000 (1.51 percent of
loans) at June 30, 1996, compared to $1,795,000 (1.35 percent of loans) at
December 31, 1995. Based upon management's continuing evaluation of inherent
risks in the loan portfolio, current levels of classified assets, and economic
factors, management believes the allowance is adequate to absorb potential
losses in the current portfolio.
Other Income and Expense
Other income increased $82,000 or 8 percent during the first six
months of 1996 when compared to the same period a year ago. Other income for
the second quarter of 1996 increased slightly over the same period a year ago.
An increase in loan servicing fees and gains on sales of loans were primarily
responsible for the six month increase, however, gains on the sales of loans
decreased during the second quarter as longer term interest rates increased.
Also during the second quarter Bancorp's data processing income declined as
customers found alternate processors in anticipation of the pending merger
with InterWest Bancorp, Inc.
Bancorp continues to be active in mortgage banking, i.e., the
origination and sale of real estate loans. Fees received for originating these
loans are deferred and later recognized as income at the time of sale. These
fees are included in the gain on sale of loans.
Real estate loan volume and related fees are generally dependent on
the direction of interest rates. As rates decrease, loan origination volume and
fees usually increase, and as rates increase, loan origination volume and fees
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normally decrease. During 1996, Bancorp originated for sale approximately $8.8
million real estate loans compared to $10.8 million during the same period in
1995.
Gain on sale of loans is also dependent on the direction of rates and
the volume of loans sold. Bancorp sells loans to investors in the secondary
market at yields different than the originated yield, which result in gains and
losses. As interest rates increase, the opportunity for gains decrease and as
interest rates decrease, the opportunity for gains increase. The volume of
real estate loans sold during 1996 was $9.5 million compared to $10.8 million
during the same period in 1995.
Other expenses increased $17,000 or .5 percent during the first six
months of 1996 and decreased $104,000 or 5 percent during the second quarter of
1996 when compared to the same periods last year. The six month increase
occurred primarily in Bancorp's occupancy expense of premises and legal and
professional fees, partially offset by a significant decrease in deposit
insurance assessments. The increase in legal and professional fees is
associated with the proposed merger with InterWest Bancorp, Inc. Some
additional fees are expected to be incurred until the merger in consummated,
which is anticipated to occur during the third quarter of 1996. The decrease in
deposit insurance assessments resulted from the FDIC adopting a rule which
reduced the assessment banks pay for deposit insurance from $.23 to $.31 per
$100 of insured deposits to a new range of $.00 to $.31. This reduction in
assessment is anticipated to continue as long as Bancorp's subsidiary banks
maintain their favorable insurance risk rating. Other expenses as a percent of
average assets (annualized) was 3.7 percent in 1996 and 3.9 percent in 1995.
FINANCIAL CONDITION
Bancorp as a financial intermediary attracts deposits and invests
those funds in earning assets, primarily loans and investment securities,
hopefully for profit. As of June 30, 1996, Bancorp's total assets decreased
slightly since December 31, 1995. However cash and cash equivalents increased
approximately $6.0 million and was funded by a similar decrease in securities
available for sale and held to maturity. The increase in cash and cash
equivalents was the result of a managements decision in anticipation of the
pending merger with InterWest Bancorporation. Total deposits increased $1.1
million during the period while notes payable decreased $1.8 million. For more
information on the change in cash and cash equivalents, see the Consolidated
Statements of Cash Flows on page 5 of this report.
Loans and Deposits
Below are summaries of outstanding loans and deposits at June 30, 1996
compared to December 31, 1995 (in thousands):
1996 1995
---- ----
Loans
- -----
Commercial $ 21,358 $ 19,891
Real Estate
Construction 9,387 8,018
Commercial 26,616 27,306
1-4 Single family 40,523 39,640
Installment 19,394 20,426
Agricultural 12,595 13,594
Other 2,919 4,019
--------- ---------
Total loans $ 132,792 $ 132,894
========= =========
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Deposits
- --------
Non-interest bearing $ 27,474 $ 27,363
Interest bearing demand 39,012 38,526
Money market accounts and
other savings accounts 45,578 47,476
Time deposits, $100,000 or more 15,276 13,459
Other time deposits 53,696 53,089
--------- --------
Total deposits $ 181,036 $ 179,913
========= =========
Non-accrual and Past Due Loans
Certain information regarding non-accrual, past due, and restructured
loans is set forth in the following table (in thousands):
JUNE 30, DECEMBER 31,
1996 1995 1995
------- ------- -------
Past due 30+ days and
still accruing $ 1,815 $ 1,680 $ 2,305
Non-accrual loans 815 168 228
Past due and non-accrual
loans as a percentage
of loans 2.0% 1.4% 1.9%
The total of past due loans and non-accrual loans increased $97,000 to
$2,630,000 at June 30, 1996 compared to $2,533,000 at December 31, 1995. In
addition, Bancorp's total past due and non-accrual loans increased $782,000 or
42 percent since June 30, 1995. The increase since December 31, 1995 was
primarily in loans commercial loans and credit card loans partially offset by
an decrease in past due real estate and agriculture loans. The increase since
June 30, 1995 was primarily in 1 to 4 single family real estate loans, consumer
loans, and commercial loans. Bancorp expects an increase in future charge-offs
as a result of the above trend in past due and non accrual loans but does not
anticipate any significant losses with respect to these loans or any other
assets not reported above.
Stockholders' Equity and Liquidity
Bancorp's stockholders' equity at June 30, 1996 was $16,459,000
compared to $15,853,000 at December 31, 1995. On a per share basis,
stockholders' equity totaled $16.21 compared to $15.63 on the same dates,
respectively. Bancorp's annualized return on average equity during the first
six months of 1996 totaled 18.3 percent compared to 18.9 percent during the
same period a year ago. The increase in stockholders' equity was the result of
the retention of earnings after payment/accrual of $811,000 in cash dividends,
$15,000 from the exercise of 750 shares related to stock options, and by a
$64,000, net of tax, increase in the unrealized loss on securities available
for sale.
Current regulatory capital adequacy guidelines require bank holding
companies and banks to maintain a minimum "leverage" ratio of core capital
(which excludes unrealized gain and losses on securities available for sale) to
average total assets of at least 4 percent.
In addition to the leverage ratio requirements, the Bancorp is subject
to risked-based capital guidelines, under which risk percentages are assigned
to various categories of assets and off balance sheet items to calculate a
risk-adjusted capital ratio. They require, Tier I capital of 4 percent and
Total capital of 8 percent.
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Below is a summary of the various capital ratios of Bancorp and
subsidiaries at June 30, 1996 compared to December 31, 1995.
North Regulatory
Ratio Bancorp Central Central Minimum
- ----- ------- ------- ------- ---------
Leverage 6/30/96 7.98% 8.20% 7.96% 4.0%
12/31/95 7.72 8.43% 8.50%
Tier I capital 6/30/96 12.33% 12.01% 14.37% 4.0%
12/31/95 11.71% 12.17% 14.92%
Total capital 6/30/96 13.58% 13.26% 15.67% 8.0%
12/31/95 12.96% 13.42% 16.17%
The above ratios do not include unrealized gains and losses on
securities available for sale which are excluded from the ratios by the federal
regulatory agencies.
Bancorp's liquidity position increased slightly during the first six
months of 1996 as a result of decreased loan demand and higher deposits.
Bancorp believes its liquidity to be more than adequate to meet future funding
needs. Liquidity indicators include the loan to deposit ratio, which totaled 73
percent and 74 percent on June 30, 1996 and December 31, 1995, respectively,
and the amount of interest bearing deposits and investment securities maturing
in one year, which totaled $38,137,000 and $40,128,000 on the same dates,
respectively. Deposits in excess of $100,000 and short-term borrowing,
considered by Bancorp as volatile liabilities, increased from $13,459,000 at
December 31, 1995 to $18,008,000 at June 30, 1996.
PART II OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) Bancorp's 1996 Annual Meeting of Shareholders was held on June
7, 1996.
(b) At the Annual Meeting the following Directors were duly
elected for a three-year term ending at the 1999 annual meeting; Lonnie DeCamp
and Gerald Cawdery. The Directors whose terms of office expire in 1997 are Don
Wm. Telford, Gary M. Bolyard, and Larry Carlson. Alfred Cordell, Courtney
Guderian, and William Liddell remain in office until 1998.
(c) At the Annual Meeting the a proposal to approve the merger
between Central Bancorporation and InterWest Bancorp, Inc. pursuant to the
Agreement and Plan of Mergers dated January 10, 1996 was presented to a vote of
Bancorp's stockholders. Of the 1,014,565 shares entitled to vote at the
meeting, 845,932 (83.4 percent) cast their vote in favor of the merger, 99,317
(9.8 percent) cast their votes against the merger, and 2,995 (.3 percent)
abstained. The proposal, which requires an affirmative vote of two thirds of
the shares outstanding, thus was approved.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No reports on Form 8-K were filed during the quarter ended
June 30, 1996.
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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.
CENTRAL BANCORPORATION
(Registrant)
Date July 31, 1996 By /S/ GARY M. BOLYARD
--------------------------- ---------------------------
Gary M. Bolyard
President and Chief Executive Officer
Date July 31, 1996 By /S/ JOSEPH E. RIORDAN
--------------------------- ---------------------------
Joseph E. Riordan
Treasurer and Assistant Secretary
(Principal Financial Officer)
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