EXHIBIT 99.2
UNAUDITED INTERIM FINANCIAL STATEMENTS OF SAFETY FUND
AS OF MARCH 31, 1996
13
THE SAFETY FUND CORPORATION
CONSOLIDATED BALANCE SHEETS
_______________________________________________________________________________
MARCH 31, DECEMBER 31,
1996 1995
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ASSETS
Cash and due from banks $ 11,273,097 $ 13,305,505
Federal funds sold 7,300,000 2,500,000
Investment securities available for sale (amortized cost
of $55,838,968 in 1996 and $62,427,502 in 1995) 56,340,118 63,737,909
Investment securities held to maturity (market value
of $57,853,257 in 1996 and $41,024,069 in 1995) 58,291,919 39,924,078
Loans 155,191,032 160,433,831
Less allowance for possible loan losses (6,977,286) (7,350,150)
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Net loans 148,213,746 153,083,681
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Premises and equipment, net 9,392,499 9,638,596
Accrued interest receivable 2,886,491 2,473,884
Other real estate owned, net 151,809 50,000
Deferred income tax asset, net 2,055,393 1,665,799
Other assets 1,235,134 1,103,800
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Total assets $297,140,206 $287,483,252
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Interest bearing $187,001,375 $184,897,462
Noninterest bearing 65,510,848 67,891,000
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Total deposits 252,512,223 252,788,462
Securities sold under repurchase agreements 18,617,807 11,119,611
Treasury tax and loan notes 3,304,639 1,156,804
Other liabilities 1,243,320 1,031,315
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Total liabilities 275,677,989 266,096,192
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Commitments and contingencies
Stockholders' equity:
Preferred stock, $10 par value;
100,000 shares authorized, none issued
Common stock, $5 par value;
3,200,000 shares authorized
1,660,665 issued and outstanding 8,303,325 8,303,325
Surplus 7,584,846 7,584,846
Retained earnings 5,380,304 4,815,433
Net unrealized gain on investment securities
available for sale 193,742 683,456
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Total stockholders' equity 21,462,217 21,387,060
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Total liabilities and stockholders' equity $297,140,206 $287,483,252
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THE SAFETY FUND CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
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THREE MONTHS ENDED MARCH 31,
1996 1995
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Interest income:
Interest on loans $3,641,350 $3,467,820
Interest and dividends on investment securities:
Available for sale 910,897 840,597
Held to maturity 866,066 794,874
Interest on federal funds sold 43,353 20,385
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Total interest income 5,461,666 5,123,676
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Interest expense:
Interest on deposits 1,798,024 1,554,336
Interest on borrowed funds 168,771 191,092
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Total interest expense 1,966,795 1,745,428
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Net interest income 3,494,871 3,378,248
Provision for possible loan losses 75,000 525,000
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Net interest income after provision for possible loan losses 3,419,871 2,853,248
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Noninterest income:
Trust fees 559,051 519,462
Service fees 294,252 258,383
Gains on loans sold, net 0 709
Gains on sales of investment securities
available for sale, net 0 781
Other 235,126 160,733
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Total noninterest income 1,088,429 940,068
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Noninterest expense:
Salaries and wages 1,451,452 1,474,866
Employee benefits 348,229 339,678
Occupancy, net 266,418 258,405
Equipment 290,001 292,738
Professional fees 195,026 198,059
Marketing 144,972 162,013
Expenses related to proposed merger 324,873 0
Deposit insurance 18,066 141,852
Other real estate owned, net 30,371 17,574
Directors' fees 64,800 61,300
Other 484,221 498,049
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Total noninterest expense 3,618,429 3,444,534
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Income before income taxes 889,871 348,782
Income tax expense 325,000 130,800
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Net income $ 564,871 $ 217,982
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Net income per common share $.34 $.13
Weighted average shares outstanding 1,660,665 1,657,120
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THE SAFETY FUND CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
________________________________________________________________________________
Common Retained
Stock Surplus Earnings Other Total
------------- ------------- ------------- ----------- ------------
Balance December 31, 1995 $8,303,325 $7,584,846 $4,815,433 $ 683,456 $21,387,060
Net income - - 564,871 - 564,871
Reduction in unrealized gain on
investment securities available for
sale, net of income taxes - - - (489,714) (489,714)
------------- ------------- ------------- ------------ ------------
Balance, March 31, 1996 $8,303,325 $7,584,846 $5,380,304 $ 193,742 $21,462,217
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THE SAFETY FUND CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
________________________________________________________________________________
THREE MONTHS ENDED MARCH 31,
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES: 1996 1995
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Net income $ 564,871 $ 217,982
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Proceeds from sale of mortgage loans - 78,009
Origination of mortgage loans held for sale - (77,300)
Repurchase of mortgage loans previously sold - (222,788)
Gains on mortgage loans sold, net - (709)
Depreciation and amortization 289,996 300,312
Gains on sales of investment securities available for sale, net - (781)
Amortization (accretion) of bond premiums and discounts, net 3,720 (50,685)
Provision for possible losses on loans and other real estate owned 75,000 541,333
Increase in accrued interest receivable (412,607) (521,505)
(Increase) decrease in other assets, net (308,143) 218,682
Increase (decrease) in other liabilities 212,005 (94,985)
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Net cash provided by operating activities 424,842 387,565
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CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES:
Proceeds from sales of investment securities available for sale - 6,632,345
Proceeds from maturities of investment securities available for sale 9,000,000 2,000,000
Proceeds from maturities of investment securities held to maturity 5,294,739 179,954
Purchase of investment securities available for sale (2,430,078) -
Purchase of investment securities held to maturity (23,642,739) -
Increase in federal funds sold (4,800,000) (3,200,000)
(Increase) decrease in loans outstanding 4,794,935 (7,316,327)
Purchases of premises and equipment (43,899) (249,535)
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Net cash used by investing activities (11,827,042) (1,953,563)
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CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES:
Increase (decrease) in securities sold under repurchase agreements 7,498,196 (7,418,960)
Increase (decrease) in treasury tax and loan notes 2,147,835 (1,378,013)
Increase (decrease) in deposits (276,239) 9,812,230
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Net cash provided by financing activities 9,369,792 1,015,257
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DECREASE IN CASH AND DUE FROM BANKS (2,032,408) (550,741)
CASH AND DUE FROM BANKS, BEGINNING OF YEAR 13,305,505 15,223,830
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CASH AND DUE FROM BANKS, END OF PERIOD $ 11,273,097 $14,673,089
=============== =============
Supplemental disclosures of cash flow information:
Cash paid during quarter for:
Interest $ 1,914,509 $ 1,628,364
Income taxes 288,000 141,901
Non-cash transactions:
Transfers from loans to other real estate owned 101,809 -
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THE SAFETY FUND CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
1. The financial information furnished herein reflects all adjustments
which, in the opinion of management, are necessary for a fair
presentation of the financial position and results of operations for
interim periods. All such adjustments consist of normal recurring
accruals.
2. Results of operations for the three month period ended March 31, 1996 are
not necessarily indicative of the results to be expected for the entire
year.
3. The accompanying consolidated financial statements should be read in
conjunction with the consolidated financial statements included in the
Form 10-KSB for the year ended December 31, 1995.
4. Financial statements for interim periods, by their very nature, require
estimations which may result in greater imprecision than those associated
with annual audited financial statements.
5. Earnings per share are based upon the weighted average number of shares
outstanding during the period.
6. In accordance with the Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes",
the Company has a net deferred tax asset. Deferred income taxes reflect
the net tax effects of temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes. As of March 31, 1996, the Company
had established a valuation allowance of $424,059 ($499,059 at December
31, 1995).
7. The "net unrealized gain on investment securities available for sale"
included in the stockholders' equity section of the Company's balance
sheet as of March 31, 1996 consists of three components:
Net unrealized gain on investment securities
available for sale, net of deferred income
taxes of $197,954 $ 303,196
Net unrealized loss related to investment
securities transferred during 1994 from the
available for sale portfolio to the held to
maturity portfolio, net of deferred income
taxes of $188,595 (288,861)
Net unrealized gain related to investment
securities transferred during 1995 from the
available for sale portfolio to the held to
maturity portfolio, net of deferred income
taxes of $117,133 179,407
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$ 193,742
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
8. As of March 31, 1996, the Company had commitments to extend credit of
approximately $33 million.
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