Exhibit 99.1
4
FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D.C. 20429
FORM F-4
QUARTERLY REPORT UNDER SECTION 13 OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTER ENDED JUNE 30, 1996
22054-0
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(FDIC Certificate No.)
04-1437380
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(I.R.S. Employer Identification Number)
THE HIBERNIA SAVINGS BANK
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(Exact name of Bank as specified in its Charter)
MASSACHUSETTS
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(State of Incorporation)
731 HANCOCK STREET, QUINCY, MA
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(Address of Principal Office)
02170
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(Zip Code)
(617) 479-2265
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(Bank's Telephone Number, including area code)
Indicate by check mark whether the bank (1) has filed all reports required to
be filed by section 13 of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period the bank was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.
(1) YES X NO
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(2) YES X NO
--- ---
At June 30, 1996 there were 1,662,090 shares of common stock outstanding,
$1.00 par value.
THE HIBERNIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The interim consolidated financial statements of The Hibernia Savings Bank
and Subsidiaries (Kildare Corporation/The Limerick Securities
Corporation/Meath Corporation) presented herein should be read in conjunction
with the consolidated financial statements of The Hibernia Savings Bank for
the year ended December 31, 1995.
Consolidated financial information as of June 30, 1996 and the results of
operations and the changes in stockholders' equity and cash flows for the six
months ended June 30, 1996 and 1995 are unaudited, and in the opinion of
management reflect all adjustments (consisting solely of normal recurring
accruals) necessary for a fair presentation of such information. Interim
results are not necessarily indicative of results to be expected for the
entire year.
2) COMMITMENTS
At June 30, 1996 the Bank had outstanding commitments to originate loans
amounting to approximately $27,136,323 which are not reflected in the
consolidated balance sheet.
3) EARNINGS PER SHARE
The earnings per share computations for the quarter ended June 30, 1996 are
based on 1,625,097 shares outstanding, and for the quarter ended June 30,
1995 are based on 1,544,553 shares outstanding.
Material Changes in Financial Conditions
Management's discussion and analysis of the financial conditions and results
of operations for the three month period ended June 30, 1996 with the
appropriate comparisons to the same period in 1995 are as follows:
The Bank's total assets increased to $372,977,832 at June 30, 1996 or 15.1%
on an annualized basis from total assets of $346,865,213 at December 31, 1995
and increased 22.4% from total assets of $304,623,982 at June 30, 1995.
Short term investments, investment securities and securities held for sale
totaled $131,164,631 or 35.2% of total assets at June 30, 1996 an increase of
$5,864,361 from $125,300,270 or 36.1% of total assets at December 31, 1995
and an increase of $31,603,408 from $99,561,223 or 32.7% of total assets at
June 30, 1995. Loans, net increased $17,893,877 or 17.2% on an annualized
basis to $226,220,600 or 60.6% of total assets at June 30, 1996 from
$208,326,723 or 60.1% of total assets at December 31, 1995 and increased
$32,727,793 from $193,492,807 or 63.5% of total assets at June 30, 1995. The
Bank's nonperforming loans totaled $754,995 or .2% of total assets at June
30, 1996 as compared to $930,766 or .3% of total assets at December 31, 1995
and $659,987 or .2% of total assets at June 30, 1995. The Bank's loan loss
provision for the second quarter ended June 30, 1996 was $66,333 as compared
to $100,000 for the second quarter of 1995. The Bank's charge-offs net of
recoveries for the quarter ended June 30, 1996 were $ 125,250 compared to
($18,763) during the second quarter of 1995. The allowance for loan losses
totaled $2,154,372 at June 30, 1996 as compared to $2,541,997 at December 31,
1995 and $2,316,943 at June 30, 1995. The allowance for loan losses
represented 285.3%, 366.2% and 251.1% of nonperforming loans at June 30,
1996, December 31, 1995 and June 30, 1995 respectively.
Deposits at June 30, 1996 totaled $293,865,423 as compared to $282,787,249 at
December 31, 1995 an increase of $11,078,174 or 7.8% on an annualized basis,
and increased $33,810,498 or
13.0% from deposits of $260,054,926 at June 30, 1995. Federal Home Loan Bank
advances increased $13,759,000 to $52,727,000 at June 30, 1996 from
$38,968,000 at December 31, 1995, and increased $31,255,000 from $21,472,000
at June 30, 1995.
Stockholders Equity increased to $24,781,793 at June 30, 1996 from
$22,824,616 at December 31, 1995 and $21,616,275 at June 30, 1995. The
increase in the second quarter reflects earnings of $700,583 and the
issuance of 106,222 additional shares of stock, of which 100,000 shares were
issued through a private placement raising net of expenses $1,401,500 of
incremental new capital, and was decreased by the payment of a $.07 dividend
on shares outstanding of $108,930.
Material Changes in Results of Operations
Net Income for the second quarter ended June 30, 1996 was $700,583 or $.43
per share as compared to net income in the second quarter ended June 30, 1995
of $812,664 or $.53 per share.
Interest and dividend income increased 18.9% in the second quarter of 1996 to
$6,871,065 from $5,780,344 for the second quarter of 1995. The increase
reflects our growth in earning assets which increased $64,921,003 or 22.0% at
June 30, 1996 from June 30, 1995, and a slight decrease in the yield on
average earning assets to 7.93% at June 30, 1996 from 7.94% at June 30, 1995.
Interest expense increased $614,235 or 18.2% to $3,990,378 from $3,376,143
for the second quarter ended June 30, 1996. This increase reflects the
increased overall cost of funds to 5.04% at June 30, 1996 from 4.58% at June
30, 1995, in conjunction with an increase in average total deposits by
$26,741,000 at an increased cost of 45 basis points, an increase in average
borrowings by $26,731,000 at a decreased cost of 91 basis points.
Other income for the quarter ended June 30, 1996 totaled $156,833 compared to
$734,169 for the same quarter in 1995. The components of other income for
the second quarter ended June 30, 1996 were net security losses of $921, gain
on the sale of loans of $159, REO income of $10,450 and service charges of
$147,145, as compared to gain on the sale of servicing rights of $763,806,
net security losses of $13,750, net losses on the sale of real estate of
$119,965, REO income of $38,431 and service charges of $120,838 for the same
period in 1995.
Operating expenses totaled $1,839,082 for the second quarter ended June 30,
1996 as compared to $1,739,485 for the same period in 1995, an increase of
$99,597 or 5.7%. This increase reflects the increased personnel costs of
$177,896 required by the opening of three new branch locations. These
branches were opened in July 1995, December 1995 and May 1996. Occupancy
costs also increased $93,025 reflecting the three new branches. These
increases were partially offset by the reduction of, OREO expenses of $45,311
and FDIC deposit assessment of $159,000.
Income Tax
Provision for income taxes for the quarter ended June 30, 1996 was $431,522
as compared to $486,221 for the same period in 1995.
THE HIBERNIA SAVINGS BANK
CONSOLIDATED BALANCE SHEET
JUNE 30, 1996
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JUNE 30, 1996 DECEMBER 31, 1995
(UNAUDITED) (AUDITED)
----------------------------------------------------
ASSETS:
Total cash and due from banks $4,316,108 $3,213,259
Short term investments 100,000 4,860,000
Investment securities 92,917,721 77,565,687
Securities held for sale 38,146,910 42,874,583
Loans, net 226,220,600 208,326,723
Banking premises & equipment, net 6,781,707 5,574,956
Accrued interest receivable 2,578,753 2,128,536
Other real estate owned 70,000 430,000
Other assets 1,846,033 1,891,469
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Total assets $372,977,832 $346,865,213
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LIABILITIES & STOCKHOLDERS' EQUITY
Deposits:
Now & demand deposits $24,668,994 $22,011,361
Money market accounts 36,217,529 33,819,928
Other deposits 45,308,813 46,038,261
Term certificates accounts 187,670,087 180,917,699
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Total deposits 293,865,423 282,787,249
Federal Home Loan Bank advances 52,727,000 38,968,000
Other borrowings 0 0
Mortgagors' escrow payments 1,018,365 1,094,397
Income taxes payable (309,708) 364,444
Other liabilities 894,959 826,507
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Total liabilities 348,196,039 324,040,597
Commitments and contingencies
STOCKHOLDERS' EQUITY
Serial preferred stock, $1.00 par value 1,000,000
shares authorized: none issued 0 0
Common stock, $1.00 par value, 5,000,000 shares
authorized 1,662,090 and 1,532,431 shares
issued and outstanding 1,662,090 1,532,431
Additional paid-in-capital 10,534,989 8,824,970
Undivided profits 13,011,117 12,406,361
Net unrealized loss on marketable equity securities (426,402) 60,854
Other Reserve 0 0
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Total stockholders' equity 24,781,793 22,824,616
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Total Liabilities & Stockholders' Equity $372,977,832 $346,865,213
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The Hibernia Savings Bank and Subsidiaries
Consolidated Statement of Income
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Three months ended Six months ended
June 30 June 30 June 30 June 30
1996 1995 1996 1995
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INTEREST & DIVIDEND INCOME
Interest on loans $4,901,007 $4,266,819 $9,746,058 $8,095,116
Income & dividends on investment securities 1,951,116 1,346,967 3,864,371 2,861,622
Interest on short - term investments 18,942 166,558 54,773 235,007
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Total interest & dividend income 6,871,065 5,780,344 13,665,202 11,191,745
INTEREST EXPENSE
Interest on deposits 3,384,405 3,111,223 6,763,900 5,835,555
Interest on borrowed funds 605,973 264,920 1,176,350 433,144
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Total interest & dividend expense 3,990,378 3,376,143 7,940,250 6,268,699
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Net interest income 2,880,687 2,404,201 5,724,952 4,923,046
Provision for possible loan losses 66,333 100,000 1,086,333 251,666
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Net interest income after loan loss provision 2,814,354 2,304,201 4,638,619 4,671,380
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OTHER INCOME
Gains (losses) securities sales (921) (13,750) 53,280 119,262
Gains (losses) real estate sale 0 (119,965) (12,948) (130,070)
Gains (losses) on loan sales net 159 (55,192) 10,201 (55,192)
Gains (losses) on sale of fixed assets 0 0 0 4,748
Gains (losses) on sale of loan servcing 0 763,806 0 763,806
Miscellaneous 157,595 159,270 334,398 312,574
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Total other income 156,833 734,169 384,931 1,015,128
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OPERATING EXPENSES
Salaries & employee benefits 1,017,189 839,293 2,006,870 1,645,179
Net occupancy & Equipment 329,236 236,211 648,203 471,675
OREO Expenses 21,609 66,920 48,320 147,104
Other Operating expenses 471,049 597,061 988,915 1,144,129
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Total operating expenses 1,839,082 1,739,485 3,692,308 3,408,087
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Income (loss) before income taxes 1,132,105 1,298,885 1,331,242 2,278,421
Provision (benefit) for income tax 431,522 486,221 509,185 828,035
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Net income (loss) $700,583 $812,664 $822,057 $1,450,386
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Per common share
Net income
Primary $0.43 $0.53 $0.51 $0.95
Fully diluted $0.43 $0.53 $0.51 $0.95
Average number of common shares
Primary 1,625,097 1,542,608 1,598,454 1,532,369
Fully diluted 1,625,097 1,544,553 1,598,454 1,533,342
THE HIBERNIA SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Six months ended June 30, 1996
(Unaudited in thousands)
NET UNREALIZED
ADDITIONAL LOSS ON
COMMON PAID-IN UNDIVIDED MARKETABLE
STOCK CAPITAL PROFITS EQUITY SECURITIES TOTAL
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Balance at December 31, 1995 $1,532,431 $8,824,970 $12,406,361 $60,854 $22,824,616
Net income 121,474 121,474
Issuance of additional stock 23,437 323,480 346,917
Increase in net unrealized loss
on securities held for sale (76,244) (76,244)
Cash dividend paid (108,371) (108,371)
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Balance at March 31, 1996 $1,555,868 $9,148,450 $12,419,464 ($15,390) $23,108,392
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Net income 700,583 700,583
Issuance of additional stock 106,222 1,386,538 1,492,760
Increase in net unrealized loss
on securities held for sale (411,012) (411,012)
Cash dividend paid (108,930) (108,930)
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Balance at June 30, 1996 $1,662,090 $10,534,988 $13,011,117 ($426,402) $24,781,793
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THE HIBERNIA SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Six months ended June 30, 1995
(Unaudited in thousands)
NET UNREALIZED
ADDITIONAL LOSS ON
COMMON PAID-IN UNDIVIDED MARKETABLE
STOCK CAPITAL PROFITS EQUITY SECURITIES TOTAL
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Balance at December 31, 1994 $964,491 $8,804,519 $10,022,386 ($5,299) $19,786,097
Net income 637,722 637,722
3 for 2 stock split 499,147 (499,147)
Issuance of additional stock 59,886 408,270 468,156
Increase in net unrealized loss
on securities held for sale 5,299 5,299
Cash dividend paid (75,375) (75,375)
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Balance at March 31, 1995 $1,523,524 $8,713,642 $10,584,733 $0 $20,821,899
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Net income 812,664 812,664
Issuance of additional stock 6,405 73,603 80,008
Increase in net unrealized loss
on securities held for sale (22,095) (22,095)
Cash dividend paid (76,201) (76,201)
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Balance at June 30, 1995 $1,529,929 $8,787,245 $11,321,196 ($22,095) $21,616,275
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THE HIBERNIA SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30,
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1996 1995
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Cash flows from operating activities
Net Income $822,057 $1,450,386
Adjustments to reconcile net income to net cash provided by operating
activities
Depreciation 318,799 251,075
Amortization of bond premium 184,730 270,696
Loan loss provision 1,086,333 251,666
(Gain) on sale of loans, real estate owned,
securities, fixed assets (net) (50,533) (702,554)
Deferred loan fees 43,055 (264,967)
Loans sold 3,031,448 6,440,197
Loans originated for sale (3,021,247 (4,367,075)
Increase (decrease) in accrued expenses, income taxes, and
other liabilities (1,092,955) (221,200)
(Increase) decrease in accrued interest receivable (450,217) (127,829)
(Increase) decrease in other assets 841,753 336,375
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Total adjustments 891,166 1,866,384
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Net cash provided by operating activities 1,713,223 3,316,770
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Cash flows from investing activities
Loans purchased (3,737,891) (19,291,184)
Loans paid (net) (15,432,485) (13,454,033)
Proceeds of Oreo Sales 494,163 666,000
Short-term investments (net) 4,760,000 3,490,000
Purchases of investment securities (21,961,856)
Proceeds from sales and maturities of investment securities 6,373,657 5,233,927
Purchase of securities held for sale (10,480,818) (2,642,200)
Proceeds of securities held for sale 14,516,888 5,776,043
Purchases of premises and equipment (1,525,550) (570,137)
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Net cash used by investing activities (26,993,892) (20,791,584)
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Cash flows from financing activities
Deposits, net 11,002,141 3,837,198
FHL Bank Advances (net) 13,759,000 (528,000)
Other borrowings (net) 0 13,000,000
Proceeds from sale of Common Stock 1,839,677 548,164
Dividends Paid (217,301) (151,576)
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Net cash provided by financing activities 26,383,517 16,705,786
Net increase (decrease) in cash 1,102,849 (769,028)
Cash and cash equivalents--beginning of year 3,213,259 3,780,957
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Cash and cash equivalents--end of year $4,316,108 $3,011,929
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Supplemental disclosures of cash flow information:
Interest paid $7,475 $6,248
Federal income taxes paid $385 $400
SIGNATURES
Under the requirements of the Securities Exchange Act of 1934, the Bank has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
THE HIBERNIA SAVINGS BANK
Date ____________________, 1996 ______________________________
Chairman of the Board,
and Chief Executive Officer
Date ____________________, 1996 ______________________________
Senior Vice President and
Chief Financial Officer