Exhibit 28.2
CITIZENS SAVINGS BANK, SSB, INC.
AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
September 30, September 30,
1993 1992
------------- -------------
(Unaudited) (Note)
ASSESTS
Cash:
Interest-Bearing $ 12,563,940 $ 10,088,763
Noninterest-Bearing 3,983,767 2,954,696
Certificates of Deposit 4,267,000 5,852,000
Investment Securities 20,522,247 15,957,211
Mortgage-Backed Securities 3,308,055 10,708,041
Loans Held For Sale 8,580,255 19,616,340
Loans Receivable, Net 198,951,138 200,277,506
Office Properties And Equipment, Net 4,713,765 5,193,243
Real Estate Owned, Net 810,631 826,175
Accrued Interest On Cash And Investment Securities 264,788 160,215
Accrued Interest On Mortgage-Backed Securities
And Loans Receivable 1,248,890 1,476,561
Cost In Excess Of Fair Value Of Net Assets
Acquired, Net 1,662,760 1,962,760
Prepaid And Other Assets 1,002,265 753,594
------------- -------------
$ 261,879,501 $ 275,827,105
============= =============
LIABILTIES AND STOCKHOLDERS' EQUITY
Liabilities:
Savings Deposits $ 223,547,424 $ 235,258,900
Advance Payments By Borrowers For Taxes
And Insurance 514,522 1,437,074
Accounts Payable And Other Liabilities 750,616 760,703
Income Taxes Payable 69,048 201,123
Advances From The Federal Home Loan Bank 15,000,000 18,000,000
------------- -------------
$ 239,881,610 $ 255,657,800
============= =============
Stockholders' Equity:
Preferred Stock $ - $ -
Common Stock 1,245,043 1,212,413
Additional Paid-In Capital 5,335,694 5,038,717
Retained Earnings, Substantially Restricted 15,417,154 13,918,175
------------- -------------
Total Stockholders' Equity $ 21,997,891 $ 20,169,305
------------- -------------
$ 261,879,501 $ 275,827,105
============= =============
Note: The Consolidated Condensed Statement of Financial
Condition at September 30, 1992 has been
taken from the audited financial statements at that date.
See Notes to Consolidated Condensed Financial Statements.
CITIZENS SAVINGS BANK, SSB, INC.
AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
THREE MONTHS ENDED YEAR ENDED
SEPTMEBER 30, SEPTEMBER 30,
---------------------------- ----------------------------
1993 1992 1993 1992
---------------------------- ----------------------------
(Unaudited) (Unaudited)
Interest income:
Loans $ 4,807,879 $ 5,250,687 $ 19,818,657 $ 22,012,231
Mortgage-backed securities 64,519 181,528 448,948 700,857
Investment securities 272,208 237,658 1,013,673 1,023,044
Other short-term investments
and interest-bearing deposits 136,094 165,623 570,882 738,368
------------ ----------- ------------ ------------
$ 5,280,700 $ 5,835,496 $ 21,852,160 $ 24,474,500
------------ ------------ ------------ ------------
Interest expense:
Savings deposits $ 2,072,869 $ 2,774,823 $ 8,992,603 $ 12,767,867
Advances from Federal Home Loan Bank 253,359 311,763 1,169,137 985,253
------------ ------------ ------------ ------------
$ 2,326,228 $ 3,086,586 $ 10,161,740 $ 13,753,120
------------ ------------ ------------ ------------
Net interest income $ 2,954,472 $ 2,748,910 $ 11,690,420 $ 10,721,380
Provison for loan losses 352,500 35,242 708,730 190,492
------------ ------------ ------------ ------------
Net interest income after
provision for loan losses $ 2,601,972 $ 2,713,668 $ 10,981,690 $ 10,530,888
------------ ------------ ------------ ------------
Other income:
Service charges on loans $ 58,529 $ 53,294 230,703 188,166
Gains on sale of interest-earning
assests, net 36,971 0 400,262 529,598
Other 319,623 345,782 1,252,168 1,335,473
------------ ------------ ------------ ------------
$ 415,123 $ 399,076 $ 1,883,133 $ 2,053,237
------------ ------------ ------------ ------------
Other expenses:
Compensation and employee benefits $ 918,235 $ 986,195 $ 3,225,404 $ 3,360,461
Net occupancy 166,432 137,795 838,683 828,602
Federal insurance premiums 129,674 134,218 484,848 542,687
Computer service 83,259 81,950 348,865 347,108
Amortization of cost in excess of
fair value of net assets acquired 75,000 75,000 300,000 300,000
Real estate owned expense
(income), net 12,626 18,993 51,468 23,772
Other 250,007 299,655 1,241,563 1,248,716
------------ ------------ ------------ ------------
$ 1,635,233 $ 1,733,806 $ 6,490,831 $ 6,651,346
------------ ------------ ------------ ------------
Income before income taxes $ 1,381,862 $ 1,378,938 $ 6,373,992 $ 5,932,779
Income taxes 649,441 530,507 2,670,052 2,287,433
------------ ------------ ------------ ------------
Net income $ 732,421 $ 848,431 $ 3,703,940 $ 3,645,346
============ ============ ============ ============
Average number of common
shares outstanding 1,229,043 1,212,413 1,219,384 1,210,406
============ ============ ============ ============
Net income per share of common stock $0.60 $0.70 $3.04 $3.01
============ ============ ============ ============
Dividends declared per share $0.50 $0.00 $1.80 $0.55
============ ============ ============ ============
See Notes to Consolidated Condensed Financial Statements.
CITIZENS SAVINGS BANK, SSB, INC.
AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
ADDITIONAL TOTAL
COMMON PAID-IN RETAINED STOCKHOLDERS'
STOCK CAPITAL EARNINGS EQUITY
------------ ----------- ------------ ------------
(Unaudited)
Year Ended September 30, 1993
- ------------------------------
Balance at September 30, 1992 $ 1,212,413 $ 5,038,717 $ 13,918,175 $ 20,169,305
Issuance of 1,880 shares under
option at $6.43 per share 1,880 10,202 - 12,082
Issuance of 12,400 shares under
option at $9.50 per share 12,400 105,400 - 117,800
Issuance of 4,250 shares under
option at $10.50 per share 4,250 40,375 - 44,625
Issuance of 14,100 shares under
option at $11.00 per share 14,100 141,000 - 155,100
Cash dividends ($1.80 per share) - - (2,204,961) (2,204,961)
Net income - - 3,703,940 3,703,940
------------ ----------- ------------ ------------
Balance at September 30, 1993 $ 1,245,043 $ 5,335,694 $ 15,417,154 $ 21,997,891
============ =========== ============ ============
Year Ended September 30, 1992
- ------------------------------
Balance at September 30, 1991 $ 1,207,552 $ 5,022,661 $ 10,938,441 $ 17,168,654
Issuance of 2,541 shares under
option at $2.36 per share 2,541 3,459 - 6,000
Issuance of 2,320 shares under
option at $6.43 per share 2,320 12,597 - 14,917
Cash dividends ($.55 per share) - - (665,612) (665,612)
Net income - - 3,645,346 3,645,346
------------ ----------- ------------ ------------
Balance at September 30, 1992 $ 1,212,413 $ 5,038,717 $ 13,918,175 $ 20,169,305
============ =========== ============ ============
See Notes to Consolidated Condensed Financial Statements
CITIZENS SAVINGS BANK, SSB, INC.
AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
YEAR ENDED SEPTEMBER 30,
----------------------------
1993 1992
------------ ------------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,703,940 $ 3,645,346
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 708,730 190,492
Provision for loss on real estate owned 39,000 75,000
Amortization (accretion) of premiums (discounts)
on mortgage-backed securities 99,829 30,656
Amortization (accretion) of premiums (discounts)
on investment securities 62,795 (25,806)
Accretion of discount on loans (2,857) (4,590)
Gain on sale of loans (363,291) (287,972)
Net gain on sale of mortgage-backed securities (36,971) (241,626)
FHLB stock dividend (130,300) (145,600)
Gain on sale of real estate owned (21,497) (96,863)
Provision for depreciation 538,390 502,756
Amortization of deferred loan fees (838,145) (578,101)
Amortization of goodwill 300,000 300,000
(Gain) loss on sale of office properties
and equipment (10,033) -
Changes in operation assets and liabilities:
Decrease in interest receivable 123,098 211,681
Decrease in interest payable (106,486) (298,777)
(Increase) in prepaid and other assets (245,668) (188,490)
Increase (decrease) in accounts payable (142,162) 13,099
------------ ------------
Net cash provided by operating activities $ 3,678,372 $ 3,101,205
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in certificates of deposits $ 1,585,000 $ 3,653,338
Proceeds from maturities of investment securities 5,900,000 5,520,000
Purchases of investment securities (10,397,531) (6,969,396)
Purchases of mortgage-backed securities - (11,234,996)
Proceeds from sale of mortgage-backed securities 2,923,437 10,778,525
Proceeds from sale of loans 11,240,252 9,265,776
Originations and principal payments on loans
receivable, net 1,492,476 (11,203,052)
Principal collected on mortgage-backed securities 4,413,691 1,531,963
Proceeds from sale of real estate owned 248,142 370,321
(Investment) reduction in foreclosed real estate (127,816) 17,407
Proceeds from sale of office properties and equipment 80,000 -
Purchase of office properties and equipment (128,879) (309,662)
------------ ------------
Net cash provided by investing activities $ 17,228,772 $ 1,420,224
------------ ------------
CITIZENS SAVINGS BANK, SSB, INC.
AND SUBSIDARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
YEAR ENDED SEPTEMBER 30,
-----------------------------
1993 1992
------------- ------------
(Unaudited)
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in deposits $ (11,604,990) $ (9,758,500)
(Increase) decrease in advance payments by
borrowers for taxes and insurance (922,552) 55,723
Proceeds from FHLB advances - 14,000,000
Payments of FHLB advances (3,000,000) (6,500,000)
Cash dividends (2,204,961) (665,612)
Options exercised 329,607 20,917
------------- ------------
Net cash used in financing activities $ (17,402,896) $ (2,847,472)
------------- ------------
Net increase (decrease) in cash and
cash equivalents $ 3,504,248 $ 1,673,957
Cash and cash equivalents:
Beginning 13,043,459 11,369,502
------------- ------------
Ending $ 16,547,707 $ 13,043,459
============= ============
SUPPLEMENTAL SCHEDULE OF CASH AND CASH EQUIVALENTS
Cash:
Interest-bearing deposits $ 12,563,940 $ 10,088,763
Noninterest bearing 3,983,767 2,954,696
------------- ------------
Cash and cash equivalents, ending $ 16,547,707 $ 13,043,459
============= ============
SUPPLEMENTAL DISCLOSURES
Cash payments for:
Interest $ 10,161,897 $ 14,051,897
============= ============
Income taxes, net $ 2,802,127 $ 2,460,065
============= ============
Transfers from loans receivable to real estate
acquired in settlement of loans $ 156,288 $ 318,560
============= ============
Loans originated to finance the sale of real
estate acquired in settlement of loans $ 31,000 $ 105,000
============= ============
See Notes to Consolidated Condensed Financial Statements
CITIZENS SAVINGS BANK, SSB, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (all which were
normal recurring accruals) necessary for a fair presentation.
2. Advances From Federal Home Loan Bank
Advances from the Federal Home Loan Bank consist of the following:
Maturity
Year Ending
September 30, Interest September 30, 1993 September 30, 1992
------------- -------- ------------------ ------------------
1993 8.40%-8.75% $ - $ 1,000,000
1994 5.30%-8.30% 4,000,000 6,000,000
1995 6.05%-7.68% 2,500,000 2,500,000
1996 6.50%-8.00% 3,000,000 3,000,000
1997 6.85%-7.04% 2,500,000 2,500,000
Thereafer 7.33% 3,000,000 3,000,000
------------- ------------
$ 15,000,000 $ 18,000,000
============= ============
Citizens Savings has pledged, in addition to all of its stock in the Federal
Home Loan Bank, real estate loans of approximately $23,120,000 as collateral
for such borrowings.
3. Capital Requirements
On August 9, 1989, the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 ("FIRREA") was signed into law. This legislation,
among other things, strengthened the deposit insurance for savings
institutions' customers by creating a new fund called the Savings
Association Insurance Fund ("SAIF"). SAIF is backed by the full faith and
credit of the U.S. Government and administered by the Federal Deposit
Insurance Corporation ("FDIC"), FIRREA significantly restructured the
regulation of thrift institutions, increased the capital requirements
applicable to thrift institutions and contained other revisions that may
materially impact the future operations of thrift institutions.
Prior to its conversion to a North Carolina-chartered savings bank on
October 1, 1992, Citizens Savings was subject to capital requirements of the
Office of Thrift Supervision (OTS). Upon its conversion to a state savings
bank, Citizens Savings ceased to be subject to the OTS capital requirements
and became subject to the capital requirements of the FDIC and the North
Carolina Administrator. The FDIC requires Citizens Savings to have a
minimum leverage ratio of Tier I capital (principally consisting of common
shareholders equity, noncumulative perpetual preferred stock and a limited
amount of cumulative perpetual preferred stock, less certain goodwill
items) to adjusted assets (adjusted for goodwill and any other items
deducted from capital to arrive at
Tier I capital) of at least 3%; provided, however that all institutions,
other than those (i) receiving the hightest rating during the examination
process and (ii) not anticipating or experiencing any significant growth, are
required to maintain a ratio of 1% or 2% above the stated minimum, with an
absolute minimum leverage ratio of not less than 4%. The FDIC also requires
Citizens Savings to have a ratio of Tier II capital (primarily Tier I capital
plus general loss reserves) to risk-weighted assets of least 8%. The NC
Administrator requires a net worth equal to at least 5% of total assets.
At September 30, 1993, Citizens Savings had Tier I capital as a percentage
of adjusted assets of 7.8%, Tier II capital as a percentage of risk-weighted
assets of 15.3% and total capital as a percentage of total assets of 8.4%.
Pursuant to Section 7 of the Federal Deposit Insurance Act, as amended by
Section 302 of the Federal Deposit Insurance Corporation Improvement Act of
1991 (FIDICA), the FDIC has implemented the Risk-Related Premium System
(RRPS) beginning with the assessment period starting January 1, 1993. In the
RRPS, the FDIC has placed institutions into RRPS capital groups and
supervisory subgroups. Assignment to one of three capital groups, coupled
with assignment to one of three supervisory subgroups, will determine which
of the nine risk classifications is appropriate for an institution. Risk
classifications of institutions, in turn, determine the appropriate premium
rate, ranging from .23% to .31% of domestic deposits. Citizens Savings has
been notified by the FDIC that it will be assessed its insurance premium at a
rate of .23%.
4. Pending Change of Ownership of Citizens Savings Bank
On January 19, 1993 Citizens Savings and BB&T Financial Corporation ("BB&T"),
a registered North Carolina bank holding company headquarted in Wilson, North
Carolina, entered into an Agreement and Plan of Reorganization and related
Plan of Share Exchange for Aquisition of Shares of Citizens Savings Bank,
SSB, Inc. by BB&T Financial Corporation (the "Agreements") which provided
for the acquisition of Citizens Savings by BB&T through an exchange of all
of the issued and outstanding stock of Citizens for common stock of BB&T (the
"Acquisition").
The Acquisition was completed on October 25, 1993. Shareholders of Citizens
Savings received .9389 shares of BB&T Financial Corporation common stock for
each outstanding share of Citizens Savings common stock. All assets and
liabilities at the merger date became the responsibility of BB&T as of
October 26, 1993.