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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - Q
/x/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the three months ended March 31, 1996
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
SEC Commission File No : 0-22578
FIRST PATRIOT BANKSHARES CORPORATION
------------------------------------
(Exact name of registrant as specified in its charter)
State of Virginia 54-1514125
- - ------------------------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2071 Chain Bridge Road, Vienna, Virginia 22182
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code : (703) 471-0900
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 .
--- ---
Common stock, $2.50 par value per share Outstanding at April 30, 1996
- - --------------------------------------- -----------------------------
(Title of Class) 2,018,924 shares
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FIRST PATRIOT BANKSHARES CORPORATION
FORM 10-Q
INDEX
PART I FINANCIAL INFORMATION PAGE
- - ------ --------------------- ----
Item 1. Condensed Financial Statements (unaudited)
Consolidated Balance Sheets
March 31, 1996 and December 31, 1995........................................... 3
Consolidated Statements of Operations
Three months ended March 31, 1996 and 1995.................................... 4
Consolidated Statements of Stockholders' Equity
Three months ended March 31, 1996 and 1995..................................... 5
Consolidated Statements of Cash Flows
Three months ended March 31, 1996 and 1995..................................... 6
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K
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FIRST PATRIOT BANKSHARES CORPORATION
CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
(dollars in thousands) 1996* 1995
- - ----------------------------------------------------------------------------------------------------------------
ASSETS
Earning assets
Loans $99,237 $93,759
Loans held for sale 10,294 12,917
Allowance for loan losses (1,459) (1,332)
- - ----------------------------------------------------------------------------------------------------------------
Loans, net of allowance for loan losses 108,072 105,344
Investments available for sale at fair value 34,782 28,665
Federal funds sold 2,562 10,219
- - ----------------------------------------------------------------------------------------------------------------
Total earning assets, net of allowance for loan losses 145,416 144,228
Cash and due from banks 7,891 7,879
Premises and equipment, net 5,334 4,894
Other assets 2,253 1,790
- - ----------------------------------------------------------------------------------------------------------------
Total assets $160,894 $158,791
================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Non-interest bearing deposits $26,610 $28,555
Interest bearing deposits 98,740 91,704
- - ----------------------------------------------------------------------------------------------------------------
Total deposits 125,350 120,259
Other borrowings 21,366 23,915
Accrued expenses and other liabilities 1,273 1,879
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Total liabilities 147,989 146,053
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STOCKHOLDERS' EQUITY
Total stockholders' equity 12,905 12,738
- - ----------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $160,894 $158,791
================================================================================================================
See accompanying notes to consolidated financial statements.
* Unaudited
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FIRST PATRIOT BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
-------------------------------------
(dollars in thousands) 1996 1995
- - ------------------------------------------------------------------------------------------------------------------
INTEREST INCOME
Interest and fees on loans $2,790 $1,996
Interest on investments 468 237
Interest on federal funds sold 162 81
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Total interest income 3,420 2,314
INTEREST EXPENSE
Interest on deposits 1,125 693
Interest on other borrowings 237 133
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Total interest expense 1,362 826
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Net interest income 2,058 1,488
Provision for loan losses 127 38
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Net interest income after provision for loan losses 1,931 1,450
NON-INTEREST INCOME
Service charges on deposit accounts 138 102
Other income 385 245
Gain on sale of loans and investments, net (8) 40
- - ------------------------------------------------------------------------------------------------------------------
Total non-interest income 515 387
NON-INTEREST EXPENSE
Salaries and benefits 914 728
Occupancy and equipment 164 211
Other operating expense 726 475
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Total non-interest expense 1,804 1,414
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Income before income tax 642 423
Income tax expense 251 132
- - ------------------------------------------------------------------------------------------------------------------
Net income $391 $291
==================================================================================================================
Earnings per share (note 2):
Earnings per common share and common equivalent share $0.17 $0.14
==================================================================================================================
Earnings per common share-assuming full dilution $0.17 $0.14
==================================================================================================================
See accompanying notes to consolidated financial statements.
Weighted Average Shares Outstanding-Primary 2,241,837
Weighted Average Shares Outstanding-Fully Diluted 2,241,837
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FIRST PATRIOT BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
UNREALIZED GAIN (LOSS)
ON AVAILABLE FOR
ADDITIONAL SALE INVESTMENTS ACCUMULATED TOTAL
COMMON PAID-IN NET OF DEFERRED (DEFICIT) STOCKHOLDERS'
(dollars in thousands) STOCK CAPITAL TAXES SURPLUS EQUITY
- - -----------------------------------------------------------------------------------------------------------------------------------
Balance, January 1, 1995 $4,924 $5,039 ($244) $1,113 $10,832
Cash dividends paid -- -- -- (39) ($39)
Unrealized gain on available for sale investments,
net of deferred taxes -- -- 107 -- 107
Net income -- -- -- 291 291
- - -----------------------------------------------------------------------------------------------------------------------------------
BALANCE, MARCH 31, 1995 $4,924 $5,039 ($137) $1,365 $11,191
===================================================================================================================================
Balance, January 1, 1996 $5,013 $5,155 $110 $2,460 $12,738
Net proceeds from the issuance of common stock $33 $94 -- -- $127
Cash dividends paid -- -- -- (61) ($61)
Unrealized gain on available for sale investments,
net of deferred taxes -- -- (290) -- (290)
Net income -- -- -- 391 391
- - -----------------------------------------------------------------------------------------------------------------------------------
BALANCE, MARCH 31, 1996 $5,046 $5,249 ($180) $2,790 $12,905
===================================================================================================================================
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FIRST PATRIOT BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31
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(dollars in thousands) 1996 1995
- - -------------------------------------------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES
NET INCOME $391 $291
ADJUSTMENTS FOR NONCASH ITEMS INCLUDED IN NET INCOME:
Depreciation and amortization 150 98
Provision for loan losses 127 38
(Gain)/Loss on sale of loans 8 (40)
Increase in other assets (394) (238)
Increase (decrease) in accrued expenses and other liabilities (549) 261
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Net cash provided by operating activities (267) 410
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CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase in banking subsidiary loans (6,065) (3,509)
Proceeds from sale of loans 3,244 733
Purchase of investments (16,067) (532)
Proceeds from maturity of investments 9,511 510
Acquisition of premises and equipment (609) (471)
- - -------------------------------------------------------------------------------------------------------------------
Net cash flow used by investing activities (9,986) (3,269)
- - -------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in demand deposits (1,945) (2,131)
Net increase in NOW and savings accounts 3,697 242
Net increase in money market accounts 425 2,583
Net increase in time deposits 2,914 2,457
Net increase (decrease) in other borrowings (2,546) 2,325
Net decrease in notes payable (3) --
Net increase in capital from new stock issues 127 --
Cash dividends paid (61) (39)
- - -------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 2,608 5,437
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Net increase (decrease) in cash and cash equivalents (7,645) 2,578
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 18,098 9,986
- - -------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $10,453 $12,564
===================================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
INTEREST PAID TO DEPOSITORS $1,423 $830
INTEREST ON SHORT-TERM BORROWINGS 259 118
UNREALIZED LOSS ON AVAILABLE FOR SALE INVESTMENTS (272) (208)
INCOME TAXES PAID 475 --
===================================================================================================================
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FIRST PATRIOT BANKSHARES CORPORATION
Notes to Consolidated Financial Statements
(unaudited)
The accompanying unaudited consolidated financial statements, which
include the accounts of First Patriot Bankshares Corporation, (the "Company")
and its wholly-owned subsidiary, Patriot National Bank, (the "Bank") have been
prepared in accordance with the instructions to Form 10-Q and do not include
all of the disclosures required by generally accepted accounting principles.
All adjustments have been made, which, in the opinion of management, are
necessary for a fair presentation of the results for the interim periods
presented. Such adjustments are all of a normal and recurring nature. The
results of operations for the three months ended March 31, 1996 are not
necessarily indicative of the results that may be expected for the entire year
ending December 31, 1996.
NOTE 1 - ACCOUNTING POLICIES AND OTHER DATA
Reference should be made to the Notes to Consolidated Financial
Statements included in the Annual Report to Stockholders on Form 10-K for the
year ended December 31, 1995 which contain the Company's accounting policies
and other data.
NOTE 2 - COMMON STOCK AND EARNINGS PER SHARE
Common stock issued and outstanding totaled 2,018,479 shares at March
31, 1996 and 2,005,200 shares at December 31, 1995. Stock options outstanding
at March 31, 1996, and December 31, 1995, totaled 120,708 and 112,480,
respectively. Warrants outstanding totaled 271,798 at both March 31, 1996 and
December 31, 1995. The total number of options and warrants outstanding has
been retroactively adjusted for a 2% stock dividend issued on June 30, 1994 and
a two for one stock split issued on April 30, 1993.
Earnings per common share and common equivalent share were computed by
dividing net income by the weighted average number of common shares outstanding
during the period, including average common equivalent shares attributable to
dilutive stock options and warrants. The number of common shares was increased
by the number of shares issuable on the exercise of options and warrants when
the market price of the common stock exceeded the exercise price of the options
and warrants. This increase in the number of shares was reduced by the number
of common shares that are assumed to have been purchased with the proceeds from
the exercise of the options and warrants; those purchases were assumed to have
been made when the market price of the common stock exceeded the exercise price
of the options and warrants. The average number of shares used in the
determination of earnings per common share and common equivalent
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share and earnings per common share assuming full dilution were 2,241,837 and
2,063,863 respectively, for the three months ended March 31, 1996 and 1995.
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PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
CONSOLIDATED FINANCIAL REVIEW
During the first quarter of 1996, the Company continued its expansion
with the opening of three loan production offices located in Front Royal,
Warrenton, and Winchester, Virginia. Net income for the first quarter of 1996
was $391 thousand up 34% from $291 thousand for the first quarter of 1995.
Primary earnings per share was $.17 for the first quarter of 1996 compared to
$.14 for the same period in 1995. This increase in net income is primarily due
to continued growth in the Bank's loan portfolio. Return on average equity
increased from 10.65% from the first quarter of 1995 to 11.96% for the first
quarter of 1996. Return on average assets declined 10% to 1.00% due partially
to increased expenses associated with branch expansion and an increase in the
provision for loan losses. Assets totaled $160.9 million at March 31, 1996, up
from $158.8 million at December 31, 1995.
BALANCE SHEET ANALYSIS
LOANS
Total loans net of unearned income were $109.5 million at March 31,
1996 compared to $106.7 million at December 31, 1995. A schedule of
outstanding loans at March 31, 1996 and December 31, 1995 is shown below.
MARCH 31 DECEMBER 31
(dollars in thousands) 1996 1995
- - ---------------------------------------------------------------------------------------
Commercial & SBA $30,454 $32,270
Commercial mortgage 26,332 23,187
Construction 17,974 16,777
Residential Mortgage 12,697 12,431
Home Equity 5,433 5,275
Installment 6,776 4,243
SBA loans held for Sale 10,294 12,917
----------------------------------
Total Gross Loans $109,960 $107,100
Unearned Income (428) (424)
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Loans, net of unearned income $109,532 $106,676
Allowance for Loan Losses (1,459) (1,332)
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Loans, net of allowance for loan losses $108,073 $105,344
==================================
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Commercial and residential mortgage loans accounted for 35.6% of the
loan portfolio, net of unearned income, at March 31, 1996, compared to 33.3% at
December 31, 1995. These loans are for primarily owner-occupied or fully
leased real estate. At March 31, 1996 real estate construction loans comprised
approximately 16.4% of the Company's loan portfolio as compared to 15.7% at
December 31, 1995. The loans are primarily used for construction of
owner-occupied pre-sold residential homes and are considered an attractive type
of lending due to their short-term maturities and higher yields. Commercial and
S.B.A. loans totaled $30.5 million or 27.8% of the Bank's total loan portfolio
at the end of the first quarter of 1996. At December 31, 1995 these loans
amounted to $32.3 million or 30.3% of the Bank's loan portfolio. Commercial
business loans typically are made on the basis of the borrower's ability to
make payment from the cash flow of its business and are either unsecured or
secured by business assets, such as accounts receivable, equipment and
inventory. $21.0 million of loans in this category consist of the
non-guaranteed portion of S.B.A. loans currently participated out or held for
sale.
The Bank is a "Preferred" S.B.A. lender. This designation means that
the S.B.A. has reviewed the Bank's loan procedures and determined that the Bank
meets S.B.A. standards for the underwriting and packaging of loans. At March
31, 1996 total S.B.A. loans were $19.8 million or 18.0% of total loans,
constituting one of the fastest growing segments of the Bank's loan portfolio.
Total S.B.A. loans held for sale were $10.3 million at March 31, 1996, which
was 9.4% of the Bank's total loan portfolio. S.B.A. loans are 75-90%
guaranteed by the Federal government. The guaranteed portion of S.B.A. loans
are saleable in the secondary market.
Installment loans increased from $4.2 million at December 31, 1995 to
$6.8 million at March 31, 1996; an increase of 60%. Installment loans consist
primarily of loans to individuals and credit card loans. Home Equity loans
were up slightly from December 31, 1995 to 5.4 million at March 31, 1996.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is maintained at a level at which
estimated loan losses inherent in the loan portfolio are covered. The
allowance consists of funds set aside for specific loans and a general
unallocated reserve to offset any additional allocations needed. At March 31,
1996 the allowance was $1.46 million or 1.33% of gross loans. This is up from
$1.3 million and 1.25% of gross loans at December 31, 1995.The increase in the
allowance for loan losses is partially due to the growth in loans and a change
in the credit classification of one commercial loan that was subsequently
placed on non-accrual.
NON-PERFORMING AND PAST-DUE LOANS
At March 31, 1996 there were two loans totaling $76 thousand that were
past due 90 days or greater. Past due loans of 90 days or greater at December
31, 1995 consisted of three
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loans for $223 thousand. There were no loans on non-accrual at March 31, 1996
or December 31, 1995; however, subsequent to the first quarter, one loan was
placed on non-accrual in the amount of $508 thousand.
ALLOWANCE FOR LOAN LOSSES
Three months Year ended
ended March 31 December 31
(dollars in thousands) 1996 1995
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Beginning Balance $1,332 $965
Provision for the period 127 372
Charge-offs -- (9)
Recoveries -- 4
- - ---------------------------------------------------------------------------------------
Balance at end of period $1,459 $1,332
=======================================================================================
Allowance to loans * 1.33% 1.25%
Net charge-offs to average loans * -- 0.01%
Net charge-offs to allowance -- 0.38%
* net of unearned income
INVESTMENTS
The Company's securities portfolio is comprised of U.S. Treasury
securities, U.S. Government Agency securities, U.S. Government Agency mortgage
backed securities and tax exempt obligations of states and political
subdivisions.
SECURITIES - AVAILABLE FOR SALE
March 31, 1996 December 31, 1995
--------------------------------------------------------------------
(dollars in thousands) Amortized Cost Fair Value Amortized Cost Fair Value
- - ---------------------------------------------------------------------------------------------------------------
U.S. Treasury securites $2,999 $3,005 $2,999 $3,010
U.S. Government securities 30,425 30,158 23,928 24,087
Municipal securities - Revenue
Obligations 235 234 235 233
Mortgage backed securites
Guaranteed by GNMA 667 658 678 678
All other equity securities 677 677 657 657
- - ---------------------------------------------------------------------------------------------------------------
Total Securities $35,004 $34,732 $28,497 $28,665
===============================================================================================================
All of the company's investments at March 31, 1996 and December 31,
1995 were classified as available for sale. The Financial Accounting Standards
Board requires that available for sale securities by recorded at fair value.
The associated unrealized gains or losses
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on these securities are recorded, net of tax, as a separate component of
stockholders' equity. There was an unrealized loss at March 31, 1996 of $272
thousand and an unrealized gain of $168 thousand on December 31, 1995. The
securities portfolio is summarized on the previous page.
DEPOSITS
Total deposits were $125.3 million at March 31, 1996 up $5.1 million
from December 31, 1995. The Bank offers a full range of deposit services,
including checking accounts, savings accounts and other time deposits of
various types, ranging from daily money market accounts to longer-term
certificates of deposit. Deposits represent the primary funding source of the
Company and the increase in deposits is largely due to the increased number of
banking offices. A summary of deposit balances at March 31, 1996 and December
31, 1995 are shown in the following schedule.
March 31 December 31
(dollars in thousands) 1996 1995
- - ------------------------------------------------------------------------------------
NOW $11,091 $10,147
Savings 11,373 8,620
Money Market 19,596 19,171
Certificates of Deposit less than $100,000 32,878 32,117
Certificates of Deposit greater than $100,000 16,711 14,617
IRA and Keogh 7,092 7,032
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Total Interest-Bearing Deposits $98,741 $91,704
Non-Interest-Bearing Deposits 26,609 28,555
- - ------------------------------------------------------------------------------------
Total Deposits $125,350 $120,259
====================================================================================
OTHER BORROWINGS
The Company borrows short-term and long-term monies in the form of
purchased Federal Funds, repurchase agreements, master note agreements, and
from the Federal Home Loan Bank of Atlanta. At both March 31, 1996 and
December 31, 1995 there were no Federal Funds Purchased. A summary of other
borrowings is presented to the right.
March 31, December 31,
(dollars in thousands) 1996 1995
- - -------------------------------------------------------------
Repurchase agreements $4,921 $4,916
Master note agreements 13,805 15,491
FHLB borrowings 1,445 2,309
Other long-term debt 1,196 1,199
- - -------------------------------------------------------------
Total Other Borrowings $21,366 $23,915
=============================================================
INTEREST RATE SENSITIVITY
The Company monitors interest rate sensitivity of the balance sheet
and reviews asset and liability repricing weekly to minimize the earnings
sensitivity to changes in interest rates
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while maintaining a net interest margin within the Company's objectives. The
following table represents the Company's interest rate sensitivity at March 31,
1996, using known maturities and repricing schedules of loans, deposits and
securities. This table presents a position that existed at one particular day
and is not necessarily indicative of the Company's position at any other time.
RATE SENSITIVITY ANALYSIS AT MARCH 31, 1996
Interest Sensitivity Period
------------------------------------------------------------------------------------
After 3 months After 6 months
(dollars in thousands) Within 3 months Within 6 months Within 12 months After 12 months Total
- - ----------------------------------------------------------------------------------------------------------------------------------
EARNING ASSETS:
Loans 79,146 5,038 3,966 21,382 109,532
Investment securities 2,250 2,500 999 29,032 34,781
Federal Funds Sold 2,562 -- -- -- 2,562
- - ----------------------------------------------------------------------------------------------------------------------------------
Total earning assets 83,958 7,538 4,965 50,414 146,875
==================================================================================================================================
EARNING ASSET FUNDING:
Interest-bearing deposits 57,845 6,161 9,904 24,831 98,741
Other borrowed funds 19,049 -- 861 260 20,170
Other long-term debt -- -- -- 1,196 1,196
Non-interest bearing funds 26,609 -- -- -- 26,609
- - ----------------------------------------------------------------------------------------------------------------------------------
Earning assets funding 103,503 6,161 10,765 26,287 146,716
==================================================================================================================================
RATE SENSITIVITY GAP:
Period (19,545) 1,377 (5,800) 24,127 159
Cumulative (19,545) (18,168) (23,968) 159 --
- - ----------------------------------------------------------------------------------------------------------------------------------
ADJUSTED GAP AS A PERCENT OF EARNING ASSETS:
Period -13.31% 0.94% -3.95% 16.43% 0.11%
Cumulative -13.31% -12.37% -16.32% 0.11% 0.00%
- - ----------------------------------------------------------------------------------------------------------------------------------
LIQUIDITY
The Company maintains a stable base of core deposits, cash and cash
equivalents, federal funds sold, and securities available for sale to meet
potential funding needs of loan and deposit customers. The total of cash and
due from banks, available for sale securities and Federal funds sold was $45.2
million at March 31, 1996 and $41.4 million at December 31, 1995, respectively;
an increase of 9.2%.
CAPITAL REQUIREMENTS
In January 1989, the Federal Reserve Board published risk-based
capital guidelines in final form which are applicable to bank holding
companies. The Federal Reserve Board guidelines redefine the components of
capital, categorize assets into different risk classes and include certain
off-balance sheet items in the calculation of risk-weighted assets. These
guidelines became effective on March 15, 1989. The minimum ratio of qualified
total capital to risk-weighted assets (including certain off balance sheet
items, such as standby letters of credit) is 8.00%. At least half
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of the total capital must be comprised of common equity, retained earnings and
a limited amount of permanent preferred stock, less goodwill ("Tier 1
capital"). The remainder ("Tier 2 capital") may consist of a limited amount of
subordinated debt, other preferred stock, certain other instruments and a
limited amount of loan and lease loss reserves. The sum of Tier 1 and Tier 2
capital is "total-risk based capital." The Company's Tier 1 capital and total
risk-based capital ratios as of March 1996 are presented in the table below.
REGULATORY CAPITAL
Patriot National First Patriot Well-
Bank Bankshares Corp. Capitalized
MARCH 31 MARCH 31 Regulatory
(dollars in thousands) 1996 1996 Minimums
- - -------------------------------------------------------------------------------------------------------------
CAPITAL:
Tier 1 Capital:
Shareholders' common equity $11,121 $12,907
Less disallowed intangibles -- 237
Add unrealized holding losses
on available for sale securities 272 272
- - -------------------------------------------------------------------------------------------
Total Tier 1 capital 11,393 12,942
- - -------------------------------------------------------------------------------------------
Tier 2 Capital:
Qualifying allowance for loan
losses 1,397 1,411
- - -------------------------------------------------------------------------------------------
Total Tier 2 capital 1,397 1,411
- - -------------------------------------------------------------------------------------------
Total Capital $12,790 $14,353
===========================================================================================
Gross risk-adjusted assets 111,739 112,895
Less excess allowance for loan
losses 63 48
- - -------------------------------------------------------------------------------------------
Net risk-adjusted assets 111,676 112,847
Average total assets 156,142 158,459
- - -------------------------------------------------------------------------------------------
RATIOS:
Tier 1 capital to net risk-adjusted
assets 10.20% 11.47% 6.00%
Tier 2 capital to net risk-adjusted
assets 1.25% 1.25%
- - ---------------------------------------------------------------------------------------------------------
Total capital to net risk-adjusted
assets 11.45% 12.72% 10.00%
=========================================================================================================
In addition, the Federal Reserve Board has established a minimum
leverage ratio of Tier 1 capital to quarterly average assets less goodwill
("Leverage ratio") of 3.00% for bank holding companies that meet certain
specified criteria, including that they have the highest regulatory rating.
All other bank holding companies will be required to maintain a Leverage ratio
of 3.00% plus an additional amount of at least 100 to 200 basis points. The
Company's Leverage ratio as of March 31, 1996 are summarized in the table
above. The guidelines also
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provide that banking organizations experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions
substantially above the minimum supervisory levels, without significant
reliance on intangible assets.
The Bank is subject to capital requirements adopted by the OCC that
are substantially similar to those that apply to the Company. These ratios are
in the table on the prior page.
INCOME STATEMENT ANALYSIS
Interest income accounted for 86% of the Company's total income for
the first quarter of 1996. Interest income was $3.4 million for the quarter
ended March 31, 1996 compared to $2.3 million for the same period in 1995. The
increase in interest income is a result of increased volume in earning assets.
Interest and fees on loans totaled $2.8 million for the first quarter of 1996,
up approximately 40% over the same period in 1995. Interest on investment
securities increased 97% from $237 thousand in the first quarter of 1995 to
$468 thousand as of March 31, 1996.
Average earning assets totaled approximately $146 million for the
first quarter of 1996, compared to $98.2 million for the first quarter of 1995;
an increase of 49%. Average loans increased from $76.8 million in the first
quarter of 1995 to $108.2 million for the same period in 1996.
Average interest-bearing deposits in the first quarter of 1996
increased 49.5% over the first quarter of 1995. Average other borrowed funds
was $19.4 thousand for the first quarter of 1996, representing a 78.1% increase
over the same period in 1995. Interest expense was $1.4 million and $.8
million for the quarters ended March 31, 1996 and 1995, respectively. Net
interest income was $1.9 million for the quarter ended March 31, 1996 and $1.4
million for the quarter ended March 31, 1995; an increase of 33.2%.
Non-interest income consists mostly of service charges and fees on
bank services and deposit accounts. Total non-interest income was $515
thousand for the first quarter of 1996 and $387 thousand for the same period in
1995; an increase of 33.1%.
Salaries and benefits, occupancy and equipment, and other operating
expenses make up the total of non-interest expense. These expenses increased
$390 thousand from March 31, 1995 to March 31, 1996 to the current balance of
$1.8 million. The increased non-interest expense is due to the expansion of
the bank from 5 branches at March 31, 1995 to 8 branches and 3 loan production
offices at March 31, 1996.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
FIRST PATRIOT BANKSHARES CORPORATION
- - ------------------------------------
By: /s/
------------------------------------------------- May 14, 1996
Carroll C. Markley
President, Chief Executive Officer
and Director
By: /s/
------------------------------------------------- May 14, 1996
Charles Wimer
Senior Vice President and Chief Financial Officer
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ITEM 6. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8K.
Financial statements and schedules are included in Part 1, Item 1 above.
Exhibit 11 - Computation of earnings per share is on page 18.
Form 8 K - There were no reports on Form 8 K filed during the first quarter.
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