1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
- --------------------------------------------------------------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
[ ] TRANSITIONAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from________________ to_____________
COMMISSION FILE NUMBER: 000-22201
EMERALD FINANCIAL CORP.
-----------------------
(Exact name of registrant as specified in its charter)
OHIO 34-1842953
------------------------------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
14092 PEARL ROAD
STRONGSVILLE, OHIO 44136
------------------ -----
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (440) 238-7311
CAPITAL STOCK, WITHOUT PAR VALUE
--------------------------------
Title of Class
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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Capital Stock, No Par Value 5,071,600
- --------------------------------------------------------------------------------
(Class) (Outstanding at October 31, 1997)
2
EMERALD FINANCIAL CORP.
TABLE OF CONTENTS
-----------------
PART I. FINANCIAL INFORMATION PAGE
Item I. Financial Statements:
Consolidated Statements of Financial
Condition as of September 30, 1997, and
December 31, 1996.............................................................. 2
Consolidated Statements of Income for
the Three and Nine Month Periods Ended September
30, 1997 and 1996.............................................................. 3
Consolidated Statements of Cash Flows
for the Nine Month Periods Ended September
30, 1997 and 1996.............................................................. 4
Notes to Consolidated Financial Statements..................................... 5
Selected Financial Information........................................................... 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................................. 9
Tables......................................................................... 20
PART II. OTHER INFORMATION
Item 4. Submission of Matters to Vote of Security Holders.............................. 23
Item 6. Exhibits and Reports on Form 8-K............................................... 23
SIGNATURES ...................................................................................... 24
3
EMERALD FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
SEPTEMBER 30, DECEMBER 31,
1997 1996
- -----------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)
ASSETS:
CASH AND CASH EQUIVALENTS
Cash and deposits with banks $ 3,107 $ 3,146
Interest bearing deposits with banks 6,843 4,406
INVESTMENT SECURITIES
Held-to-maturity (fair values of $19,541 and $47,496 at
September 30, 1997 and December 31, 1996, respectively) 19,930 47,684
Available for sale (at fair value) 35,342 21,996
MORTGAGE-BACKED SECURITIES
Held-to-maturity (fair values of $28,194 and $33,104 at
September 30, 1997 and December 31, 1996, respectively) 27,573 32,536
Available for sale (at fair value) 26,876 19,644
LOANS-NET
(Including allowance for loan losses of $1,687 and $1,423 at
September 30, 1997 and December 31, 1996, respectively) 466,599 425,060
Loans held for sale 2,649 795
Accrued interest receivable 3,718 3,238
Federal Home Loan Bank stock-at cost 3,441 2,831
Premises and equipment-net 4,163 3,939
Prepaid expenses and other assets 3,252 2,215
- -----------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 603,493 $ 567,490
=================================================================================================================
LIABILITIES:
Deposits $ 522,657 $ 493,471
Federal Home Loan Bank advances 28,188 25,234
Deferred federal income tax 1,856 1,584
Advance payments by borrowers 767 1,502
Accrued interest payable 677 586
Accounts payable and other 2,267 1,955
- -----------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 556,412 524,332
SHAREHOLDERS' EQUITY
Common stock, no par value, 10,000,000 shares authorized,
5,071,600 shares issued and outstanding 9,928 9,831
Fair value adjustment, net of tax effect 93 (95)
Retained earnings 37,060 33,422
- -----------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 47,081 43,158
- -----------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 603,493 $ 567,490
=================================================================================================================
See notes to consolidated financial statements
2
4
EMERALD FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
1997 1996 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------------
(Dollars In thousands, except per share data)
INTEREST INCOME
Loans $ 9,384 $ 8,434 $ 27,370 $ 23,760
Investment securities 977 888 2,735 2,941
Mortgage-backed securities 950 699 2,999 2,350
Other 139 88 528 344
- ----------------------------------------------------------------------------------------------------------------------------------
11,450 10,109 33,632 29,395
INTEREST EXPENSE
Deposits 6,805 6,007 19,849 17,238
Advances from the Federal Home Loan Bank 456 272 1,248 751
- ----------------------------------------------------------------------------------------------------------------------------------
7,261 6,279 21,097 17,989
- ----------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 4,189 3,830 12,535 11,406
Provision for loan losses 108 285 277 313
- ----------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 4,081 3,545 12,258 11,093
NON-INTEREST INCOME
Gain on sale of assets 114 418 265 679
Loan service fees 191 149 534 471
Other 293 178 730 505
- ----------------------------------------------------------------------------------------------------------------------------------
598 745 1,529 1,655
NON-INTEREST EXPENSE
Salaries and employee benefits 989 960 3,060 2,770
Net occupancy and equipment 400 394 1,168 1,139
Franchise tax 146 140 439 420
Federal deposit insurance 79 251 234 734
Amortization of goodwill 30 33 92 100
Other 643 623 1,864 1,953
- ----------------------------------------------------------------------------------------------------------------------------------
Non-interest expense 2,287 2,401 6,857 7,116
One-time SAIF assessment - 2,481 - 2,481
- ----------------------------------------------------------------------------------------------------------------------------------
2,287 4,882 6,857 9,597
- ----------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE FEDERAL INCOME TAXES 2,392 (592) 6,930 3,151
Provision for federal income taxes 815 (179) 2,381 1,132
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 1,577 $ (413) $ 4,549 $ 2,019
==================================================================================================================================
Earnings per common share
Primary $ 0.31 $ (0.08) $ 0.90 $ 0.40
Fully diluted $ 0.30 $ (0.08) $ 0.87 $ 0.40
See notes to consolidated financial statements
3
5
EMERALD FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
NINE MONTHS ENDED SEPTEMBER 30,
1997 1996
- ------------------------------------------------------------------------------------------------------------------------
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 4,549 $ 2,019
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
Provision for loan losses 277 313
Gain from sale of assets (265) (679)
Depreciation and amortization 570 610
Accretion of discounts and other deferred yield items (1,801) (1,638)
Effect of change in accrued interest
receivable and payable (389) 6
Federal Home Loan Bank stock dividends (170) (136)
Deferred federal income taxes 174 (26)
Net change in other assets and liabilities (816) 3,096
Proceeds from sale of loans held for sale 35,954 20,100
Originations of loans held for sale (37,297) (19,295)
- ------------------------------------------------------------------------------------------------------------------------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES 786 4,370
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in loans (35,356) (89,372)
Purchases of:
Mortgage-backed securities and loans (14,400) (3,149)
Investment securities (45,451) (17,300)
Premises and equipment (682) (621)
Federal Home Loan Bank Stock (440) (239)
Proceeds from:
Sale premises & equipment - 640
Mortgage-backed securities principal repayments 5,943 8,818
Sales of available for sale mortgage-backed securities 1,300 6,744
Investment securities maturities and principal repayments 51,655 36,232
Sales of available for sale investment securities 8,467 -
Net expenditures on foreclosed real estate (911) (147)
Proceeds from sale of foreclosed real estate 897 -
- ------------------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (28,978) (58,394)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in non-interest bearing demand, savings,
and NOW deposit accounts 3,825 (4,787)
Net increase in time deposits 25,361 46,784
Payments on advances from the Federal Home Loan Bank (20,446) (54,695)
Proceeds from advances from the Federal Home Loan Bank 23,400 58,650
Net decrease in escrows (735) (436)
Common stock issued 96 -
Payment of dividends on common stock (911) (886)
- ------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 30,590 44,630
- ------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN CASH AND CASH EQUIVALENTS 2,398 (9,394)
CASH AND CASH EQUIVALENTS, AT BEGINNING OF THE PERIOD 7,552 15,509
- ------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, AT END OF THE PERIOD $ 9,950 $ 6,115
========================================================================================================================
INTEREST PAID $21,006 $17,935
========================================================================================================================
INCOME TAXES PAID $ 2,075 $ 1,863
========================================================================================================================
See notes to consolidated financial statements
4
6
EMERALD FINANCIAL CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS
--------------------
Emerald Financial Corp. (Emerald or Company) is a unitary
thrift holding company formed in 1996 which became the parent company of The
Strongsville Savings Bank (Strongsville or Bank) on March 6, 1997, through a
tax-free exchange of shares of Strongsville for shares of Emerald. The Company's
primary holding is The Strongsville Savings Bank. The Bank conducts its
principal activities from its Community Financial Centers located in
southwestern Cuyahoga, Lorain and Medina counties. The Bank's principal
activities include residential lending and retail banking.
2. BASIS OF PRESENTATION
---------------------
The consolidated financial statements of the Company include
the accounts of Emerald and the accounts of its wholly owned subsidiaries, The
Strongsville Savings Bank and Emerald Development Corp. All significant
inter-company transactions have been eliminated. In the opinion of management,
the accompanying unaudited financial statements include all adjustments
(consisting only of normal recurring accruals) which the Company considers
necessary for a fair presentation of (a) the results of operations for the three
and nine month periods ended September 30, 1997 and 1996; (b) the financial
condition at September 30, 1997, and December 31, 1996; and (c) the statements
of cash flows for the nine month periods ended September 30, 1997 and 1996. The
results of operations for the three and nine month periods ended September 30,
1997 are not necessarily indicative of the results that may be expected for a
full year.
Certain prior period data has been reclassified to conform to
current year presentation.
3. STATEMENTS OF CASH FLOWS
------------------------
For purposes of the Statements of Cash Flows, Emerald
considers all cash and deposits with banks with maturities of less than three
months to be cash equivalents.
4. EARNINGS PER SHARE
------------------
Primary and diluted earnings per share are calculated using the
weighted average number of shares of capital stock and capital stock equivalents
outstanding for the period. The weighted average number of shares of capital
stock outstanding has been retroactively adjusted to reflect the two-for-one
stock split effective May 15, 1997 for shareholders of record on May 1, 1997.
5
7
5. NEW ACCOUNTING STANDARDS
------------------------
STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 125,
Accounting for Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities, was effective January 1, 1997. SFAS 125 amends portions of SFAS
115, Accounting for Certain Investments in Debt and Equity Securities, amends
and extends to all servicing assets and liabilities the accounting standards for
mortgage servicing rights provided by SFAS No. 65, and supersedes SFAS No. 122.
SFAS No. 125 provides consistent standards for distinguishing transfers of
financial assets that are sales from transfers that are secured borrowings based
on a financial-components approach. Under the financial-components approach,
after a transfer of financial assets, an entity recognizes the financial and
servicing assets it controls and the liabilities it has incurred, derecognizes
financial assets when control has been surrendered, and derecognizes liabilities
when extinguished. The adoption of this statement did not have a material impact
on the Company's consolidated financial statements. SFAS No. 127 defers the
effective date of certain provisions of SFAS No. 125 until January 1, 1998, and
is not expected to have a material impact on the Company's consolidated
financial statements.
In February 1997 the FASB issued STATEMENT OF FINANCIAL
ACCOUNTING STANDARDS NO. 128, Earnings Per Share. SFAS No. 128 establishes
standards for computing and presenting earnings per share (EPS) and applies to
entities with publicly held common stock. SFAS No. 128 simplifies the standards
for computing EPS previously found in Accounting Principles Board Opinion No.
15, Earnings Per Share, and makes them comparable to international EPS
standards. It replaces the presentation of primary EPS with a presentation of
basic EPS. It also requires dual presentation of basic and diluted EPS on the
face of the income statement for all entities with complex capital structures.
SFAS 128 is effective for financial statements for both interim and annual
periods ending after December 15, 1997.
In February 1997 the FASB also issued STATEMENT OF FINANCIAL
ACCOUNTING STANDARDS NO. 129, Disclosures of Information about Capital
Structure. This statement establishes standards for disclosing information about
an entity's capital structure. It supersedes specific disclosure requirements of
APB Opinions No. 10, Omnibus Opinion-1966, and No. 15, Earning Per Share, and
FASB Statement No. 47, Disclosure of Long-Term Obligations, and consolidates
them in this statement for ease of retrieval and for greater visibility to
nonpublic entities. SFAS No. 129 is effective for financial statements for
periods ending after December 15, 1997. It contains no changes in disclosure
requirements for entities that were previously subject to the requirements of
Opinions 10 and 15 and Statement 47 and, therefore, is not expected to have a
significant impact on the financial condition or results of operations of the
Company.
6
8
In June 1997, the FASB issued STATEMENT OF FINANCIAL ACCOUNTING
STANDARDS NO. 130, Reporting Comprehensive Income. This statement establishes
standards for the reporting and display of comprehensive income and its
components in a full set of general- purpose financial statments. This
statement is effective for fiscal years beginning after December 15, 1997.
7
9
SELECTED FINANCIAL INFORMATION
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 (a) 1997 1996 (a)
- ----------------------------------------------------------------------------------------------------------------------------------
Unaudited
(Dollars in thousands, except per-share data)
ANNUALIZED RETURNS AND OPERATING RATIOS
Earnings per share - primary $ 0.31 $ 0.24 $ 0.90 $ 0.72
Earnings per share - fully diluted 0.30 $ 0.24 0.87 0.72
Weighted average number of shares outstanding 5,065,383 5,061,600 5,062,875 5,061,600
Common stock equivalents 5,252,275 5,099,344 5,249,767 5,099,344
Dividends per share $ 0.06 $ 0.06 $ 0.18 $ 0.175
Return on Average Assets 1.04% 0.91% 1.02% 0.95%
Return on Average Equity 13.68% 11.49% 13.50% 11.55%
Noninterest expense to
average assets 1.51% 1.77% 1.53% 1.81%
Efficiency ratio 48.79% 56.98% 49.20% 56.66%
OTHER SELECTED FINANCIAL RATIOS
Interest rate spread 2.48% 2.56% 2.53% 2.65%
Net yield on interest-earning assets 2.84% 2.93% 2.89% 3.03%
Yield on average interest-earning assets 7.76% 7.74% 7.74% 7.80%
Cost of average interest-bearing liabilities 5.28% 5.18% 5.21% 5.15%
Non-performing loans to total loans 0.31% 0.51% 0.31% 0.51%
Non-performing assets to total assets 0.24% 0.42% 0.24% 0.42%
Net recoveries (charge-offs) to average loans 0.00% -0.02% 0.00% -0.02%
Capital ratios of thrift subsidiary:
Tangible capital ratio 7.52% 7.61% 7.52% 7.61%
Core capital ratio 7.52% 7.61% 7.52% 7.61%
Risk-based capital ratio 12.65% 12.77% 12.65% 12.77%
Shareholders' Equity per share $ 9.28 $ 8.53 $ 9.28 $ 8.53
Tangible Equity per share 9.13 8.39 9.13 8.39
Average total assets 603,756 535,617 592,043 515,775
Average loans, net (includes held for sale) 458,261 416,668 446,754 383,679
Average interest-earning assets 590,068 522,241 579,156 502,378
Average deposits 520,151 466,385 511,535 448,766
Average advances from the FHLB 30,063 18,313 27,997 17,086
Average shareholders' equity 46,093 42,622 44,945 42,193
Annualized asset growth 0.27% 9.83% 8.46% 13.57%
<FN>
(a) The effect of the one-time SAIF premium assessed on September 30, 1996 is
excluded from all relevant calculations for the three and nine month
periods ended September 30, 1996.
8
10
Part I, Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
- -------
Emerald Financial Corp. (Emerald or Company), a unitary thrift holding
company, became the holding company of The Strongsville Savings Bank
(Strongsville or Bank) in a tax-free exchange of shares of the Bank for shares
of Emerald on March 6, 1997. As a result, Emerald owns and operates the Bank.
All references to the Company or Emerald, unless otherwise indicated, refer to
the Bank and its subsidiary on a consolidated basis. Strongsville was founded in
1961 as an Ohio-chartered, federally insured savings association whose business
activities are concentrated in the greater Cleveland, Ohio area. The Company
conducts its business through its home office in Strongsville and its thirteen
additional full-service Community Financial Centers located in Cuyahoga, Lorain
and Medina counties. The Company formed Emerald Development Corp., a wholly
owned subsidiary, on June 3,1997. The development company was formed to take
advantage of opportunities to develop real estate as well as to enter into joint
real estate development ventures in the future.
The Company's principal business has historically been attracting
deposits from the general public and making loans secured by first mortgage
liens on residential and other real estate. The Bank and the banking industry in
general are significantly affected by prevailing economic conditions, the
general level and trend of interest rates as well as by government policies and
regulations concerning, among other things, fiscal affairs, housing and
financial institutions.
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- ---------------------------------------------
Emerald's total assets were $603.5 million at September 30, 1997,
representing an increase of $36.0 million, or 8.46%, annualized, for the nine
month period and $61.3 million, or 11.3% for the twelve month period ended
September 30, 1997. The increase in assets was primarily concentrated in the
loan portfolio. Emerald's loan portfolio increased $43.4 million during the nine
months and $42.7 million during the twelve months ended September 30, 1997. The
increases in loans were funded primarily by increases in deposits.
The Company's deposits were $522.7 million at September 30, 1997,
representing an increase of $29.2 million, or 7.8% during the nine month period
and $48.1 million, or 10.1% for the twelve month period ended September 30,
1997.
Net interest income was $4.2 million for the quarter ended September
30, 1997, an increase of $0.4 million over the third quarter of 1996. The
increase in interest-earning assets, partially offset by a reduction in interest
rate spread, caused the improvement.
9
11
Average interest-earning assets increased $67.9 million from $522.2 million for
the third quarter of 1996 to $590.1 million for the third quarter of 1997. The
Bank's interest rate spread decreased 8 basis points from 2.56% during the third
quarter of 1996 to 2.48% during the third quarter of 1997.
Net income for the third quarter of 1997, at $1.6 million, was $0.4
million more than the $1.2 million for the same period in 1996, as adjusted. The
third quarter 1996 net income was adjusted for the effect of the one-time SAIF
premium assessed on September 30, 1996, an after-tax charge to income of $1.6
million. The increase was primarily due to the increase in net interest income.
Net interest income was $12.5 million for the first nine months of
1997, an increase of $1.1 million over the first nine months of 1996. The
increase in interest-earning assets, partially offset by a reduction in interest
rate spread, caused the improvement. Average interest-earning assets increased
$76.8 million from $502.4 million for the nine months ended September 30, 1996
to $579.2 million for the like period in 1997. The Bank's interest rate spread
decreased 12 basis points from 2.65% during the first nine months of 1996 to
2.53% during the like period in 1997.
Net income for the first three quarters of 1997, at $4.5 million, was
$0.9 million more than the $3.6 million for the same period in 1996, as
adjusted. 1996 net income was adjusted for the effect of the one-time SAIF
premium assessed on September 30, 1996, an after-tax charge to income of $1.6
million. The increase was primarily due to the increase in net interest income.
10
12
Tables 1(a) and 1(b) present information regarding the average balances
of interest-earning assets and interest-bearing liabilities, the total dollar
amount of interest income from interest-earning assets and their average yields
and the total dollar amount of interest expense on interest-bearing liabilities
and their average rates. Table 1 also presents net interest income,
interest-rate spread, net interest margin and the ratio of average
interest-earning assets to average interest-bearing liabilities. Interest-rate
spread represents the difference between the weighted average yield on
interest-earning assets and the weighted average cost of interest-bearing
liabilities. Net interest margin represents net interest income as a percent of
average interest-earning assets. Average balance calculations were based on
daily and monthly balances. Assets available for sale are included in the major
asset category as if they were held-to-maturity.
- -----------------------------------------------------------------------------------------------------------------------------------
TABLE 1 (a)
AVERAGE BALANCE TABLE
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
1997 1996
AVERAGE BALANCE INTEREST YIELD/RATE AVERAGE BALANCE INTEREST YIELD/RATE
- -----------------------------------------------------------------------------------------------------------------------------------
(In thousands)
INTEREST-EARNING ASSETS
Loans, net (1) $ 458,261 $ 9,384 8.19% $ 416,668 $ 8,434 8.10%
Investment securities 62,455 977 6.26% 57,617 888 6.17%
Mortgage-backed securities 56,800 950 6.69% 40,398 699 6.92%
Other interest-earning assets 12,551 139 4.45% 7,558 88 4.68%
- ---------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets 590,067 11,450 7.76% 522,241 10,109 7.74%
Noninterest-earning assets 13,689 13,376
=================================================================================================================================
TOTAL ASSETS $ 603,756 $ 535,617
=================================================================================================================================
INTEREST-BEARING LIABILITIES
Deposits (2) $ 520,151 $ 6,805 5.23% $ 466,385 $ 6,007 5.15%
Advances from FHLB 30,063 456 6.07% 18,313 272 5.94%
- ---------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 550,214 7,261 5.28% 484,698 6,279 5.18%
Noninterest-bearing liabilities 7,449 8,297
Shareholders' equity 46,093 42,622
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 603,756 $ 535,617
=================================================================================================================================
Net interest income $ 4,189 $ 3,830
Interest-rate spread 2.48% 2.56%
Net interest margin 2.84% 2.93%
Ratio of average interest-
earning assets to average
interest-bearing liabilities 107.24% 107.75%
- ---------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Average balances include non-accrual loans. Interest income includes
deferred loan fee amortization of $403,000 and $404,000 for the three
months ended September 30, 1997 and 1996, respectively.
(2) Deposits include noninterest-bearing demand accounts which were $11,858,000 and $10,231,000 at
September 30, 1997 and 1996, respectively.
11
13
- -----------------------------------------------------------------------------------------------------------------------------------
TABLE 1(b)
AVERAGE BALANCE TABLE
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1997 1996
AVERAGE BALANCE INTEREST YIELD/ RATE AVERAGE BALANCE INTEREST YIELD/RATE
- -----------------------------------------------------------------------------------------------------------------------------------
(In thousands)
INTEREST-EARNING ASSETS
Loans, net (1) $ 446,753 $27,370 8.17% $ 383,679 $23,760 8.26%
Investment securities 59,505 2,735 6.13% 64,652 2,941 6.07%
Mortgage-backed securities 57,695 2,999 6.93% 45,118 2,350 6.94%
Other interest-earning assets 15,203 528 4.63% 8,929 344 5.14%
- -----------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets 579,156 33,632 7.74% 502,378 29,395 7.80%
Noninterest-earning assets 12,887 13,397
====================================================================================================================================
TOTAL ASSETS $ 592,043 $ 515,775
====================================================================================================================================
INTEREST-BEARING LIABILITIES
Deposits (2) $ 511,535 $19,849 5.17% $ 448,766 $17,238 5.12%
Advances from FHLB 27,997 1,248 5.94% 17,086 751 5.86%
- -----------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 539,532 21,097 5.21% 465,852 17,989 5.15%
Noninterest-bearing liabilities 7,566 7,730
Shareholders' equity 44,945 42,193
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 592,043 $ 515,775
====================================================================================================================================
Net interest income $12,535 $11,406
Interest-rate spread 2.53% 2.65%
Net interest margin 2.89% 3.03%
Ratio of average interest-
earning assets to average
interest-bearing liabilities 107.34% 107.84%
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Average balances include non-accrual loans. Interest income includes
deferred loan fee amortization of $1,195,000 for the each of the nine
month periods ended September 30, 1997 and 1996.
(2) Deposits include noninterest-bearing demand accounts which were $11,858,000 and $10,231,000 at
September 30, 1997 and 1996, respectively.
12
14
Tables 2(a) and 2(b) present certain information regarding changes in interest
income and interest expense of the Company for the three month periods ended
September 30, 1997 and 1996. The table shows the changes in interest income and
interest expense by major category attributable to changes in the average
balance (volume) and the changes in interest rates. The net change not
attributable to either rate or volume is allocated on a prorata basis to the
change in rate or volume. Assets available for sale are included in the major
asset category as if they were held-to-maturity.
- -----------------------------------------------------------------------------------------------------------------------------------
TABLE 2 (a)
RATE/VOLUME TABLE
THREE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30,
1997 COMPARED TO 1996 1996 COMPARED TO 1995
INCREASE (DECREASE) INCREASE (DECREASE)
DUE TO CHANGES IN DUE TO CHANGES IN
VOLUME RATE TOTAL VOLUME RATE TOTAL
===================================================================================================================================
(In thousands)
INTEREST INCOME ON INTEREST-EARNING ASSETS
Loans, net $ 855 $ 95 $ 950 $ 2,071 $ (408) $ 1,663
Investment securities 76 13 89 (370) (20) (390)
Mortgage-backed securities 274 (23) 251 (188) (16) (204)
Other 55 (4) 51 (78) (23) (101)
- ------------------------------------------------------------------------------------------------------------------------------------
Total 1,260 81 1,341 1,435 (467) 968
- ------------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE ON INTEREST-BEARING LIABILITIES
Deposits 703 95 798 720 (129) 591
Advances from FHLB 178 6 184 61 (13) 48
- ------------------------------------------------------------------------------------------------------------------------------------
Total 881 101 982 781 (142) 639
- ------------------------------------------------------------------------------------------------------------------------------------
CHANGE IN NET INTEREST INCOME $ 379 $ (20) $ 359 $ 654 $ (325) $ 329
===================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
TABLE 2 (b)
RATE/VOLUME TABLE
NINE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
1997 COMPARED TO 1996 1996 COMPARED TO 1995
INCREASE (DECREASE) INCREASE (DECREASE)
DUE TO CHANGES IN DUE TO CHANGES IN
VOLUME RATE TOTAL VOLUME RATE TOTAL
===================================================================================================================================
(In thousands)
INTEREST INCOME ON INTEREST-EARNING ASSETS
Loans, net $ 3,866 $ (256) $ 3,610 $ 5,271 $ (842) $ 4,429
Investment securities (235) 29 (206) (791) (43) (834)
Mortgage-backed securities 652 (3) 649 87 (19) 68
Other 214 (30) 184 (252) (14) (266)
- -----------------------------------------------------------------------------------------------------------------------------------
Total 4,497 (260) 4,237 4,315 (918) 3,397
- -----------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE ON INTEREST-BEARING LIABILITIES
Deposits 2,441 170 2,611 2,225 149 2,374
Advances from FHLB 486 11 497 96 (46) 50
- -----------------------------------------------------------------------------------------------------------------------------------
Total 2,927 181 3,108 2,321 103 2,424
- -----------------------------------------------------------------------------------------------------------------------------------
CHANGE IN NET INTEREST INCOME $ 1,570 $ (441) $ 1,129 $ 1,994 $(1,021) $ 973
===================================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
13
15
NET INTEREST INCOME
- --------------------------------------------------------------------------------
Net interest income is the primary component of net income and is
determined by the characteristics of interest-earning assets and
interest-bearing liabilities, including the spread, or the difference between
the yields earned and the rates paid on those assets and liabilities. Net
interest income is the difference between interest income and interest expense.
Three months ended Nine months ended
September 30, 1997 September 30, 1997
- ---------------------------------------------- --------------------------------- --------------------------------
(Dollars in thousands)
Net interest income:
Current period $ 4,189 $ 12,535
Prior period 3,830 11,406
- ---------------------------------------------- --------------------------------- --------------------------------
Dollar change from prior period $ 359 $ 1,129
============================================== ================================= ================================
Percent change from prior period 9.37% 9.90%
============================================== ================================= ================================
Interest income
- ---------------
Interest income for the three months ended September 30, 1997, was
$11.5 million, compared to $10.1 million for the third quarter of 1996, an
increase of $1.4 million or 13.27%. This increase was primarily due to the
increase in average interest-earning assets as demonstrated on Table 2(a).
Average interest-earning assets increased to $590.1 million for the third
quarter of 1997 from $522.2 million for the third quarter of 1996. The effect of
the increase in interest-earning assets was enhanced by the 2 basis point
increase in the average yield on interest-earning assets to 7.76% for the third
quarter of 1997 from 7.74% for the like period in 1996.
Interest income for the nine months ended September 30, 1997, was $33.6
million, compared to $29.4 million for the like period in 1996, an increase of
$4.2 million or 14.42%. This increase was primarily due to the increase in
average interest-earning assets as demonstrated on Table 2(b). Average
interest-earning assets increased to $579.2 million for the first nine months of
1997 from $502.4 million for the first nine months of 1996. The effect of the
increase in interest-earning assets was offset somewhat by the 6 basis point
decline in the average yield on interest-earning assets to 7.74% for the first
three quarters of 1997 from 7.80% for the like period in 1996.
Interest expense
- ----------------
Interest expense increased during the quarter ended September 30, 1997,
compared to the same period in 1996 primarily due to an increase in average
interest-bearing liabilities of $65.5 million, or 13.52%, combined with an
increase in the average cost of interest-bearing liabilities. Average
interest-bearing liabilities were $550.2 million
14
16
and $484.7 million for the third quarter of 1997 and 1996, respectively. The
average cost of interest-bearing liabilities increased 10 basis points to 5.28%
for the third quarter of 1997 from 5.18% for the same period in 1996.
Interest expense increased during the nine months ended September 30,
1997, compared to the same period in 1996 primarily due to an increase in
average interest-bearing liabilities of $73.6 million, or 15.82%, combined with
an increase in the average cost of interest-bearing liabilities. Average
interest-bearing liabilities were $539.5 million and $465.9 million for the
first three quarters of 1997 and 1996, respectively. The average cost of
interest-bearing liabilities increased 6 basis points to 5.21% for the first
three quarters of 1997 from 5.15% for the same period in 1996.
Provision for loan losses
- -------------------------
The provision for loan losses for the three and nine month periods
ended September 30, 1997, were $108,000 and $277,000, respectively; compared to
$285,000 and $313,000, respectively, for the same periods in 1996. The
provisions for all periods were commensurate with management's estimate of the
credit risk in the loan portfolio. Economic conditions in the Bank's market area
were stable.
Further discussion and other information relating to loan losses and
nonperforming assets are included in the section titled "Asset Quality."
NONINTEREST INCOME
- ---------------------------------------------------------------------------------------------------------------
Three months ended Nine months ended
September 30, 1997 September 30, 1997
- ---------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
Noninterest income:
Current period $ 598 $ 1,529
Prior period 745 1,655
- --------------------------------------------------------------------------------------------------------------
Dollar change from prior period $(147) $ ( 126)
===============================================================================================================
Percent change from prior period (19.75)% (7.60)%
===============================================================================================================
Noninterest income consists primarily of fees earned for servicing
loans, providing services for customers and from gains on loan sales. The
decrease in noninterest income is primarily due to decreased gains on sales of
assets. The Company realized a gain on sale of a building in September 1996 of
$290,000. Fee based income increased $134,000 for the third quarter of 1997 as
compared to the third quarter of 1996. Fee based income increased $276,000 for
the nine month period ended September 30, 1997 as compared to the like period in
1996.
15
17
NONINTEREST EXPENSE
- -------------------------------------------------------------------------------------------------------------
Three months ended Nine months ended
September 30, 1997 September 30, 1997
- -------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
Noninterest expense:
Current period $ 2,287 $ 6,857
Prior period, excluding the
one-time SAIF premium 2,401 7,116
- -------------------------------------------------------------------------------------------------------------
Dollar change from prior period $ (114) $ (259)
==============================================================================================================
Percent change from prior period (4.79)% (3.65)%
=============================================================================================================
The decrease in noninterest expense is primarily due to the reduction
in the federal deposit insurance premium from 23(cent) per $100 of deposits
during the three and nine month periods ended September 30, 1996, to 6.5(cent)
per $100 of deposits for the same periods in 1997. Management is pleased with
the efficiency ratio of 48.79%, which has improved from the 56.98% for the third
quarter of 1996.
FEDERAL INCOME TAXES
- -------------------------------------------------------------------------------
The Company provided $815,000 and $2,381,000 for federal income tax
during the three and nine month periods ended September 30, 1997, respectively;
compared to the $(179,000) and $1,132,000 provided for federal income taxes
during the like periods in 1996. Net income before the provision for federal
income taxes increased for the compared periods resulting in a corresponding
increase in the provision for federal income taxes.
FINANCIAL RESOURCES AND LIQUIDITY
- --------------------------------------------------------------------------------
The Company's primary sources of funds are deposits, principal and
interest payments on loans, maturities of investment securities, proceeds from
the sale of loans, FHLB advances and funds generated through earnings. The
primary uses for such funds are to originate loans, maintain liquidity
requirements and manage interest rate risk.
For an analysis of Emerald's cash flows, refer to the Consolidated
Statements of Cash Flows on page 3. Management believes the Company has adequate
resources to meet its normal funding requirements.
The Bank is required to maintain an average daily balance of liquid
assets equal to 5% of the sum of its average daily balance of net withdrawable
accounts and borrowed funds due in one year or less. The Bank's September 1997
monthly average of eligible liquid assets was 6.91%.
16
18
SHAREHOLDERS' EQUITY
- --------------------------------------------------------------------------------
Shareholders' equity was $47.1 million at September 30, 1997, an
increase of $3,923,000, or 9.09%, annualized, during the first three quarters of
1997. This increase was primarily the result of net income offset by dividends
paid. Emerald paid dividends in the first three quarters of 1997 of 18(cent) per
share, an increase of 2.86% over the 17.5(cent) per share dividend paid in the
like period in 1996.
The Company's return on average assets was 1.02% and return on average
equity was 13.50% for the nine months ended September 30, 1997.
At September 30, 1997, the Company's primary subsidiary, The
Strongsville Savings Bank, was in excess of all capital requirements specified
by federal regulations as shown by the following table.
TANGIBLE CAPITAL CORE CAPITAL RISK-BASED CAPITAL
-----------------------------------------------------------
(Dollars in thousands)
Capital amount -- Actual $ 45,255 $45,255 $ 46,938
Capital amount -- Required 9,027 18,055 29,692
===========================================================
Amount in excess of requirement $36,228 $27,200 $17,246
===========================================================
Capital ratio -- Actual 7.52% 7.52% 12.65%
Capital ratio -- Required 1.50% 3.00% 8.00%
-----------------------------------------------------------
Amount in excess of requirement 6.02% 4.52% 4.65%
=================================================-=========
Strongsville Savings' capital levels at September 30, 1997, qualify it
as a "well-capitalized" institution, the highest of five tiers under applicable
federal definitions.
QUALIFIED THRIFT LENDER TEST
- --------------------------------------------------------------------------------
Savings associations insured by the Savings Association Insurance Fund
of the Federal Deposit Insurance Corporation (FDIC) are required to maintain 65%
of total portfolio assets in Qualified Thrift Investments. As of September 30,
1997, the Bank had 84.26% of total assets invested in Qualified Thrift
Investments.
17
19
ASSET QUALITY
- --------------------------------------------------------------------------------
Table 3 sets forth information regarding non-performing assets at
September 30, 1997, December 31, 1996, and September 30, 1996.
- ------------------------------------------------------------------------------------------------------------
TABLE 3
NON-PERFORMING ASSETS ANALYSIS
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1997 1996 1996
- ------------------------------------------------------------------------------------------------------------
(Dollars In thousands)
NON-ACCRUING LOANS
1-4 family - permanent $ 217 $ 600 $ 247
1-4 family - construction 413 - -
Multi-family and Commercial
real estate - - -
Land and development - - -
Commercial non-real estate 370 - 69
Consumer and other 26 5 16
- ------------------------------------------------------------------------------------------------------------
Total 1,026 605 332
LOANS DELINQUENT 90 DAYS OR MORE
AND STILL ACCRUING
1-4 family - permanent 439 682 1,225
1-4 family - construction - 412 625
Multi-family and Commercial
real estate - - -
Land and development - - -
Commercial non-real estate - - -
Consumer and other - - 2
- ------------------------------------------------------------------------------------------------------------
Total 439 1,094 1,852
Total non-performing loans 1,465 1,699 2,184
Real estate owned - - 117
- ------------------------------------------------------------------------------------------------------------
Total non-performing assets $ 1,465 $ 1,699 $ 2,301
============================================================================================================
Allowances for loan losses $ 1,687 $ 1,423 $ 1,437
============================================================================================================
Non-performing loans to total loans-net 0.31% 0.40% 0.51%
Non-performing assets to total assets 0.24% 0.30% 0.42%
Allowance for loan losses to ending
loan balance (before allowance) 0.36% 0.33% 0.34%
Allowance for loan losses to
non-performing loans 115.13% 83.76% 65.79%
- ------------------------------------------------------------------------------------------------------------
18
20
Table 4 presents information concerning activity in the allowance for
loan losses during the three and nine month periods ended September 30, 1997 and
1996.
- -----------------------------------------------------------------------------------------------------------------------------------
TABLE 4
ACTIVITY IN THE ALLOWANCE FOR LOAN LOSSES
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
- -----------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
Allowance at the beginning of the period $ 1,577 $ 1,170 $ 1,423 $ 1,168
Provision charged to expense 108 285 277 313
Charge-offs:
- ------------
1-4 family - permanent - - 5 -
1-4 family - construction - - - -
Multi-family and Commercial
real estate - - - -
Land and development - - - -
Commercial non-real estate - - - -
Consumer and other - 22 19 49
- --------------------------------------------------------------------------------------------------------------------------------
- 22 24 49
Recoveries
- ----------
1-4 family - permanent - - - -
1-4 family - construction - - - -
Multi-family and Commercial
real estate - - - -
Land and development - - - -
Commercial non-real estate - - - -
Consumer and other 2 4 11 5
- --------------------------------------------------------------------------------------------------------------------------------
2 4 11 5
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Net recoveries (charge-offs) 2 (18) (13) (44)
- --------------------------------------------------------------------------------------------------------------------------------
Allowance at the end of the period $ 1,687 $ 1,437 $ 1,687 $ 1,437
================================================================================================================================
Net charge-offs during the period to average
loans outstanding during the period
(Annualized) 0.00% -0.02% 0.00% -0.02%
- ---------------------------------------------------------------------------------------------------------------------------------
The amount of the allowance for loan losses is based on
management's analysis of risks inherent in the various segments of the loan
portfolio, management's assessment of known or potential problem credits which
have come to management's attention during the ongoing analysis of credit
quality, historical loss experience, current economic conditions, and other
factors. Loan loss estimates are reviewed periodically, and adjustments, if any,
are reported in earnings in the period in which they become known.
19
21
TABLE A
Table A sets forth the composition of the Bank's loan portfolio at
September 30, 1997, December 31, 1996, and September 30, 1996.
- ------------------------------------------------------------------------------------------------------------------------------------
LOAN PORTFOLIO COMPOSITION
SEPTEMBER 30, 1997 DECEMBER 31, 1996 SEPTEMBER 30, 1996
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
- ------------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE MORTGAGE LOANS: (Dollars In thousands)
Permanent first mortgage
loans:
1-4 family $ 322,003 69.01% $ 301,284 70.88% $ 302,293 71.68%
Multi-family 959 0.21% 1,049 0.25% 1,079 0.26%
Commercial real estate 53,026 11.36% 46,883 11.03% 42,936 10.18%
Land 376 0.08% 195 0.05% 289 0.07%
Construction first mortgage loans:
Residential development 62,262 13.33% 54,670 12.85% 55,379 13.12%
1-4 family 41,135 8.82% 37,049 8.72% 38,426 9.11%
Multi-family 1,720 0.37% 240 0.06% 680 0.16%
Commercial real estate 5,983 1.29% 2,376 0.56% 5,949 1.42%
- -----------------------------------------------------------------------------------------------------------------------------------
Total mortgage loans 487,464 104.47% 443,746 104.40% 447,031 106.00%
OTHER LOANS
Commercial 4,854 1.04% 4,250 1.00% 3,997 0.95%
Consumer 13,902 2.98% 9,118 2.14% 8,764 2.08%
- -----------------------------------------------------------------------------------------------------------------------------------
Total other loans 18,756 4.02% 13,368 3.14% 12,761 3.03%
- -----------------------------------------------------------------------------------------------------------------------------------
Total loans 506,220 108.49% 457,114 107.54% 459,792 109.03%
Less:
Loans in process 34,310 7.35% 26,676 6.28% 32,323 7.65%
Allowance for loan losses 1,687 0.36% 1,423 0.33% 1,437 0.34%
Deferred yield items 3,624 0.78% 3,955 0.93% 4,334 1.03%
- -----------------------------------------------------------------------------------------------------------------------------------
39,621 8.49% 32,054 7.54% 38,094 9.03%
- -----------------------------------------------------------------------------------------------------------------------------------
Total loans held for investment-Net $ 466,599 100.00% $ 425,060 100.00% $ 421,698 100.00%
===================================================================================================================================
Real estate loans held for sale $ 2,649 $ 795 $ 4,805
===================================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
20
22
TABLE B
Table B sets forth the activities in the Bank's loan portfolio
for the three and nine month periods ended September 30, 1997, and 1996.
- ------------------------------------------------------------------------------------------------------------------------------------
ACTIVITY IN THE LOAN PORTFOLIO
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
(In thousands)
PERMANENT MORTGAGE LOAN ORIGINATIONS
1-4 family $ 30,276 $ 33,726 $ 75,205 $ 123,156
Multi-family - - - -
Commercial real estate 926 1,643 3,555 4,408
Land 128 575 373 575
- ------------------------------------------------------------------------------------------------------------------------------------
31,330 35,944 79,133 128,139
CONSTRUCTION FIRST MORTGAGE LOAN ORIGINATIONS
Residential development 17,677 9,417 36,293 35,897
1-4 family 10,487 10,695 35,788 36,623
Multi-family 670 - 670 -
Commercial real estate 5,250 1,054 6,893 2,479
- ------------------------------------------------------------------------------------------------------------------------------------
34,084 21,166 79,644 74,999
NONMORTGAGE LOANS
Commercial 555 430 2,238 1,604
Consumer 4,414 1,314 15,552 2,784
- ------------------------------------------------------------------------------------------------------------------------------------
4,969 1,744 17,790 4,388
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL LOAN ORIGINATIONS 70,383 58,854 176,567 207,526
PURCHASED LOANS
Commercial real estate 500 1,650 4,922 1,650
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NEW LOANS 70,883 60,504 181,489 209,176
LESS
Principal repayments 33,719 33,141 94,181 89,217
Loan sales 15,882 11,696 36,327 20,042
- ------------------------------------------------------------------------------------------------------------------------------------
49,601 44,837 130,508 109,259
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN LOANS $ 21,282 $ 15,667 $ 50,981 $ 99,917
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
21
23
TABLE C
Table C sets forth the composition of the Bank's deposits by interest
rate category at September 30, 1997, December 31, 1996, and September 30, 1996.
- ------------------------------------------------------------------------------------------------------------------------------------
DEPOSIT COMPOSITION
-----------------------------------------------------------------------------------------------------
SEPTEMBER 30, 1997 DECEMBER 31, 1996 SEPTEMBER 30, 1996
WTD AVG WTD AVG WTD AVG
COST AMOUNT PERCENT COST AMOUNT PERCENT COST AMOUNT PERCENT
- ------------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
PASSBOOK ACCOUNTS 2.90% $ 50,674 9.69% 2.90% $ 46,034 9.33% 2.89% $ 46,668 9.83%
NOW ACCOUNTS 1.98% 31,138 5.96% 2.02% 29,661 6.01% 2.02% 27,858 5.87%
MONEY MARKET DEPOSIT ACCOUNTS 2.53% 15,845 3.03% 2.53% 17,882 3.62% 2.53% 18,646 3.93%
COMMERCIAL ACCOUNTS 0.00% 11,280 2.16% 0.00% 11,535 2.34% 0.00% 10,231 2.16%
- -----------------------------------------------------------------------------------------------------------------------------------
2.28% 108,937 20.84% 2.27% 105,112 21.30% 2.30% 103,403 21.79%
CERTIFICATES OF DEPOSIT:
4.50% and less 2.52% 972 0.19% 2.54% 1,849 0.37% 2.55% 2,063 0.43%
4.51% to 5.50% 5.28% 86,388 16.53% 5.34% 116,857 23.68% 5.37% 120,555 25.41%
5.51% to 6.50% 6.04% 255,016 48.79% 6.03% 187,013 37.90% 6.02% 163,925 34.54%
6.51% to 7.50% 7.34% 63,284 12.11% 7.33% 73,823 14.96% 7.31% 75,512 15.91%
7.51% and greater 8.91% 8,060 1.54% 8.86% 8,817 1.79% 8.84% 9,103 1.92%
- -----------------------------------------------------------------------------------------------------------------------------------
6.13% 413,720 79.16% 6.11% 388,359 78.70% 6.12% 371,158 78.21%
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS 5.33% $ 522,657 100.00% 5.29% $ 493,471 100.00% 5.29% $474,561 100.00%
===================================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TABLE D
Table D sets forth the remaining terms to maturity for the certificates
of deposit at September 30, 1997.
CERTIFICATES OF DEPOSIT MATURING DURING:
(In Thousands)
The year ending September 30, 1998 $ 276,473
The year ending September 30, 1999 53,948
The year ending September 30, 2000 38,617
The year ending September 30, 2001 7,194
The year ending September 30, 2002 5,018
After September 30, 2002 32,470
- -------------------------------------------------------------
$ 413,720
=============================================================
22
24
PART II
ITEM 4 Submission of Matters to a Vote of Security Holders
----------------------------------------------------
There were no matters submitted to a vote of security holders
during the quarter ended September 30, 1997.
ITEM 5 Exhibits and Reports on Form 8-K
---------------------------------
(a) Not applicable
(b) The Company filed one Form 8-K during the quarter. The
Company filed Form 8-K on September 23, 1997 to report a
change in the Company's certifying accountants.
23
25
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.
EMERALD FINANCIAL CORP.
-----------------------
(Registrant)
Date November 3, 1997 /s/ THOMAS P. PERCIAK .
---------------- --------------------------------
Thomas P. Perciak,
President & Chief Executive Officer
Date November 3, 1997 /s/ JOHN F. ZIEGLER .
---------------- -----------------------------------
John F. Ziegler,
Executive Vice President &
Chief Financial Officer