1
FORM 10-Q -- QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 34-26589, eff. 4/12/89)
United States Securities and Exchange Commission
FORM 10-Q
(MARK ONE)
[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934.
For the period ended September 30, 1998
----------------------------------------------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934.
For the transition period from to
------------- -------------
Commission File Number: 0-13655
-------------------------------------------------
Security Banc Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 31-1133284
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
40 South Limestone Street, Springfield, OH 45502
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(937) 324-6920
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
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.
X Yes No
----- -----
Indicate the number of shares outstanding of each of the registrant's classes of
common stock.
Class Outstanding at Oct. 15, 1998
- ------------------------------- ----------------------------
Common Stock, $1.5625 Par Value 12,152,364
2
SECURITY BANC CORPORATION AND SUBSIDIARIES
INDEX
PAGE NO.
--------
Part I - Financial Information
Item 1 - Financial Statements:
Consolidated Condensed Balance Sheets Sept. 30, 1998
and December 31, l997. 3
Consolidated Condensed Statements of Income for the
three (3) months ended Sept. 30, 1998 and Sept. 30, 1997. 4
Consolidated Condensed Statement of Income for the nine
(9) months ended Sept. 30, 1998 and Sept. 30, 1997. 5
Consolidated Condensed Statements of Cash Flows for the
nine (9) months ended Sept. 30, 1998 and Sept. 30, 1997. 6
Consolidated Condensed Statements of Shareholders Equity for
the nine (9) months ended Sept. 30, 1997 and Sept. 30, 1998. 7
Notes to Consolidated Condensed Financial Statements. 8
Item 2 - Management's Discussion and Analysis of Condition and
Results of Operations 9-15
Part II - Other Information 16
Signature 17
-2-
3
PART I ITEM 1 - FINANCIAL STATEMENTS
SECURITY BANC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
Sept. 30 Dec 31
1998 1997
---- ----
(in thousands)
ASSETS
Cash and due from banks $ 29,370 $ 33,043
Federal funds sold 21,525 52,655
-------- --------
TOTAL CASH AND CASH EQUIVALENT 50,895 85,698
-------- --------
Interest bearing deposits with other banks 2,700 2,700
Investments (Market Value $143,490 @9-30-98,
$149,531 @ 12-31-97) 143,226 149,179
Loans: Commercial and agricultural 276,618 252,053
Real estate and mortgage 246,592 225,791
Consumer 80,823 84,161
-------- --------
TOTAL LOANS 604,033 562,005
Less: Allowance for Loan Losses 6,972 6,254
-------- --------
NET LOANS 597,061 555,751
Premises and Equipment 9,268 8,658
Other Assets 37,936 37,619
-------- --------
TOTAL ASSETS $841,086 $839,605
======== ========
LIABILITIES
Non-interest bearing deposits $120,008 $119,373
Interest bearing demand deposits 134,704 129,351
Savings deposits 154,195 151,119
Time deposits, $100,000 and over 46,503 41,745
Other time deposits 227,201 235,803
-------- --------
TOTAL DEPOSITS 682,611 677,391
Fed funds purchased and securities sold
under agreement to repurchase 32,154 30,746
Federal Home Loan Bank Term Advances 5,732 16,333
Other liabilities 4,392 6,399
-------- --------
TOTAL LIABILITIES $724,889 $730,869
-------- --------
SHAREHOLDERS'S EQUITY
Common Stock (Par Value $1.5625) $ 19,743 $ 19,707
Shares authorized 18,000,000
Shares issued 12,635,712 - 1998
12,600,082 - 1997
Surplus 21,993 21,831
Retained earnings 77,380 70,149
Accumulated other comprehensive income 353 242
Less: Treasury Stock, 483,348 shares 3,272 3,193
-------- --------
TOTAL SHAREHOLDERS' EQUITY 116,197 108,736
-------- --------
TOTAL LIABILITIES &
SHAREHOLDER'S EQUITY $841,086 $839,605
======== ========
See notes to Consolidated Condensed Financial Statements
-3-
4
PART 1 ITEM 1 - FINANCIAL STATEMENTS
SECURITY BANC CORPORATION
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(UNAUDITED)
Three Months Ended
September 30 September 30
1998 1997
---- ----
(in thousands except
per share data)
Interest Income $16,172 $15,830
Interest Expense 6,107 6,235
------- -------
NET INTEREST INCOME 10,065 9,595
Provision for loan losses 870 700
------- -------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 9,195 8,895
OTHER OPERATING INCOME
Trust Income 435 384
Service charges on deposit accounts 798 794
Securities, Gains (Losses) 247 108
Other charges, rents and fees 764 694
------- -------
TOTAL OTHER OPERATING INCOME 2,244 1,980
OPERATING EXPENSES
Salaries and employee benefits 2,778 2,725
Equipment and occupancy expense 704 719
Other operating expense 2,288 2,383
------- -------
TOTAL OPERATING EXPENSE 5,770 5,827
INCOME BEFORE TAXES 5,669 5,048
Income taxes (See Note B) 1,971 1,554
------- -------
NET INCOME $ 3,698 $ 3,494
======= =======
Basic earnings per share $ .30 $ .29
Diluted earnings per share $ .30 $ .29
Cash dividends per share $ .12 $ .105
Weighted average shares outstanding 12,145,656 12,118,350
See notes to Consolidated Condensed Financial Statements.
-4-
5
SECURITY BANC CORPORATION
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(UNAUDITED)
Nine Months Ended
September 30, September 30,
1998 1997
---- ----
(in thousands except
per share data)
Interest Income $47,894 $46,820
Interest Expense 18,141 18,728
------- -------
NET INTEREST INCOME 29,753 28,092
Provision for loan losses 1,270 1,100
------- -------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 28,483 26,992
OTHER OPERATING INCOME
Trust Income 1,221 1,151
Service charges on deposit accounts 2,357 2,128
Securities, Gains (Losses) 333 213
Other charges, rents and fees 2,239 1,687
------- -------
TOTAL OTHER OPERATING INCOME 6,150 5,179
OPERATING EXPENSES
Salaries and employee benefits 8,377 8,164
Equipment and occupancy expense 2,043 2,083
Other operating expense 6,813 6,794
------- -------
TOTAL OPERATING EXPENSE 17,233 17,041
INCOME BEFORE TAXES 17,400 15,130
Income taxes (See Note B) 5,981 4,637
------- -------
NET INCOME $11,419 $10,493
======= =======
Basic earning per share $ .94 $ .87
Diluted earnings per share $ .93 $ .86
Cash dividends per share $ .345 $ .315
Weighted average shares outstanding 12,138,657 12,115,076
See notes to Consolidated Condensed Financial Statements.
-5-
6
PART 1 ITEM 1 - FINANCIAL STATEMENTS
SECURITY BANC CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Sept. 30 Sept. 30
1998 1997
---- ----
(IN THOUSANDS)
--------------
Cash Flows from Operating Activities:
Net Income $ 11,419 $ 10,493
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 811 777
(Gain)/Loss on sale of the following:
Investment Securities available for sale (333) (221)
Other Assets (27) (103)
Provision for loan losses 1,270 1,100
Amortization and accretion, net (341) (19)
Amortization and core deposit intangible 506 592
Change in other operating assets and liabilities, net (16,914) (13,669)
-------- ---------
Total Adjustments (15,028) (11,543)
-------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ (3,609) $ (1,050)
Cash Flows From Investing Activities:
Net increase in interest bearing deposits with other banks 0 4,035
Proceeds from maturities and sales of Investment securities
available for sale 98,091 187,529
Proceeds from maturities of Investments held to maturity 8,859 12,366
Purchase of:
Investment securities available for sale (94,430) (159,705)
Investment securities held to maturity (5,850) (722)
Increase in loans (42,326) (16,303)
Proceeds from sale of other assets 15,797 5,694
Capital expenditures (1,418) (767)
Net cash used in acquisition 0 (1,302)
Purchase of insurance policies (1,876) 0
-------- ---------
NET CASH USED IN INVESTING ACTIVITIES (23,153) 30,825
Cash Flows from Financing Activities:
Net increase in demand deposits, NOW accounts and
savings accounts 9,064 (638)
Net decrease in certificates of deposit (3,844) (9,115)
Net decrease in short-term borrowed funds (9,192) (5,952)
Net purchase and sale of treasury stock (79) 0
Dividends paid (4,188) (3,816)
Proceeds from exercise of stock options 198 143
-------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES (8,041) (19,378)
Net decrease in cash and cash equivalents (34,803) 10,397
Cash and cash equivalents at beginning of year 85,698 49,827
-------- ---------
Cash and cash equivalents at September 30 $ 50,895 $ 60,224
See Notes to Consolidated Financial Statements.
-6-
7
SECURITY BANC CORORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY (UNAUDITED)
Accumulated
Treasury Other
Common Retained Stock Comprehensive Comprehensive
(dollars in thousands, except per share amounts) Stock Surplus Earnings at Cost Income Income
====================================================================================================================================
BALANCE AT DECEMBER 31, 1996 $19,658 $21,670 $62,557 $(3,193) $102
Net Income 10,493 10,493
Other comprehensive income:
Net unrealized gains on securities available for sale
net of income taxes of $65 121 121
------
Total comprehensive income 10,614
======
Dividend distributions (5,119)
Exercise of stock options 30 114
====================================================================================================================================
BALANCE AT SEPTEMBER 30, 1997 19,688 21,784 67,931 (3,193) 223
====================================================================================================================================
BALANCE AT DECEMBER 31, 1997 19,707 21,831 70,149 (3,193) 242
Net Income 11,419 11,419
Other comprehensive income:
Net unrealized gains on securities available for sale
net of income taxes of $60 111 111
------
Total comprehensive income 11,530
======
Cash dividends on Common Shares ($.345 per share) (4,188)
Exercise of stock options 36 162
Purchase of Treasury Stock (79)
====================================================================================================================================
BALANCE AT SEPTEMBER 30, 1998 19,743 21,993 77,380 (3,272) 353
====================================================================================================================================
See Notes to Consolidated Financial Statements (Unaudited)
-7-
8
SECURITY BANC CORPORATION
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A -- Preparation
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments consisting of normal re-occurring items necessary to
present fairly the financial condition of the company as of Sept. 30, 1998 and
the results of operations and cash flows for the nine month periods ended Sept..
30, 1998 and Sept. 30, 1997.
NOTE B - TAXES
The effective tax rate of 34% is lower than the statutory 35% because of
investments made in tax exempt municipal securities. The subsidiaries of
Security Banc Corporation have approximately $11,079,000 invested in tax exempt
municipal securities.
NOTE C - SFAS No. 130
As of January 1, 1998, Security Banc Corporation adopted Statement of Financial
Accounting Standard ("SFAS") No. 130, "Reporting Comprehensive Income". SFAS No.
130 establishes reporting and display standards for comprehensive income and its
components in a full set of general purpose financial statements. Comprehensive
income is defined as the change in equity of a business enterprise during a
period from transactions and other events and circumstances arising from
non-owner sources. The new statement requires Security's unrealized gains or
losses on securities available-for-sale, which prior to adoption were reported
as a separate component of shareholder's equity, to be included in other
comprehensive income. Since SFAS No. 130 only requires additional information,
it had no impact on Security's financial position or results of operation. Prior
year financial statements have been reclassified to conform with the new
requirements. Comprehensive income is presented in the Statement of Changes in
Shareholders' Equity on page 6.
NOTE D - Common Share Information
All common share information is adjusted for the 2-for-1 stock split effective
May 29, 1998.
8
9
PART 1 ITEM 2
SECURITY BANC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected the Registrant's financial condition and results of
operations during the periods included in the consolidated financial statements
enclosed with this filing.
ECONOMIC OUTLOOK
Through the first three quarters of 1998 the U. S. economy continued to perform
well. Unemployment remained at 4.6% nationally and inflation continued to be
almost non-existent at 1.6%. Consumer spending, which accounts for two-thirds of
the total economy, remained strong. Consumer credit continued to grow as
spending outpaced income in recent months. Automobile sales increased during
September as manufacturers offered discounts. The housing market maintained its
momentum as rates remained low. Overall, the year to date results have been very
good.
Looking into the future, it is difficult to see positive trends. As the global
economic crisis has taken hold, its affect on the domestic front is beginning to
show. Instability in the stock market has caused concern resulting in a steady
decline in consumer confidence. A combination of slower exports and consumer
spending could push the economy into its first recession since the early
nineties. In these uncertain times, foreign and domestic economic policy play a
large role in the outcome for the local and national economies. While a slowdown
can be taken in stride, a long term recession could be difficult to handle.
On the local scene there is confirmation of slowing activities. Sales levels and
profit margins are beginning to feel downward pressure while the unemployment
rate has increased slightly. The majority of our business customers are
experiencing this moderation in activity.
YEAR 2000
The federal government established guidelines and timetables for banks to follow
in order to reach compliance in an efficient manner, and Security Banc
Corporation is adhering to those standards. We are following the federal
government's five step Y2K plan: awareness, assessment, renovation,
implementation and validation. Security Banc Corporation began its first stage
in August, 1997 and is currently in the renovation phase, which include hardware
and software upgrades, vendor certification, and modification of any
non-compliant systems.
The Information Technology Association of America (ITAA), a trade organization,
has certified the Bank's account information system, which indicates the system
has the "core capabilities needed to handle the Year 2000 challenge."
Security Banc Corporation has established a $100,000 budget for renovation and
for the purchase of new Y2K compliant products. We feel that this will cover any
expenses in our Y2K effort.
Security Banc Corporation has also established a risk assessment list of all of
our mission critical vendors. This list is updated weekly and is presented to
the Corporate Y2K committee for their review.
Contingency plans have also been developed by the Security Banc Corporation's
Year 2000 Committee for each of these mission critical vendors.
-9-
10
RESULTS OF OPERATIONS
Net income was $11,419,000 for the first nine months of 1998, compared to
$10,493,000 for the same period in 1997. Basic earnings per share were $.94 for
the first nine months, an 8% increase over last year's $.87. Diluted earnings
per share were $.93 for the first nine months, a 9% increase over last year's
$.86.
Total assets were $841,086,000 at September 30, 1998 compared to 1997's assets
of $807,385,000. For the first nine months of 1998, return on average equity was
13.48% and return on average assets was 1.81%.
Interest and fees on loans increased to $39,501,000 for the nine months ended
September 30, 1998 compared to $37,257,000 for the nine months ending September
30, 1997. Average loans were $577,730,000 and $547,742,000 at September 30, 1998
and 1997 respectively, a 5% increase.
Income from securities decreased to $6,137,000 from $8,475,000 for the nine
months ended September 30, 1998 and 1997 respectively. The decrease occurred
primarily because of municipal obligations maturing or being called over the
last year. The average outstanding for securities were $139,979,000 and
$189,280,000 at September 30, 1998 and 1997 respectively, a 26% decrease.
Interest income from Fed Funds sold and other interest bearing assets increased
to $2,256,000 at September 30, 1998 compared to $1,088,000 for the nine months
ended September 30, 1997. The average outstanding for Fed Funds and interest
bearing deposits were $52,926,000 and $26,394,000 at September 30, 1998 and 1997
respectively, a 101% increase.
Interest bearing liabilities average outstanding at September 30, 1998 were
$601,724,000 compared to $608,499,000 at September 30, 1997. Interest expense
decreased to $18,141,000 at September 30, 1998 from $18,728,000 at September 30,
1997, a 3% decrease.
Net interest income on a fully taxable equivalent basis for the first nine
months of 1998 was $30,012,000 compared to the $28,800,000 realized in the same
period of 1997.
Market value per share was $38.50 at September 30, 1998 as compared to $25.25 at
September 30, 1997. Book value per share was $9.56 at September 30, 1998 and
$8.78 at September 30, 1997. The efficiency ratio was 47% and 50% respectively
for September 30, 1998 and September 30, 1997.
-10-
11
PART 1 ITEM 2 (CONT'D.)
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
For Period Ending September 30
1998 (000's) 1997
---- ----
Balance at beginning of period 6,254 6,827
Charge-offs:
Domestic:
Commercial, financial and agriculture (666) (951)
Real estate -- construction 0 0
Real estate - mortgage (288) 0
Installment loans to individuals (738) (871)
Lease financing 0 0
------- -------
(1,692) (1,822)
Recoveries:
Domestic:
Commercial, financial and agriculture 823 46
Real estate -- construction 0 0
Real estate -- mortgage 69 13
Installment loans to individuals 248 179
Lease financing 0 0
------- -------
1,140 238
Net charge-offs (552) (1,584)
Additions charged to operations 1,270 1,100
------- -------
Balance at end of period $ 6,972 $ 6,343
Ratio of net charge-offs during the period of average loans
outstanding during the period (.10%) (.29%)
Beginning in 1995, the Company adopted Financial Accounting Standards Board
Statement No. 114, "Accounting by Creditors for Impairment of a Loan". Under the
new standard, the allowance for credit losses related to loans that are
identified for evaluation in accordance with Statement 114 is based on
discounted cash flows using the loan's initial effective interest rate or the
fair value of the collateral for certain collateral dependent loans. Prior to
1995, the allowance for credit losses related to these loans was based on
undiscounted cash flows or the fair value of the collateral for collateral
dependent loans. The following table presents data concerning loans at risk at
the end of each period. (000s).
December 31
Sept. 30, ---------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Non-accrual loans $1,140 $3,417 $4,123 $2,772 $2,598
Accruing loans past due
90 days or more 786 1,537 1,709 1,543 561
Restructured loans 325 333 0 0 0
Other real estate owned 1,531 258 256 0 0
Total other operating income was $6,150,000 and $5,179,000 during the first nine
months of 1998 and 1997 respectively. Trust income increased 6%. There was an
11% increase in service charges on deposits, and a 33% increase in other
charges, rents and fees. Total securities gains for the first nine months of
1998 were $333,000 or $216,000 after tax. Total securities gains for the same
period of 1997 were $213,000 or $138,000 after tax.
-11-
12
PART 1 ITEM 2 - PAGE 2
SECURITY BANC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Total operating expenses increased $192,000 during the first nine months, 1%
over the similar period of 1997. Salaries, wages and employee benefits increased
3% over 1997. Equipment and net occupancy expenses during the first nine months
were $2,043,000 and $2,083,000 for 1998 and 1997 respectively, which reflects a
2% decrease. Other operating expenses increased $19,000 compared to 1997.
The Corporation continues to look for opportunities to maximize Other Income and
reduce Other Expense, thus enhancing the efficiency ratio.
MATERIAL CHANGES IN FINANCIAL CONDITION
- ---------------------------------------
The material changes (5% or greater) on the consolidated condensed balance
sheets are:
Cash and due from Banks - (decrease of 11%) because of decrease in cash letter
settlement.
Federal Funds Sold - (decrease of 59%) because of increased loan demand.
Commercial and Agricultural Loans - (increase of 10%) because of strong local
economy and loan officer activity.
Real Estate and Mortgage Loans - (increase of 9%) due to refinancing and
favorable rates.
Allowance for Loan Loss - (increase of 11%) due to increase in provision.
Premises and Equipment - (increase of 7%) because of capital expenditures
exceeding depreciation.
Time Deposits, $100,000 and over - (increase of 11%) due to increase of public
fund money.
FHLB Advances - (decrease of 62%) because the subsidiaries of the Corporation
are selling and buying overnight Fed Funds from each other reducing the need to
borrow externally.
Other Liabilities - (decrease 31%) due to decrease in deferred taxes and FIT
payable.
CAPITAL RESOURCES
- -----------------
The table below illustrates the Company's subsidiary banks regulatory capital
ratios at Sept. 30, 1998 under the year end 1992 requirements: (000s)
Tier 1 Capital $103,688
Tier 2 Capital 6,972
--------
TOTAL QUALIFYING CAPITAL $110,660
--------
Risk Adjusted Total Assets (including off balance exposures) $582,325
========
Tier 1 Risk-Based Capital Ratio 17.81%
Total Risk-Based Capital Ratio 19.00%
Tier 1 Leverage Ratio 12.39%
LIQUIDITY
- ---------
The subsidiaries of the Corporation Static Gap analysis is presented on pages
12, 13, and 14.
-12-
13
THIRD SAVINGS "NEXT FOUR QUARTERS"
ASSET/LIABILITY MANAGEMENT
STATIC GAP ANALYSIS (000S)
IMMEDIATELY
ADJUSTABLE END OF 12/98 END OF 3/99 END OF 6/99 END OF 9/99
RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE
Total Investment Securities 1,382 6.30% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Short Term Investment 2,250 5.24% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Net Loans 23,923 9.61% 8,826 8.33% 8,476 8.41% 13,265 8.14% 10,742 8.26%
Total Earning Assets 27,555 9.08% 8,826 8.33% 8,476 8.41% 13,265 8.14% 10,742 8.26%
Total Non-Earning Assets 328 9.73% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Assets 27,882 9.09% 8,826 8.33% 8,476 8.41% 13,265 8.14% 10,742 8.26%
Total Noninterest Bearing Deposits 0 0.00% 2,973 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Interest Bearing Deposits 2,036 5.75% 12,607 5.37% 11,205 5.41% 14,750 5.64% 18,012 5.54%
Total Deposits 2,036 5.75% 15,580 4.35% 11,205 5.41% 14,750 5.64% 18,012 5.54%
Total Other Interest Bearing Liabilities 14,000 5.36% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Other Liabilities 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities 16,036 5.41% 15,580 4.35% 11,205 5.41% 14,750 5.64% 18,012 5.54%
Total Equity Capital 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities and Capital 16,036 5.41% 15,580 4.35% 11,205 5.41% 14,750 5.64% 18,012 5.54%
Interval GAP 11,847 (6,754) (2,729) (1,485) (7,270)
Cumulative GAP 11,847 5,093 2,364 879 (6,391)
Interval GAP/Total Assets 7.07% (4.03%) (1.63%) (0.89%) (4.34%)
Cumulative GAP/Total Assets 7.07% 3.04% 1.41% 0.52% (3.82%)
Interval GAP/Earning Assets 7.73% (2.54%) (1.83%) (1.00%) (4.88%)
Cumulative GAP/Earning Assets 7.73% 5.19% 3.36% 2.36% (2.51%)
Interval Spread: Earning Assets 3.67% 2.96% 2.99% 2.50% 2.72%
Interval Spread: Total Assets 3.68% 3.98% 2.99% 2.50% 2.72%
-13-
14
SECURITY NATIONAL "NEXT FOUR QUARTERS"
ASSET/LIABILITY MANAGEMENT
STATIC GAP ANALYSIS (000S)
IMMEDIATELY
ADJUSTABLE END OF 12/98 END OF 3/99 END OF 6/99 END OF 9/99
RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE
Total Investment Securities 51 5.44% 20,229 5.90% 5,000 5.50% 0 0.00% 25,000 5.82%
Total Short Term Investment 24,300 5.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Net Loans 61,596 8.49% 31,218 9.05% 27,170 8.90% 20,418 9.09% 19,115 8.91%
Total Earning Assets 85,947 7.50% 51,447 7.81% 32,170 8.37% 20,418 9.09% 44,115 7.16%
Total Non-Earning Assets 1,301 9.46% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Assets 87,248 7.53% 51,447 7.81% 32,170 8.37% 20,418 9.09% 44,115 7.16%
Total Noninterest Bearing Deposits 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Interest Bearing Deposits 4,988 4.19% 25,339 4.65% 73,517 4.14% 63,881 4.12% 46,159 3.54%
Total Deposits 4,988 4.19% 25,339 4.65% 73,517 4.14% 63,881 4.12% 46,159 3.54%
Total Other Interest Bearing Liabilities 30,030 4.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Other Liabilities 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities 35,018 4.03% 25,339 4.65% 73,517 4.14% 63,881 4.12% 46,159 3.54%
Total Equity Capital 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities and Capital 35,018 4.03% 25,339 4.65% 73,517 4.14% 63,881 4.12% 46,159 3.54%
Interval GAP 52,230 26,108 (41,348) (43,464) (2,044)
Cumulative GAP 52,230 78,338 36,990 (6,474) (8,518)
Interval GAP/Total Assets 9.42% 4.71% (7.46%) (7.84%) (0.37%)
Cumulative GAP/Total Assets 9.42% 14.13% 6.67% (1.17%) (1.54%)
Interval GAP/ Earning Assets 9.75% 5.08% (8.04%) (8.45%) (0.40%)
Cumulative GAP/Earning Assets 9.75% 14.82% 6.78% (1.67%) (2.07%)
Interval Spread: Earning Assets 3.55% 3.15% 4.23% 4.97% 3.62%
Interval Spread: Total Assets 3.50% 3.15% 4.23% 4.97% 3.62%
-14-
15
CITIZENS NATIONAL "NEXT FOUR QUARTERS"
ASSET/LIABILITY MANAGEMENT
STATIC GAP ANALYSIS (000S)
IMMEDIATELY
ADJUSTABLE END OF 12/98 END OF 3/99 END OF 6/99 END OF 9/99
RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE RUNOFFS RATE
Total Investment Securities 500 4.88% 7,782 5.79% 5,400 5.27% 2,500 5.99% 2,510 5.98%
Total Short Term Investment 4,325 5.50% 500 6.51% 2,200 6.00% 0 0.00% 0 0.00%
Net Loans 14,414 9.48% 4,577 8.36% 9,536 8.27% 2,039 8.50% 9,079 8.15%
Total Earning Assets 19,239 8.47% 12,859 6.73% 17,136 7.03% 4,539 7.12% 11,589 7.68%
Total Non-Earning Assets 763 8.54% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Assets 20,002 8.47% 12,859 6.73% 17,136 7.03% 4,539 7.12% 11,589 7.68%
Total Noninterest Bearing Deposits 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Interest Bearing Deposits 0 0.00% 34,179 2.92% 6,253 4.94% 5,166 5.02% 32,127 3.08%
Total Deposits 0 0.00% 34,179 2.92% 6,253 4.94% 5,166 5.02% 32,127 3.08%
Total Other Interest Bearing Liabilities 326 5.25% 153 2.96% 0 0.00% 0 0.00% 0 0.00%
Total Other Liabilities 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities 326 5.25% 34,331 2.92% 6,253 4.94% 5,166 5.02% 32,127 3.08%
Total Equity Capital 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities and Capital 326 5.25% 34,331 2.92% 6,253 4.94% 5,166 5.02% 32,127 3.08%
Interval GAP 19,676 (21,472) 10,883 (627) (20,539)
Cumulative GAP 19,676 (1,797) 9,087 8,459 (12,079)
Interval GAP/Total Assets 14.46% (15.78%) 8.00% (0.46%) (15.09%)
Cumulative GAP/Total Assets 14.46% (1.32%) 6.68% 6.22% (8.88%)
Interval GAP/Earning Assets 15.35% (17.51%) 8.84% (0.51%) (16.67%)
Cumulative GAP/Earning Assets 15.35% (2.16%) 6.68% 6.17% (10.50%)
Interval Spread: Earning Assets 3.22% 3.87% 2.10% 2.10% 4.60%
Interval Spread: Total Assets 3.22% 3.82% 2.10% 2.10% 4.60%
-15-
16
SECURITY BANC CORPORATION
PART II - OTHER INFORMATION
ITEM 1 Legal Proceedings Inapplicable
ITEM 2 Changes in Securities Inapplicable
ITEM 3 Defaults upon Senior Securities Inapplicable
ITEM 4 Submission of Matters to a Vote of Security Holders Inapplicable
ITEM 5 Other Information Inapplicable
ITEM 6 Exhibits and Reports on Form 8-K
27 - Financial Data Schedule
No reports on Form 8K have been filed during the
quarter for which this report is filed.
-16-
17
SECURITY BANC CORPORATION
SIGNATURE
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.
SECURITY BANC CORPORATION
By /s/ Thomas L. Miller
-------------------------------------
Thomas L. Miller
Vice President/Controller
By /s/ J. William Stapleton
-------------------------------------
J. William Stapleton
Executive Vice President/CFO
November 6, 1998
-17-