UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 March 31, 1996
or
--
/_/ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-17912
FIRST CITIZENS FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 52-1638667
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
22 Firstfield Road, Gaithersburg, Maryland 20878
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: (301) 527-2400
-------------------------
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
Indicate the numbers of shares outstanding for the issuer's classes of
common stock, as of May 3, 1996.
$.01 par value of common stock 2,650,551
------------------------------ -------------
(class) (outstanding)
FIRST CITIZENS FINANCIAL CORPORATION
AND SUBSIDIARY
FORM 10-Q
INDEX
Part I Financial Information Page
Item 1 Financial Statements of First Citizens Financial Corporation
and Subsidiary:
Unaudited Consolidated Statements of Financial Condition
as of March 31, 1996 and December 31, 1995..................... 3
Unaudited Consolidated Statements of Income for the three
months ended Mach 31, 1996 and 1995............................ 4
Unaudited Consolidated Statements of Cash Flows for the
three months ended March 31, 1996 and 1995..................... 5
Unaudited Notes to Unaudited Consolidated Financial
Statements as of and for the three months ended
March 31, 1996 and 1995........................................ 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations............................. 7
Part II Other Information
Item 4 Submission of Matters to a Vote of Security Holders.............. 13
Item 5 Other Events..................................................... 13
Item 6 Exhibits and Reports on Form 8-K................................. 13
Signature Page................................................... 14
Exhibit Index.................................................... 15
2
FIRST CITIZENS FINANCIAL CORPORATION AND SUBSIDIARY
Unaudited Consolidated Statements of Financial Condition
(Dollars in thousands, except per share data)
March 31, December 31,
1996 1995
--------- ------------
Assets
Cash and cash equivalents .......................................... $ 18,948 $ 15,711
Investment securities available-for-sale, at estimated fair value .. 100,387 73,730
Investment securities held-to-maturity, net (estimated fair value of
$41,081 at March 31, 1996 and $42,439 at December 31, 1995) ...... 40,954 42,083
Loans receivable, net of allowance for losses of $7,193 and $7,460
at March 31, 1996 and December 31, 1995, respectively ............ 424,236 412,603
Loans held for sale, net, at lower of cost or market ............... 9,352 34,921
Stock in the Federal Home Loan Bank of Atlanta, at cost ............ 3,970 3,842
Real estate owned, net of allowance for losses of $1,090 and $975
at March 31, 1996 and December 31, 1995, respectively ............ 13,011 13,269
Accrued interest receivable ........................................ 3,955 3,364
Premises and equipment, net ........................................ 2,864 2,869
Deferred income taxes, net ......................................... 2,142 2,328
Prepaid expenses and other assets .................................. 4,299 2,709
--------- ---------
Total Assets .................................................. $ 624,118 $ 607,429
========= =========
Liabilities
Deposit accounts ................................................... $ 500,237 $ 487,097
Advances from the Federal Home Loan Bank of Atlanta ................ 77,690 75,140
Accounts payable and accrued expenses .............................. 6,999 6,551
--------- ---------
Total Liabilities ............................................. 584,926 568,788
--------- ---------
Stockholders' Equity
Preferred stock, $.01 per share par value, 2,000,000 shares
authorized, none issued and outstanding ............................ -- --
Common stock, $.01 per share, par value, 8,000,000 shares
authorized, 2,649,182 shares and 2,629,576 shares issued and
outstanding at March 31, 1996 and December 31, 1995, respectively 26 26
Common stock dividend distributable ................................ 3 --
Additional paid-in capital ......................................... 27,771 22,297
Retained earnings -- substantially restricted ...................... 11,683 15,970
Unrealized net holding gains (losses) on investment securities
available-for-sale, net of taxes .............................. (291) 348
--------- ---------
Total Stockholders' Equity .................................... 39,192 38,641
--------- ---------
Total Liabilities and Stockholders' Equity .................... $ 624,118 $ 607,429
========= =========
The accompanying notes to consolidated financial statements are an integral part
of these statements.
3
FIRST CITIZENS FINANCIAL CORPORATION AND SUBSIDIARY
Unaudited Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended
March 31,
------------------
1996 1995
---- ----
Interest income
Loans receivable .................................... $ 9,328 $ 8,969
Investment securities ............................... 2,012 1,422
Other interest ...................................... 67 6
-------- --------
Total interest income ........................... 11,407 10,397
-------- --------
Interest expense
Deposit accounts .................................... 5,911 4,952
Advances from the Federal Home Loan Bank of Atlanta . 1,086 907
Capitalized interest ................................ -- (43)
-------- --------
Total interest expense .......................... 6,997 5,816
-------- --------
Net interest income ................................. 4,410 4,581
Provision for loan losses ............................... 148 150
-------- --------
Net interest income after provision for loan losses ..... 4,262 4,431
-------- --------
Other income
Gain on sale of loans ............................... 776 45
Deposit service charges ............................. 289 238
Loan fees and service charges ....................... 149 105
Servicing fee income, net ........................... 84 63
Gains on sale of investment securities .............. 4 45
Other ............................................... 49 42
-------- --------
Total other income .............................. 1,351 538
-------- --------
Operating expense
Compensation and employee benefits .................. 2,033 1,866
Equipment, maintenance and data processing .......... 360 315
Occupancy ........................................... 324 300
Federal insurance premiums and assessments .......... 306 327
Loss from real estate, net .......................... 204 171
Advertising and promotion ........................... 182 107
Professional services ............................... 170 173
Other ............................................... 405 335
-------- --------
Total operating expense ......................... 3,984 3,594
-------- --------
Income before income taxes .............................. 1,629 1,375
Provision for income taxes .......................... 551 428
-------- --------
Net income .............................................. $ 1,078 $ 947
======== ========
Earnings per common and common equivalent share (note 2) $ .34 $ .31
======== ========
The accompanying notes to consolidated financial statements are an integral part
of these statements.
4
FIRST CITIZENS FINANCIAL CORPORATION AND SUBSIDIARY
Unaudited Consolidated Statements of Cash Flows
(In thousands)
Three Months Ended
March 31,
------------------
1996 1995
---- ----
Operating activities
Net income ........................................................... $ 1,078 $ 947
Adjustments to reconcile net income to net cash provided by operating
activities:
Provision for losses on assets ..................................... 263 223
Amortization of loan fees, premiums, discounts and deferred interest (226) (285)
Loans originated for sale, net of repayments ....................... (11,019) (4,633)
Sale of loans held for sale ........................................ 37,870 3,925
(Increase) decrease in accrued interest receivable, prepaid expenses
and other assets ................................................ (2,181) 1,991
Depreciation and amortization of premises and equipment ............ 107 118
Increase in accounts payable and accrued expenses .................. 448 73
Deferred income tax provision (benefit) ............................ 587 (335)
Other .............................................................. 25 2
-------- --------
Net cash provided by operating activities ....................... 26,952 2,026
-------- --------
Investing activities
Loans originated, net of repayments ................................ (11,761) (6,562)
Loans purchased .................................................... (181) --
Investment securities purchased .................................... (58,477) (3,005)
Investment securities sold ......................................... 4,979 --
Principal repayments, maturities and calls of investment securities 26,875 1,587
Purchases of Federal Home Loan Bank of Atlanta stock ............... (410) (51)
Sales of Federal Home Loan Bank of Atlanta stock ................... 282 --
Capitalized additions to real estate owned ......................... (973) (545)
Proceeds from sale of real estate owned ............................ 251 97
Net additions to premises and equipment ............................ (102) (132)
-------- --------
Net cash used in investing activities .......................... (39,517) (8,611)
-------- --------
Financing activities
Net increase in deposits ........................................... 13,140 3,042
Proceeds from Federal Home Loan Bank of Atlanta advances ........... 32,425 68,450
Repayments of Federal Home Loan Bank of Atlanta advances ........... (29,875) (64,650)
Net proceeds from exercise of stock options ........................ 112 21
-------- --------
Net cash provided by (used in) financing activities ............. 15,802 6,863
-------- --------
Increase (decrease) in cash and cash equivalents ................ 3,237 278
Cash and cash equivalents at beginning of period ................ 15,711 7,828
-------- --------
Cash and cash equivalents at end of period ...................... $ 18,948 $ 8,106
======== ========
Supplemental information
Interest paid on deposits and borrowed funds ....................... $ 1,573 $ 1,312
Loans to facilitate the sale of real estate owned .................. 865 --
Loans transferred to held for sale, net ............................ 1,254 --
Income tax payment ................................................. 530 --
The accompanying notes to consolidated financial statements are an integral part
of these statements.
5
FIRST CITIZENS FINANCIAL CORPORATION AND SUBSIDIARY
Unaudited Notes to Unaudited Consolidated Financial Statements
As of and for the Three Months Ended March 31, 1996 and 1995
- --------------------------------------------------------------------------------
1) Basis of Presentation
First Citizens Financial Corporation ("First Citizens Financial") is the
holding company of Citizens Savings Bank F.S.B. ("Citizens" or the "Bank"), a
wholly-owned federal savings bank subsidiary of First Citizens Financial. The
consolidated financial statements include the accounts of First Citizens
Financial, Citizens and wholly-owned subsidiaries of Citizens (collectively, the
"Company").
The financial statements as of March 31, 1996 and for the three months
ended March 31, 1996 and 1995 are unaudited but, in the opinion of management of
the Company, contain all adjustments, consisting solely of normal recurring
entries, necessary to present fairly the consolidated financial condition as of
March 31, 1996 and the results of consolidated operations for the three months
ended March 31, 1996 and 1995 and consolidated cash flows for the three months
ended March 31, 1996 and 1995. The consolidated statement of financial condition
as of December 31, 1995 is derived from audited financial statements. These
condensed financial statements should be read in conjunction with the financial
statements and notes thereto included in First Citizens Financial's latest
report to stockholders' on Form 10-K.
The results of consolidated operations for the three months ended March 31,
1996 are not necessarily indicative of results that may be expected for the
entire year ending December 31, 1996.
2) Earnings Per Share
On April 19, 1996, the Board of Directors declared a 10% stock dividend
which will be distributed on June 3, 1996 to stockholders of record on May 3,
1996. Average shares outstanding and all per share amounts are based on the
increased number of shares giving retroactive effect to the stock dividend.
Earnings per share for the three months ended March 31, 1996 and 1995 were
determined by dividing net income by 3,178,512 and 3,103,833, the weighted
average number of shares outstanding during these periods, respectively (as
adjusted for the 10% stock dividend). Outstanding shares also include common
stock equivalents which consist of outstanding stock options, if such options
are dilutive. The Company has not separately reported fully diluted earnings per
share as it is not materially different from earnings per share.
6
FIRST CITIZENS FINANCIAL CORPORATION AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Dollars in the tables in thousands)
- --------------------------------------------------------------------------------
This discussion and analysis includes a description of material changes
which have affected the Company's consolidated financial condition and
consolidated results of operations during the periods included in the Company's
financial statements.
FINANCIAL CONDITION (March 31, 1996 compared to December 31, 1995)
Total assets increased by $16.7 million, or 2.7%, at March 31, 1996
compared to December 31, 1995. Such increase was primarily due to increases of
$26.5 million in investment securities and $1.6 million in prepaid expenses and
other assets. Loans decreased by $13.9 million, net, which reflects the sale of
30-year fixed rate loans amounting to $26.3 million, net. Such loans were sold
to improve the Bank's interest rate sensitivity.
The following table sets forth the amounts of the Bank's nonperforming
assets by category at the dates indicated:
Nonperforming Assets
March 31, 1996 December 31, 1995
-------------- -----------------
No. of loans No. of loans
Amount or projects Amount or projects
------ ------------ ------ ------------
Nonaccrual loans:
Commercial real estate ................... $ 2,265 3 $ 2,266 3
Other nonconstruction loans .............. 649 10 501 10
-------- -------- -------- --------
2,914 13 2,767 13
-------- -------- -------- --------
Real estate owned:
Residential land ......................... 5,482 2 5,326 2
Residential construction ................. 422 1 728 1
Residential properties ................... 243 1 243 1
Commercial land .......................... 7,954 4 7,947 4
-------- -------- -------- --------
14,101 8 14,244 8
-------- -------- -------- --------
Total nonperforming assets, gross .......... 17,015 21 17,011 21
======== ========
Specific loss allowances .................... (2,029) (1,915)
-------- --------
Total nonperforming assets, net .......... $ 14,986 $ 15,096
======== ========
Total nonperforming assets, net, as a
percentage of total assets ............. 2.4% 2.5%
======== ========
Total loss reserves as a percentage of total
nonperforming assets, gross ............... 49.8% 50.5%
======== ========
7
During the quarter ended March 31, 1996, Bank's nonperforming assets, net
decreased by $110,000, net. The primary cause of the decrease was additional
loss reserves on real estate owned.
Troubled debt restructurings, net, amounted to $5.5 million, at both March
31, 1996 and December 31, 1995. Performing loans greater than 90 days past
maturity, net, amounted to $1.5 million and $2.0 million at March 31, 1996 and
December 31, 1995, respectively.
At March 31, 1996, there were two loans amounting to $156,000 with respect
to which known information about the possible credit problems of the borrowers
or the cash flows of the security properties caused management to have serious
doubts about the ability of the borrowers to comply with the present loan
repayment terms and which may result in the future inclusion of such loans in
nonperforming assets.
The Bank regularly reviews assets in its portfolio to determine whether any
require classification. On the basis of such review, the following assets, which
include all of the nonperforming assets in the previous table, were classified
at the dates indicated:
Classified Assets
March 31, December 31,
1996 1995
---------- ------------
Classified:
Substandard................................ $ 19,965 $ 20,446
Doubtful................................... 197 186
Loss....................................... 2,532 2,387
------- -------
22,694 23,019
Specific loss reserves..................... (2,532) (2,387)
------ ------
Classified assets, net..................... $ 20,162 $ 20,632
====== ======
The Bank also identified assets which possess credit deficiencies or
potential weaknesses deserving management's close attention as "special
mention". These assets totaled $26.3 million at March 31, 1996 compared to $25.3
million at December 31, 1995.
The allowance for losses on loans is established through a provision for
loan losses based upon management's evaluation of the risk inherent in the loan
portfolio and changes in the nature and volume of loan activity. Such evaluation
considers, among other factors, the estimated fair value of the underlying
collateral, current economic conditions and historical loan loss experience.
While management uses available information in establishing the allowance for
possible loan losses, future adjustments to the allowance may be necessary if
economic conditions differ substantially from the assumptions used in making the
evaluations. Additions to the allowance are charged to operations; realized
losses, net of recoveries, are charged to the allowance. In addition, various
regulatory agencies, as part of their examination process, periodically review
the Company's allowance for possible loan losses. Such agencies may require the
Company to recognize additions to the allowance based on their judgments about
information available to them at the time of their examinations.
The Bank provided an additional $148,000 for potential loan losses during
the first quarter of 1996 and incurred $415,000 of net charge-offs during the
period.
8
The Bank also establishes allowances for losses on real estate owned based
upon their fair values. The Bank provided $115,000 for additional losses on real
estate owned during the first quarter of 1996. The valuations of real estate
owned properties are reviewed periodically (at least quarterly) and updated as
necessary based on the Bank's expectations of holding periods, leasing or sales
activity, and other changes in market conditions.
Based on available information, management believes that current loss
reserves are adequate at this time to cover potential losses in the portfolio.
There can be no assurance, however, that additional loss provisions will not be
necessary in the future if market conditions deteriorate.
The Bank had unrealized gains of $.6 million and unrealized losses of $1.0
million on its investment securities available-for-sale portfolio at March 31,
1996. The amortized cost of this portfolio was $100.8 million at that date.
There were unrealized losses amounting to $84,000 and $210,000 in unrealized
gains on the investment securities held-to-maturity portfolio at that date. The
Bank's investment securities portfolio includes both agency obligations and
mortgage-backed securities.
Deposits, before interest credited, increased by $7.8 million, or 1.6%,
during the three months ended March 31, 1996. Deposits, including interest
credited, increased by $13.1 million, a 2.7% increase. Also during the three
months ended March 31, 1996, advances from the Federal Home Loan Bank increased
$2.6 million or 3.4%. Federal Home Loan Bank advances had an average interest
rate of 5.8% at March 31, 1996.
At March 31, 1996, stockholders' equity totaled $39.2 million, or 6.3% of
total assets, and reflected $291,000 of net unrealized holding losses, net of
applicable taxes, on investment securities available-for-sale. At March 31,
1996, the Bank was considered "well capitalized" under regulatory definitions.
See "Liquidity and Capital Resources".
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND
MARCH 31, 1995
General. The Company recorded net income of $1.1 million, or $.34 per
share, for the three months ended March 31, 1996 as compared to net income of
$947,000, or $.31 per share, for the three months ended March 31, 1995.
Net interest income, after provision for loan losses, decreased $169,000
when compared to 1995. There was a $1.0 million, or 9.7%, increase in interest
income which was offset by a $1.2 million, or 20.3%, increase in interest
expense. Provision for loan losses decreased $2,000. Other income increased by
$.8 million, or 151.1%, and operating expenses increased by $390,000, or 10.9%,
during the three months ended March 31, 1996 compared to the same period in the
prior year.
9
Net Interest Income. The Company's net interest income, before provision
for loan losses, decreased $171,000, or 3.7%, during the three months ended
March 31, 1996 as compared to the same period of 1995. Interest income on loans
increased by $.4 million, or 4.0%, due to increases in average yields from 8.1%
to 8.2% during the three months ended March 31, 1996 compared to the same period
in the prior year and increases in average outstanding balances of $8.4 million.
Interest income on investment securities increased by $.6 million which was
primarily due to a $37.8 million increase in average outstanding balances during
the three months ended March 31, 1996 compared to the same period in the prior
year.
Interest paid on deposits increased $1.0 million, or 19.4%, due to an
increase in average rates paid on deposits from 4.4% to 4.8% and a $38.8 million
increase in average outstanding balances. Interest on borrowed funds increased
$179,000 due to an increase in average rates paid from 5.7% to 5.8% and a $10.9
million increase in average outstanding balances.
Provision for Loan Losses. During the first quarters of 1996 and 1995, the
Company provided $148,000 and $150,000, respectively, for loan losses.
Management of the Bank believes that the current loss reserves appear adequate
at this time to cover potential losses in the loan portfolio. There can be no
assurance, however, that additional reserves will not be necessary if market
conditions change.
Other Income. Total other income increased $.8 million, or 151.1%, during
the three months ended March 31, 1996 as compared to the three months ended
March 31, 1995. The Company realized gains of $574,000 on the sale of 30-year
fixed-rate loans amounting to $26.3 million, net. The Company also realized
gains amounting to $202,000, an increase of $157,000 from 1995, on the sale of
mortgage loans originated for sale by First Citizens Mortgage Corporation
("FCMC"), the Bank's mortgage banking subsidiary. FCMC experienced increased
gains on sales of loans originated for sale due to increased originations of
such loans caused by decreased interest rates.
Operating Expense. Operating expense increased by $390,000, or 10.9%,
during the three months ended March 31, 1996 as compared to the three months
ended March 31, 1995. Compensation and employee benefits increased by $167,000
due to increased accruals for bonuses and adjustments to various benefit plans.
Loss from real estate increased by $33,000 primarily due to a $42,000 increase
in provisions for losses on real estate owned. Provisions for losses during the
three months ended March 31, 1996 amounted to $115,000 compared to provisions
during the three months ended March 31, 1995 of $73,000.
Income Taxes. For the quarter ended March 31, 1996, the Company's effective
tax rate was less than the statutory tax rate primarily due to the effects of
exercises of non-incentive stock options granted to directors and employees. For
the quarter ended March 31, 1995, the Company's effective tax rate was less than
the statutory tax rate primarily due to recovery of the valuation allowance on
deferred tax assets. When Statement of Financial Accounting Standards No. 109
Accounting for Income Taxes was adopted during the first quarter of 1993, the
Company established a valuation allowance for the excess of deferred tax assets
over taxable income available in carryback years and future reversals of
existing taxable temporary differences. The Company was able to recover $60,000
of the valuation allowance during the quarter ended March 31, 1995. Amounts
recovered reduced income tax expense for financial statement purposes and the
valuation allowance was correspondingly reduced.
10
LIQUIDITY AND CAPITAL RESOURCES
Under current regulations, a savings association, such as the Bank,
generally is required to maintain liquid assets at 5.0% or more of its net
withdrawable deposits plus short-term borrowings. The Bank is in compliance with
this requirement. At March 31, 1996, the Bank had outstanding loan commitments
totaling $17.5 million.
SAIF-insured institutions, such as the Bank, are required to maintain
minimum levels of capital. At March 31, 1996, the Bank continued to exceed all
currently applicable core, tangible and risk-based capital requirements.
At March 31, 1996, the Bank had the following amounts of capital:
Actual % of Required % of Excess % of
Amount Assets* Amount Assets* Amount Assets*
------- ------- -------- ------- ------- -------
Core ** $38,472 6.2% $24,981 4.0% $13,491 2.2%
Tangible 38,472 6.2 9,368 1.5 29,104 4.7
Risk-weighted** 43,362 11.1 31,250 8.0 12,112 3.1
- --------
<FN>
* Based upon adjusted total assets for the core and tangible capital
requirements, and risk-weighted assets for the risk-based capital
requirement.
** 5.0% core and 10.0% risk-based capital required to be considered "well
capitalized" and 4.0% core and 8.0% risk-based capital required to be
considered "adequately capitalized" under the OTS "Prompt Corrective
Action" regulations. Under current OTS capital regulations, the minimum
core capital requirement is 3% and the minimum risk-based capital
requirement is 8%.
</FN>
In August 1993, the OTS issued a final rule which adds an
interest-rate-risk ("IRR") component to its risk-based capital rule. Savings
institutions will be required to incorporate IRR into their risk- based capital
calculation when OTS concludes testing of its appeal process. Savings
institutions with greater than normal interest rate exposure will be required to
deduct from risk-based capital one-half of the difference between the
institution's actual measured exposure and the normal level of exposure. The
amount to be deducted will be provided by OTS. Based on financial data as of
March 31, 1996, management believes that compliance with the new IRR would not
have had a material impact on the Bank's risk-based capital position at that
date.
The United States Congress is considering legislation regarding Federally
insured banks and thrifts which would, among other things, (i) abolish the OTS
and transfer its functions to other agencies of the United States government,
(ii) require Federally chartered thrifts, including the Bank, to convert to
national or state bank charters or state thrift charters, (iii) require savings
and loan holding companies to be regulated as bank holding companies, and (iv)
impose a one-time assessment in order to recapitalize the Savings Association
Insurance Fund ("SAIF"). The amount of the assessment will be determined by the
Federal Deposit Insurance Corporation and may be up to 90 basis points on the
deposits of certain thrifts, including the Bank. This legislation is in a
preliminary stage, and it cannot be determined whether, or in what form, any
such legislation will eventually be enacted. If a 90 basis
11
point special assessment were required, it would result in a charge to the Bank
of up to $2.8 million after taxes, which would have the effect of reducing the
Bank's tangible and core capital to $35.7 million, or 5.7% of adjusted total
assets, and total risk-based capital to $40.6 million, or 10.4% of risk-weighted
assets, on a pro forma basis as of March 31, 1996. Assuming such special
assessment were made and, as a result, the SAIF was fully recapitalized, it
would have the effect of reducing the Bank's deposit insurance premiums to the
SAIF in future periods. In addition, if the Bank were required to convert its
Federal savings bank charter, the Bank could be required to recapture its bad
debt reserve for Federal income tax purposes. Such recaptured amount would be
$1.6 million, after taxes, and, if recaptured, would further reduce the Bank's
income and capital ratios. Pending legislation, if enacted, would provide relief
from such recapture for certain prior periods, if the Bank meets a proposed
residential loan origination requirement.
At March 31, 1996, First Citizens Financial Corporation, on an
unconsolidated basis, had $1.2 million of cash. First Citizens Financial
Corporation's expenses primarily consist of certain shareholder- related
activities. First Citizens Financial Corporation believes it can fund its
working capital needs from its own cash account, through the next several years,
without payment of dividends from the Bank.
12
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The following votes were cast by security holders at the 1996 Annual
Meeting of Stockholders held on April 19, 1996 in the election of two directors
for three-year terms each:
Withhold
Nominee For Authority
------- --- ---------
William J. Walsh, III 2,026,071 12,136
H. Deets Warfield, Jr. 2,026,071 12,136
In addition to Messrs. Walsh and Warfield, the continuing directors are:
Stanley Betts, Albert M. Cowell, Jr., Enos K. Fry, Herbert W. Jorgensen, N.
Richard Kimmel and Melvin O. Wright.
Item 5. Other Events
On April 19, 1996, the Board of Directors declared a 10% stock dividend
distributable on June 3, 1996 to stockholders of record on May 3, 1996.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11. Computation of Primary and Fully Diluted Earnings Per Share.
27. Financial Data Schedule.
(b) Reports on Form 8-K.
A Form 8-K was filed on March 1, 1996 to announce the date of the
1996 Annual Meeting of Stockholders.
13
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.
FIRST CITIZENS FINANCIAL
CORPORATION
------------------------
(Registrant)
Date: May 9, 1996 By:
------------- --------------------
Enos K. Fry
Vice Chairman and
President
Date: May 9, 1996 By:
------------- ---------------------
William C. Scott
Senior Vice President and
Chief Financial Officer
14
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.
FIRST CITIZENS FINANCIAL
CORPORATION
------------------------
(Registrant)
Date: May 9, 1996 By: /s/ Enos K. Fry
----------- ---------------------
Enos K. Fry
Vice Chairman and
President
Date: May 9, 1996 By: /s/ William C. Scott
----------- ---------------------
William C. Scott
Senior Vice President and
Chief Financial Officer
14
FIRST CITIZENS FINANCIAL CORPORATION AND SUBSIDIARY
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT DESCRIPTION PAGE
11 Computation of Primary and Fully Diluted
Earnings Per Share.................................... 16
27 Financial Data Schedule............................... 17
15