FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
-----------------------------------
For quarter ended SEPTEMBER 30, 1999
------------------
Commission file number 0-20990
-------
HARBOR BANKSHARES CORPORATION
- -----------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 52-1786341
- -------- ----------
(State of other jurisdiction of (I.R.S. Employer identification No.)
incorporation or organization)
25 W. FAYETTE STREET, BALTIMORE, MARYLAND 21201
- ----------------------------------------- -----
(Address of principal executive offices) (Zip code)
(410) 528-1800
- --------------
Registrant's telephone number, including area code
NOT APPLICABLE
- --------------
Former name, 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 periods 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 issuer's classes of
common stock, as of the latest practical date.
COMMON STOCK, NON-VOTING, $.01 PAR VALUE - 33,333 SHARES AS OF SEPTEMBER 30,
1999. COMMON STOCK, $.01 PAR VALUE -- 653,204 SHARES AS OF SEPTEMBER 30, 1999
-----------------------------------------------------------------------
HARBOR BANKSHARES CORPORATION AND SUBSIDIARY
- --------------------------------------------
INDEX
-----
PART I FINANCIAL INFORMATION
---------------------
ITEM 1 Financial Statements
Consolidated Statements of Condition - September 30, 1999
(Unaudited) and December 31, 1998
Consolidated Statements of Income (Unaudited) - Three
months Ended September 30, 1999 and 1998
Consolidated Statements of Income (Unaudited) - Nine months
Ended September 30, 1999 and 1998
Consolidated Statement of Cash Flows (Unaudited) - Nine
months Ended September 30, 1999 and 1998
Notes to Unaudited Consolidated Financial Statements
ITEM 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations
PART II OTHER INFORMATION
-----------------
ITEM 1 Legal Proceedings
ITEM 2 Changes in Securities
ITEM 3 Defaults upon Senior Securities
ITEM 4 Submission of Matters to a Vote of Security Holders
ITEM 5 Other Information
ITEM 6 Exhibits and Reports on Form 8-K
SIGNATURES
- ----------
-2-
HARBOR BANKSHARES CORPORATION AND SUBSIDIARY
- --------------------------------------------
CONSOLIDATED STATEMENTS OF CONDITION
SEPT. 30 DEC 31
1999 1998
----- ------
(UNAUDITED)
DOLLARS IN THOUSANDS
ASSETS
Cash and Due from Banks $ 6,614 $ 5,027
Interest Bearing Deposits in Other Banks 480 1,055
Investment Securities:
Held to maturity (market values of $20
as of 9/30/99 and $17,163 as of 12/31/98) 20 17,168
Available for Sale 51,945 55,085
------ ------
Total Investment Securities 51,965 72,253
Federal Funds Sold 5,261 13,402
Loans 91,510 85,957
Unearned Income (154) (160)
Reserve for Possible Loan Losses (859) (699)
----- -------
Net Loans 90,497 85,098
Property and Equipment - Net 1,680 1,406
Other Real Estate Owned 773 638
Goodwill 3,253 3,500
Accrued Interest Receivable and Other Assets 3,685 2,344
----- ------
TOTAL ASSETS $ 164,208 $ 184,723
------- --------
LIABILITIES
Deposits:
Non-Interest Bearing Demand $ 17,601 $ 11,483
Interest Bearing Transaction Accounts 33,843 32,520
Savings 55,305 64,730
Time, $100,000 or more 17,256 31,351
Other Time 27,317 27,398
------ ------
Total Deposits 151,322 167,482
Accrued Interest and Other Liabilities 625 777
Short Term Borrowings --- ---
Notes Payable 3,983 5,796
----- -------
TOTAL LIABILITIES 155,930 174,055
SHAREHOLDERS' EQUITY
Common stock, - par value $.01 per share:
Authorized 10,000,000 shares; 653,204 voting shares
at 9/30/99 and 12/31/98 and 33,333
non-voting shares at 9/30/99 and 12/31/98. 7 7
Capital Surplus 6,472 6,472
Retained Earnings 4,126 4,414
Treasury Stock (10) (25)
Accumulated other comprehensive income (2,317) (200)
------- ------
TOTAL SHAREHOLDERS' EQUITY 8,278 10,668
------- ------
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY $ 164,208 $ 184,723
------- -------
(See Notes to Unaudited Consolidated Financial Statements)
-3-
HARBOR BANKSHARES CORPORATION AND SUBSIDIARY
- --------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
September 30
1999 1998
---- ----
(Unaudited)
In Thousands
Except per Share Data
INTEREST INCOME
Interest and Fees on Loans $ 2,010 $ 1,984
Interest on Investment Securities (Taxable) 920 648
Interest on Deposits in Other Banks 9 31
Interest on Federal Funds Sold 139 149
------ -------
TOTAL INTEREST INCOME 3,078 2,812
INTEREST EXPENSE
Interest on Deposits
Savings 494 301
Interest Bearing Transaction Accounts 236 262
Time $100,000 or More 243 335
Other Time 361 326
Interest on Borrowed Funds - -
Interest on Notes Payable 77 76
------- ------
TOTAL INTEREST EXPENSE 1,411 1,300
----- ------
NET INTEREST INCOME 1,667 1,512
Provision for Possible Loan Losses 400 38
------ -------
NET INTEREST INCOME AFTER
PROVISION FOR POSSIBLE LOAN LOSSES 1,267 1,474
OTHER OPERATING INCOME
Service Charges on Deposit Accounts 235 146
Other Income 126 151
--- ----
361 297
OTHER OPERATING EXPENSES
Salaries and Employee Benefits 827 634
Occupancy Expense of Premises 220 192
Equipment Expense 208 93
Data Processing Expense 158 155
Deposit Assessments and Related Fees 11 9
Goodwill Amortization 82 82
Other Expenses 363 306
------ -------
1,869 1,471
INCOME BEFORE INCOME TAXES (241) 300
Applicable Income Taxes (81) 98
------- -------
NET INCOME $ (160) $ 202
------ -----
BASIC EARNINGS PER SHARE $ (.23) $ .30
DILUTED EARNINGS PER SHARE $ (.18) $ .28
AVERAGE COMMON SHARES
OUTSTANDING 687 687
Dividends Declared per Share $ - $ -
(See notes to unaudited consolidated Financial Statements)
-4-
HARBOR BANKSHARES CORPORATION AND SUBSIDIARY
- --------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended
September 30
1999 1998
(Unaudited)
In Thousands
Except per Share Data
INTEREST INCOME
Interest and Fees on Loans $ 5,744 $ 5,702
Interest on Investment Securities (Taxable) 3,082 1,793
Interest on Deposits in Other Banks 31 106
Interest on Federal Funds Sold 296 500
------ -------
TOTAL INTEREST INCOME 9,153 8,101
INTEREST EXPENSE
Interest on Deposits
Savings 1,509 971
Interest Bearing Transaction Accounts 680 541
Time $100,000 or More 840 895
Other Time 1,032 1,135
Interest on Borrowed Funds 40 -
Interest on Notes Payable 216 231
------- ------
TOTAL INTEREST EXPENSE 4,317 3,773
----- ------
NET INTEREST INCOME 4,836 4,328
Provision for Possible Loan Losses 752 113
------ ------
NET INTEREST INCOME AFTER
PROVISION FOR POSSIBLE LOAN LOSSES 4,084 4,215
OTHER OPERATING INCOME
Service Charges on Deposit Accounts 582 446
Other Income 391 523
Gains Sale of Real Estate 112 -
--- -------
1,085 969
OTHER OPERATING EXPENSES
Salaries and Employee Benefits 2,388 1,955
Occupancy Expense of Premises 620 548
Equipment Expense 519 294
Data Processing Expense 507 456
Deposit Assessments and Related Fees 33 28
Goodwill Amortization 248 248
Other Expenses 1,028 882
------ -------
5,343 4,411
INCOME BEFORE INCOME TAXES (174) 773
Applicable Income Taxes (58) 258
------- -----
NET INCOME $ (116) $ 515
------ -----
BASIC EARNINGS PER SHARE $ (.17) $ .75
DILUTED EARNINGS PER SHARE $ (.13) $ .70
AVERAGE COMMON SHARES
OUTSTANDING 687 687
Dividends Declared per Share $ .25 $ .25
(See notes to unaudited consolidated Financial Statements)
-5-
HARBOR BANKSHARES CORPORATION AND SUBSIDIARY
- --------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30
1999 1998
---- -----
(Unaudited)
Dollars in Thousands
OPERATING ACTIVITIES
Net Income $ (160) $ 515
Adjustments to Reconcile Net Income to Net Cash
and Cash Equivalents Provided by (Used in) Operating
Activities:
Gains on sales of Real Estate (112) -
Gains on sales of securities ---- (26)
Gains on sale of loans (2) (1)
Provision for Possible Loan Losses 752 113
Depreciation and Amortization 695 551
(Increase) in Interest Receivable and Other Assets (1,476) (901)
(Increase) Decrease in Interest Payable and Other
Liabilities 152 (185)
----- ---------
Net Cash Provided by (Used in) Operating Activities (151) 66
INVESTING ACTIVITIES
Net Decrease in Deposits at Other Banks 575 1,061
Purchase of Investments held to maturity (90) ---
Purchase of Investments Securities available for sale (5,000) (31,946)
Proceeds from Investment Securities held to maturity 17,238 ---
Proceeds from Called Investments Securities held
to maturity --- 11,000
Proceeds from Sale of Securities available for sale --- 1,839
Proceeds from Called Securities available for sale 5,000 12,000
Proceeds from the sale of loans 3,570 1,498
Net Increase in Loans (8,977) (7,006)
Purchase of Premises and Equipment (720) (224)
Proceeds from the Sale of OREO 92 ---
Net change in OREO (227) ---
Proceeds from the Sale of Real Estate 147 ---
----------- -------
Net Cash and Cash Provided by 11,608 (11,778)
(Used in) Investing Activities
FINANCING ACTIVITIES
Net Increase in Non-Interest Bearing
Transaction Accounts 6,118 2,972
Net Increase (Decrease) in Interest Bearing
Transaction Accounts 1,323 16,876
Net Decrease in Savings Deposits (9,425) (12,055)
Net Decrease in Time Deposits (14,176) (137)
Payment of FDIC Debt (1,813) ---
Acquisition, Sale of Treasury Stock 15 24
Payment of Cash Dividends (173) (402)
------ ------
Net Cash (Used in) Provided by Financing Activities (18,131) 7,278
-------- -----
Increase (Decrease) in Cash and Cash Equivalents (6,674) (4,434)
Cash and Cash Equivalents at Beginning of Period 18,549 18,549
------- -------
Cash and Cash Equivalents at End of Period $ 11,875 $14,115
======== =======
(See Notes to Unaudited Consolidated Financial Statements)
-6-
HARBOR BANKSHARES CORPORATION AND SUBSIDIARY
- --------------------------------------------
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
Note A: Basis of Presentation
---------------------
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-QSB. Accordingly, they do not include all
the information required for complete financial statements. In the
opinion of management, all adjustments and reclassifications
considered necessary for a fair presentation have been included.
Operating results for the nine month period ended September 30,
1999, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1999. The enclosed
unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements and footnotes
thereto incorporated by reference in the Corporation's Annual Report
on Form 10-KSB for the year ended December 31, 1998.
Note B: Comprehensive Income
--------------------
Comprehensive income is defined as the change in equity from
transactions and other events and circumstances from non-owner
sources. Presented below is a reconciliation of net income to
comprehensive income indicating the component of other comprehensive
income:
Nine Months Ended Sept. 30,
1999 1998
---- ----
Net Income $ (116) $ 515
- Other Comprehensive Income:
Unrealized Holding Gains (Losses)
Arising During the period (3,312) 192
- Less: Reclassified Adjustments for
gains included in Net Income ----- (26)
-------- -------
Other Comprehensive Income, Before
Tax (3,312) 166
Income Tax Expense (Benefit) Related to
items of Other Comprehensive Income (994) (56)
Other Comprehensive Income (2,318) 110
--------- ----
Comprehensive Income (Loss) $ (2,434) $ 625
========== ===========
-7-
HARBOR BANKSHARES CORPORATION AND SUBSIDIARY
- --------------------------------------------
Note C: In September 1988, the Financial Accounting Standards Board ("FASB")
issued Statement 133"Accounting for Derivative Instruments and
Hedging Activity." This Statement establishes accounting and
reporting standards for derivative instruments and hedging activity.
Under the standard, all derivatives must be measured at fair value
and recognized as either assets or liabilities in the financial
statements. The FASB recently deferred the effective date for one
year. Statement 133 will be effective for all fiscal quarters of
fiscal years beginning after September 15, 2000.
The accounting for changes in fair value (gains and losses) of a
derivative is dependent on the intended use of the derivative and
its designation. Derivatives may be used to: 1) hedge exposure to
change the fair value of a recognized asset or liability or a firm
commitment, referred to as a fair value hedge, 2) hedge exposure to
variable cash flow of forecasted transactions, referred to as a cash
flow hedge, and 3) hedge foreign currency exposure.
The Corporation only engages in fair value and cash flow hedges. In
both types of hedges, the effective portions of the hedge, although
included in earnings, do not affect corporate net income.
Ineffective portions of hedges are reported in and affect net
earnings immediately. Derivatives not designed as a hedging
instrument have the changes in their fair value recognized in
earnings in the period of change. Management is currently assessing
the potential impact of SFAS No. 133 on future corporate operations.
Note D: In April 1999, the Financial Accounting Standards Board (FASB)
announced "that it would eliminate pooling of interests as a method
of accounting for business combinations." In a unanimous vote, the
Board tentatively decided that using the purchase method is
preferable to allowing more than one method to be used when
businesses combine. The change will be effective for business
combinations initiated after the FASB issues a final standard on the
issues. This is expected to occur toward the end of 2000. The Board
expects to issue for comment a formal proposal on business
combination issues sometime early in the third quarter of this year.
YEAR 2000, COMPLIANCE
The Board of Directors has established a Year 2000 committee to monitor
progress with achieving and certifying Year 2000 compliance. In addition,
the Company has utilized an external consulting firm to assist with its
Year 2000 program. The majority of the Bank data systems are provided
through an outsourcing relationship with Electronic Data Systems (EDS).
These systems were upgraded during July, 1998. Validation testing with EDS
was conducted during March 1999 and no Y2-K issues were identified.
Systems appeared to be ready to function beyond the year 2000.
The Corporation and its subsidiary have no internally generated programmed
software coding to correct, as substantially all of the software utilized
by the Company and its subsidiary is purchased or licensed from external
providers. An inventory of this software has been completed and identified
remedial steps have been implemented and tested.
-8-
HARBOR BANKSHARES CORPORATION AND SUBSIDIARY
- --------------------------------------------
The Corporation and its subsidiary have initiated formal communications
with all of its significant suppliers and borrowers to determine the extent to
which the company is vulnerable to those third parties' failure to remediate
their own Year 2000 issues. The Company is requesting that third party vendors
represent their products and services to be Year 2000 compliant and that they
have a program to test for that compliance. However, the response of certain
third parties is beyond the control of the Company. The Corporation has received
responses from the majority of its vendors, who appear to be substantially
compliant. The Corporation will continue to ensure that all of its business
partners are Y2-K ready.
The cost incurred to date in implementing the year 2000 Plan is approximately
$250 thousand and the estimated cost to completion is expected to be $125
thousand. The following is an update of the Corporation's strategic plan:
Awareness Assessment Renovation Validation ImplementatiContingency
Internal 100% Internal 100% Internal 100% Internal 100% Internal 95%
External 100% External 100% External 100% External 100% External 95%
The Corporation has formulated a contingency plan for its mission critical
processes and is prepared to execute the same if the need arises. The progress
of the corporations' year 2000 Plan is being monitored by its regulators. A full
examination of the Corporation's plan was conducted by the FDIC during January
1999 with subsequent follow-ups.
This information is provided as part of the year 2000 Readiness Disclosure under
United States Federal Law.
-9-
HARBOR BANKSHARES CORPORATION AND SUBSIDIARY
- --------------------------------------------
PART I. FINANCIAL INFORMATION
- ------- ---------------------
Item II. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Harbor Bankshares Corporation's earnings for the third quarter of
1999 reflected a loss of $160 thousand, a decrease of $362 thousand
or 179.2 percent when compared to the third quarter of 1998. This
decrease, was mainly due to allocations to the Loan Loss Reserves
which totaled $400 thousand for the third quarter of 1999 compared
to $38 thousand for the same period for 1998. Net interest income
increased by $111 thousand. Other non-interest income increase by
$64 thousand or 21.5 percent resulting from the re-structure and
monitoring of the service charges area of the Bank. Total expenses
for the quarter increased by $398 thousand or 27.1 percent
reflecting increases in salary and benefits of $193 thousand or 30.4
percent as a result of a de-novo branch facility opened during
January, 1999, as well as additional staff in the lending area and
general salary increases. Equipment expense increased by $115
thousand or 123.6 percent due to the expansion and cost associated
with up grades and enhancements of systems related to the Y-2K
issue. The net effect of the income and expenses variances resulted
in the $160 thousand loss for the quarter.
Year-to-date earnings as of September 30, 1999, reflected a loss of
$116 thousand or ($.17)) basic earnings per share, reflecting a
decrease of ($.92) per share when compared to the nine months ending
September 30, 1998, when earnings were $515 thousand or $.75 basic
earnings per share. Return on Average Assets (ROAA) and Return on
Average Equity (ROAE) were (.06) percent and (1.1) percent
respectively.
Net interest income increased by $508 thousand or 11.7 percent over
last year's third quarter. Interest on investment securities
increased by $1.3 million or 71.9 percent reflecting the investment
of the proceeds from the deposit growth in that category. Interest
and fees on loans reflected an slight increase of $42 thousand or
.73 percent reflecting flat loan growth. Interest expense increased
by $544 thousand or 14.4 percent, reflecting the growth in the
interest bearing deposits. Interest on saving deposits increased by
$538 thousand or 55.4 percent, included in this category, are escrow
deposits in excess of $18.0 million belonging to the Baltimore and
Detroit Public School systems. Interest expense on interest bearing
deposit accounts increased by $ 139 thousand or 25.7 percent,
reflecting the continuous growth on those accounts. Interest expense
on time deposits deceased by $158 thousand or 7.8 percent. Included
in interest expense was $40 thousand of interest in borrowings from
the Federal Home Loan Bank of Atlanta and $216 thousand of interest
on the debt to the Federal Deposit Insurance Corporation.
The provision for possible Loan Losses was $752 thousand for the
nine months ended September 30, 1999, an increase of $639 thousand
or 565.4 percent over the same period for 1998. This increase
represents allocations for certain losses identified by management
in the commercial, real estate and consumer loan portfolios.
Charge-offs as of the end of the second quarter totaled $685
thousand and recoveries $93 thousand.
-10-
HARBOR BANKSHARES CORPORATION AND SUBSIDIARY
- --------------------------------------------
Other operating income increased by $116 thousand or 11.9 percent. Service
charges on deposit accounts increased by $136 thousand or 30.5 percent as
a result of the re-structure and close monitoring of the service charges
categories. Other fee income decreased by $132 thousand or 25.2 percent as
a result of the outsourcing of the Bank's ATM Network in order to mitigate
the cost of the operation. Corresponding expense categories related to the
network were also reduced, offsetting some of the loss of the fee income.
Included in other operating income, is a gain of $112 thousand
representing a sale of a parking lot adjacent to one of the Bank's
offices. Fee income from the subsidiary of the Bank, Harbor Financial
Services, was $111 thousand. Their operation resulted in break even
earnings for the nine months ended September 30, 1999. Non-interest
expense increased by $932 thousand or 21.1 percent, mainly due to a recent
expansion of a branch facility established during January 1999, cost
associated with purchases and up grades of equipment related to the Y2K
issue and the collection of bad debts. Salary and benefits increased by
$433 thousand or 22.1 percent reflecting the cost of the new facility as
well as additional staff and general salary increases. Occupancy cost
increased by $72 thousand or 13.1 percent mainly as a result of the new
branch facility. Equipment expense increased by $243 thousand or 53.2
percent reflecting the upgrades and purchases mentioned above. Data
processing expense increased by $51 thousand or 11.1 percent as a result
of higher transaction volume and Y2K testing cost. Goodwill amortization
at $248 thousand remained the same as the previous year. Other expenses
increased by $146 thousand or 16.5 percent basically due to the branch
expansion, loan collection cost and general growth in other areas of the
bank.
As of September 30, 1999, total deposits were $151.3 million, reflecting a
decrease of $16.1 million when compared to December 31, 1998. Non-interest
bearing accounts increased by $6.1 million or 53.3 percent as of the end
of the quarter, reflecting increased activity in the commercial accounts
category. Savings accounts decreased by $9.4 million or 14.6 percent,
reflecting fluctuations in the Money Market accounts as a result of
certain escrow deposits withdrawals. Time deposits decreased by $14.2
million, mainly reflected in the category of Time Deposits over $100
thousand which decreased $14.0 million or 44.6 percent. Net loans
increased by $5.4 million or 6.3 percent.
Shareholder's equity decreased by $2.4 million or 22.4 percent mainly due
to the increase in unrealized losses in available-for-sale securities,
which were $2.1 million when compared to the December 31, 1998 total of
$200 thousand. Primary and risk based capital for the corporation were 4.5
and 8.2 percent, respectively.
The corporation stock is traded privately. During the first nine months of
the year, a few trades were registered ranging from $17.00 to $18.00 per
share.
-11-
HARBOR BANKSHARES CORPORATION AND SUBSIDIARY
--------------------------------------------
PART II. OTHER INFORMATION
- -------- -----------------
Item I. Legal Proceedings
-----------------
The Corporation and its subsidiary, at times and in the
ordinary course of business, are subject to legal
actions. Management does not believe the outcome of such
matters will have a material adverse effect on the
financial condition of the Corporation.
Item II. Changes in Securities
---------------------
None
Item III. Defaults Upon Senior Securities
-------------------------------
None
Item IV. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item V. Other Information
-----------------
None
Item VI. Exhibits and Reports on Form 8-K
--------------------------------
Exhibit II - Statement Regarding Computation of per
Share Earnings
The Company did file a report on Form 8-K for the period
ending September 30, 1999. This report indicated the
termination of the Corporation's accountant,
PriceWaterhouse Coopers, LLP as of September 14. 1999
-12-
HARBOR BANKSHARES CORPORATION AND SUBSIDIARY
- --------------------------------------------
EXHIBIT II
----------
STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income by the weighted
average number of common shares outstanding for the period. Basic earnings per
share does not include the effect of potentially dilutive transactions or
conversions. This computation of diluted earnings per share reflects the
potential dilution of earnings per share under the treasury stock method which
could occur if contracts to issue common stock were exercised, such as stock
options and shared in corporate earnings.
The following table presents a summary of per share data and amounts for the
period indicated:
YTD ended Qualifying Basic EPA Basic Dilutive Diluted Diluted
September 30 Net Income Shares EPS Share Shares EPS
- ------------ ---------- ------ --- ----- ------ ---
1999 ($115,960) 686,537 ($.17) 173,839 860,376 ($.13)
1998 $514,521 686,537 $.75 50,865 737,402 $.70
Qtr ended
September 30
- ------------
1999 ($159,589) 686,537 ($.23) 173,839 860,376 ($.18)
1998 $201,845 686,537 $.29 50,865 737,402 $.27
-13-
HARBOR BANKSHARES CORPORATION AND SUBSIDIARY
- --------------------------------------------
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.
HARBOR BANKSHARES CORPORATION
Date:
------------- -------------------
Joseph Haskins, Jr.
President and Chief Executive Officer
Date: 11-8-99 /s/ Teodoro J. Hernandez
------------- ------------------------
Teodoro J. Hernandez
Treasurer
-14-