-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UwFib0/F6cyLWEXRRxHH6At99DTmQotEUGC9a55fFm24+qjx30TrxvSj3SYf06MJ ulcwDE2vOUK6ckzzVYLB1A== 0000950168-00-001344.txt : 20000515 0000950168-00-001344.hdr.sgml : 20000515 ACCESSION NUMBER: 0000950168-00-001344 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARDINAL BANKSHARES CORP CENTRAL INDEX KEY: 0001022759 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 541804471 STATE OF INCORPORATION: VA FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-28780 FILM NUMBER: 629655 BUSINESS ADDRESS: STREET 1: P O BOX 215 CITY: FLOYD STATE: VA ZIP: 24091 BUSINESS PHONE: 5407454191 10QSB 1 FORM 10-Q U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) X Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2000 or _____Transition Report under Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the transition period from________________ to ________________. Commission File No. -0-28780- CARDINAL BANKSHARES CORPORATION (Exact name of the registrant as specified in its charter) Virginia 54-1804471 (State of Incorporation) (I.R.S. Employer Identification No.) 101 Jacksonville Circle (P. O. Box 215), Floyd VA 24091 (Address of principal executive offices) (540) 745-4191 (Issuer's telephone number, including area code) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 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 State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: The number of shares outstanding of the Issuer's Common Stock, $10 Par Value, as of May 10, 2000 was 511,911. Transitional Small Business Disclosure Format (check one): Yes No X Page 1 of 14. CARDINAL BANKSHARES CORPORATION AND SUBSIDIARIES FORM 10-QSB INDEX - ----------------------------------------------------------------------------- PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The consolidated financial statements of Cardinal Bankshares Corporation (the "Company") are set forth in the following pages. Consolidated Balance Sheets as of March 31, 2000 and December 31,1999........................................................3 Consolidated Statements of Operations for the Three Months Ended March 31, 2000 and 1999 ...................................4 Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2000 and the Year Ended December 31, 1999.......................................................5 Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2000 and 1999.........................................6-7 Notes to Consolidated Financial Statements.............................8-9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.....................................9-10 PART II. OTHER INFORMATION.............................................10-11 All schedules have been omitted because they are inapplicable or the required information is provided in the financial statements, including the notes thereto. 2 CARDINAL BANKSHARES CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets March 31, 2000 and December 31, 1999 - --------------------------------------------------------------------------------
March 31, December 31, 2000 1999 ------------ ------------ (Unaudited) (Audited) ASSETS Cash and due from banks $ 2,315,191 $ 3,775,280 Interest-bearing deposits with banks 0 2,000,000 Federal funds sold 4,990,000 6,975,000 Investment securities available for sale 36,652,696 33,213,933 Investment securities held to maturity 20,138,329 19,169,099 Loans, net of allowance for credit losses of $1,573,813 in 2000 and $1,661,521 in 1999 87,437,429 87,684,925 Property and equipment, net 2,532,706 2,444,355 Accrued income 1,168,071 1,173,115 Other assets 1,818,610 1,704,778 ----------- ----------- Total assets $157,053,032 $158,140,485 ============ ============ LIABILITIES Demand deposits $ 15,754,185 $ 16,783,239 Interest-bearing deposits 10,653,907 10,767,129 Savings deposits 20,617,417 18,901,235 Large denomination time deposits 17,254,983 18,142,525 Other time deposits 73,813,147 75,213,536 ----------- ----------- Total deposits 138,093,639 139,807,664 Federal funds purchased 0 0 Other borrowed funds 0 0 Accrued interest payable 252,062 237,075 Other liabilities 539,522 338,149 ----------- ----------- Total liabilities 138,885,223 140,382,888 ----------- ----------- Commitments and contingencies STOCKHOLDERS'EQUITY: Common stock, $10 par value, authorized 5,000,000 shares, issued 511,911 shares in 2000 and 511,771 in 1999 5,119,110 5,117,710 Surplus 2,925,150 2,925,150 Retained earnings 11,046,386 10,514,759 Unrealized appreciation (depreciation) on investment securities available for sale (922,837) (800,022) ----------- ----------- Total stockholders' equity 18,167,809 17,757,597 ----------- ----------- Total liabilities and stockholders' equity $157,053,032 $158,140,485 ============ ============
See Notes to Consolidated Financial Statements 3 CARDINAL BANKSHARES CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations For the Three Months ended March 31, 2000 and 1999 (Unaudited) - --------------------------------------------------------------------------------
Three Months Ended March 31, 2000 1999 (Unaudited) (Unaudited) INTEREST INCOME: Loans and fees on loans $ 1,958,625 $ 1,985,677 Federal funds sold 111,043 121,941 Taxable investment securities 588,655 707,952 Investment securities exempt from federal tax 219,827 13,868 Deposits with banks 18,820 0 ---------- --------- Total interest income 2,896,970 2,829,438 INTEREST EXPENSE ON DEPOSITS: Deposits 1,453,306 1,417,749 Federal funds purchased 0 0 Other borrowed funds 1,508 0 ---------- --------- Total interest expense 1,454,814 1,417,749 ---------- --------- Net interest income 1,442,156 1,411,689 PROVISION FOR CREDIT LOSSES 120,000 30,000 ---------- ---------- Net interest income after provision for loan loss 1,322,156 1,381,689 NON INTEREST INCOME: Service charges on deposit accounts 48,606 38,627 Other service charges and fees 9,773 0 Net realized gains on sales of Securities 0 0 Other income 19,571 44,558 ---------- ---------- Total non interest income 77,950 83,185 NON INTEREST EXPENSE: Salaries and employee benefits 389,953 466,387 Occupancy expense 40,976 37,946 Equipment expense 70,292 58,038 Other expense 212,590 215,937 ---------- ---------- Total non interest expense 713,811 778,308 ---------- ---------- Income before income taxes 686,295 686,566 Income tax expense 160,549 178,669 ---------- ---------- Net income $ 525,746 $ 507,897 ========== ========== BASIC EARNINGS PER SHARE $ 1.03 $ .99
See Notes to Consolidated Financial Statements 4 CARDINAL BANKSHARES CORPORATION AND SUBSIDIARIES Consolidated Statement of Changes in Stockholders' Equity For the Three Months ended March 31, 2000 and 1999 (Unaudited) - --------------------------------------------------------------------------------
ACCUMULATED TOTAL OTHER STOCK- COMMON RETAINED COMPREHENSIVE HOLDERS' STOCK SURPLUS EARNINGS INCOME(LOSS) EQUITY ---------- ------- --------- ------------- -------- January 1, 1999 $5,119,110 $2,925,150 $ 9,123,733 $ 153,132 $17,321,125 Net income - - 1,965,133 - 1,965,133 Change in market value of investment securities available for sale, net of income taxes - - - (953,154) (953,154) --------- 1,011,979 Dividends paid ($1.11 per share) - - (568,147) - (568,147) Common stock purchased (4,300) - (18,385) - (22,685) Common stock reissued 2,900 - 12,425 - 15,325 --------- --------- ---------- -------- ---------- December 31, 1999 $5,117,710 $2,925,150 $10,514,759 $(800,022) $17,757,597 --------- --------- ---------- -------- ---------- Net income - - 525,746 - 525,746 Net change in unrealized Depreciation on investment Securities available for Sale - - - (122,815) (122,815) Total Comprehensive Income Dividends paid ($.53 per share) Common stock purchased (5,460) - (18,660) - (24,120) Common stock reissued 6,860 - 24,541 - 31,401 ---------- ---------- ----------- --------- ----------- March 31, 2000 $5,119,110 $2,925,150 $11,046,386 $(922,837) $18,167,809 ========== ========== =========== ========= ===========
See Notes to Consolidated Financial Statements 5 CARDINAL BANKSHARES CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows For the Nine Months ended March 31, 2000 and 1999 (Unaudited) - -------------------------------------------------------------------------------
Three Months Ended March 31, 2000 1999 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 525,746 $ 507,897 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 50,715 38,895 Accretion of discounts on securities 3,740 8,684 Amortization of loan fees 0 (11,792) Provision for loan losses 120,000 30,000 Deferred income taxes 63,269 0 Net realized gains on securities 0 0 Deferred compensation & pension expense 23,738 21,805 Changes in assets and liabilities: Accrued income 5,044 (83,238) Other assets (113,832) (151,228) Accrued interest payable 14,987 38,945 Other liabilities 177,635 4,302 -------- ----------- Net cash provided by operating activities 871,042 404,270 -------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Net (increase) in federal funds sold 1,985,000 325,000 Purchases of investment securities (5,552,959) (10,450,997) Sale of investment securities 0 0 Net decrease in int-bearing deposits 2,000,000 1,879,852 Maturity of investment securities 955,142 6,613,120 Net decrease in loans 127,496 2,685,902 Proceeds from sale of other real estate 0 0 Purchases of properties and equipment (139,066) (210,931) --------- ---------- Net cash (used) in investing activities (624,387) 841,946 --------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Net increase (decrease) in demand, NOW, and savings deposits 573,906 (4,936,847) Net (decrease) in time deposits (2,287,931) 3,087,997 Dividends paid 0 0 Net (decrease) fed funds purchased 0 0 Common Stock Purchased (24,120) 0 Common Stock Reissued 31,401 0 ---------- ---------- Net cash used in financing activities (1,706,744) (1,848,850) ---------- ---------- Net decrease in cash & cash equivalents(1,460,089) (602,634) CASH AND CASH EQUIVALENTS, BEGINNING 3,775,280 2,985,331 ---------- ---------- CASH AND CASH EQUIVALENTS, ENDING $ 2,315,191 $ 2,382,697 ========== ==========
See Notes to Consolidated Financial Statements 6 CARDINAL BANKSHARES CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows, continued For the Three Months ended March 31, 2000 and 1999 (Unaudited) - -------------------------------------------------------------------------------
2000 1999 ---- ---- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Interest paid $ 1,439,827 $ 1,378,804 ---------- ---------- Income taxes paid $ 0 $ 185,395 ---------- ---------- SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES: Other real estate acquired in settlement of loans $ 0 $ 0
See Notes to Consolidated Financial Statements 7 CARDINAL BANKSHARES CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements - -------------------------------------------------------------------------------- ITEM 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION NOTE 1. BASIS OF PRESENTATION: Cardinal Bankshares Corporation (the Company) was incorporated as a Virginia corporation on March 12, 1996 to acquire the stock of The Bank of Floyd (the Bank). The Bank was acquired by the Company on July 1, 1996 and used the pooling of interests accounting method. The consolidated financial statements as of March 31, 2000 and for the periods ended March 31, 2000 and 1999 included herein, have been prepared by Cardinal Bankshares Corporation, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the information furnished in the interim consolidated financial statements reflects all adjustments necessary to present fairly the Company's consolidated financial position, results of operations, changes in stockholders' equity and cash flows for such interim periods. Management believes that all interim period adjustments are of a normal recurring nature. These consolidated financial statements should be read in conjunction with the Company's audited financial statements and the notes thereto as of December 31, 1999, included in the Company's Annual Report for the fiscal year ended December 31, 1999. The Bank of Floyd and its wholly owned subsidiary, FBC, Inc. are organized and incorporated under the laws of the Commonwealth of Virginia. As a state chartered Federal Reserve member, the Bank is subject to regulation by the Virginia Bureau of Financial Institutions and the Federal Reserve. FBC, Inc.'s assets and operations consist primarily of a minority interest in a title insurance company. The Bank serves the counties of Floyd, Montgomery, and Roanoke, Virginia and the City of Roanoke, Virginia through four banking offices. All significant intercompany accounts and transactions have been elimi- nated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. NOTE 2. ALLOWANCES FOR CREDIT LOSSES The following is an analysis of the allowance for credit losses for the three months ended March 31.
2000 1999 ---- ---- Balance at January 1 $ 1,661,521 $ 1,668,201 Provision charged to operations 120,000 30,000 Loans charged off, net of recoveries (207,708) (1,562) __________ __________ - - Balance at March 31 $ 1,573,813 $ 1,696,639 =========== ===========
NOTE 3. COMMITMENTS AND CONTINGENCIES The Bank's exposure to credit loss in the event of nonperformance by the other party for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as for on-balance-sheet instruments. A summary of the Bank's commitments at March 31, 2000 and 1999 is as follows:
2000 1999 ---- ---- Commitments to extend credit $13,792,682 $ 7,097,000 Standby letters of credit 46,000 132,000 ----------- ----------- $13,838,682 $ 7,229,000 =========== ===========
8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS For the quarter ended March 31, 2000, the Bank earned $525,746 in net income compared to $507,897 for the quarter ended March 31, 1999. Interest income was $2,896,970 for the quarter ended March 31, 2000, compared to $2,829,438 for the same period of 1999. Interest expense for the quarter ended March 31, 2000 was $1,454,814, up $37,065 from $1,417,749 for the quarter ended March 31, 1999. The provision for credit losses was $120,000 for the quarter ended March 31, 2000 and $30,000 for the quarter ended March 31, 1999. Management believes the provision and the resulting allowance for credit losses is adequate. CHANGES IN FINANCIAL CONDITION Total assets at March 31, 2000 were $157,053,032 compared to $158,140,485 at December 31, 1999. Net loans have decreased by $247,496. CAPITAL ADEQUACY Shareholder's equity amounted to $18,167,809 at March 31, 2000, an increase of $410,212 over the December 31, 1999 balance of $17,757,597. The increase was a result of the earnings for the three months offset by a decrease in the market value of securities that are classified as available for sale. 9 Regulatory guidelines relating to capital adequacy provide minimum risk- based ratios at the Bank level which assess capital adequacy while encompassing all credit risks, including those related to off-balance sheet activities. The Bank of Floyd (a wholly owned subsidiary of Cardinal Bankshares Corporation) exceeds all regulatory capital guidelines and is considered to be well capitalized. At March 31, 2000 the Bank had a ratio of Tier 1 capital to risk-weighted assets of 13.9%, a ratio of total risk-based capital to risk-weighted assets of 15.5% and a leverage ratio of Tier 1 capital to average total assets for the quarter ended March 31, 2000 of 8.6%. 9 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS There are no matters pending legal proceedings to which the Company or any of its subsidiaries is a party or of which any of their property is subject. ITEM 2. CHANGES IN SECURITIES (a) Not applicable. (b) Not applicable ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits None. (b) Reports on Form 8-K None. 10 SIGNATURES Pursuant to the requirements of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CARDINAL BANKSHARES CORPORATION Date: May 10, 2000 By: s/Ronald Leon Moore President, Chief Executive Officer, and Principal Financial Officer 11 EX-27 2 ART. 9 FIN. DATA SCHEDULE FOR 3RD QUARTER 10QSB
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CARDINAL BANKSHARES AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET AT MARCH 31, 2000 AND THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1 3-MOS DEC-31-2000 MAR-31-2000 2,315,191 0 4,990,000 0 36,652,696 20,138,329 19,021,945 87,437,429 1,573,813 157,053,032 138,093,639 0 791,584 0 0 0 5,119,110 13,048,699 157,053,032 1,958,625 808,482 129,863 2,896,970 1,453,306 1,454,814 1,442,156 0 0 713,811 686,295 525,746 0 0 525,746 1.03 1.03 3.76 0 1,556,052 0 0 1,661,521 228,410 20,702 1,573,813 1,573,813 0 0
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