-----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, G2lG5luZxjj9Y1y+oX1mYFRLMH+i5aV9FaM9tWssE0TkCwK8iMYr5IvI1KVYWoKp cC79j50yJDmYhEd78cv6bA== /in/edgar/work/0000950134-00-009644/0000950134-00-009644.txt : 20001115 0000950134-00-009644.hdr.sgml : 20001115 ACCESSION NUMBER: 0000950134-00-009644 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEOPLES FINANCIAL CORP /MS/ CENTRAL INDEX KEY: 0000770460 STANDARD INDUSTRIAL CLASSIFICATION: [6022 ] IRS NUMBER: 640709834 STATE OF INCORPORATION: MS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12103 FILM NUMBER: 763276 BUSINESS ADDRESS: STREET 1: 152 LAMEUSE STREET STREET 2: P O BOX 529 CITY: BILOXI STATE: MS ZIP: 39530 BUSINESS PHONE: 2284355511 MAIL ADDRESS: STREET 1: P O BOX 529 STREET 2: PO BOX 559 CITY: BILOXI STATE: MS ZIP: 39533-0529 10-Q 1 d81345e10-q.txt FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 2000 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2000 --------------------------- or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0 - 30050 --------------------- PEOPLES FINANCIAL CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Mississippi 64-0709834 ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) Lameuse and Howard Avenues, Biloxi, Mississippi 39533 - ----------------------------------------------- ---------- (Address of principal executive offices) (Zip Code)
(228) 435-5511 ---------------------------------------------------- (Registrant's telephone number, including area code) 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 number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date. Peoples Financial Corporation has only one class of common stock authorized. At October 27, 2000, there were 15,000,000 shares of $1 par value common stock authorized, and 5,823,982 shares issued and outstanding. 2 PART I FINANCIAL INFORMATION PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited)
September 30, December 31, and September 30, 2000 1999 1999 - -------------------------------------------- ------------ ------------ ------------ ASSETS Cash and due from banks $ 33,062,113 $ 35,540,978 $ 35,394,245 Held to maturity securities, market value of $100,965,000 - September 30, 2000; $113,709,000 - December 31, 1999; $121,682,000 - September 30, 1999 101,976,213 115,272,790 122,612,546 Available for sale securities, at market value 43,944,913 33,075,555 27,475,855 Federal Home Loan Bank Stock, at cost 1,647,300 1,647,300 Federal funds sold 1,900,000 Loans 368,010,640 332,516,552 314,941,484 Less: Unearned income 11,349 6,985 8,525 Allowance for loan losses 7,025,868 4,338,149 4,130,145 ------------ ------------ ------------ Loans, net 360,973,423 328,171,418 310,802,814 Bank premises and equipment, net of accumulated depreciation of $11,017,000 - September 30, 2000; $10,090,000 - December 31, 1999; and $9,624,000 - September 30, 1999 18,439,156 16,960,986 17,000,090 Other real estate 167,530 94,502 138,454 Accrued interest receivable 4,614,368 3,785,623 3,621,326 Other assets 6,480,163 3,423,266 3,436,748 ------------ ------------ ------------ TOTAL ASSETS $571,305,179 $537,972,418 $522,382,078 ============ ============ ============
3 PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) (Unaudited)
September 30, December 31, and September 30, 2000 1999 1999 - -------------------------------------------- ------------- ------------- ------------- LIABILITIES & SHAREHOLDERS' EQUITY LIABILITIES: Deposits: Demand, non-interest bearing $ 75,826,785 $ 77,980,244 $ 99,246,828 Savings and demand, interest bearing 152,428,470 160,605,623 168,540,539 Time, $100,000 or more 118,660,031 91,575,980 69,657,004 Other time deposits 71,849,359 64,519,310 67,924,303 ------------- ------------- ------------- Total deposits 418,764,645 394,681,157 405,368,674 Accrued interest payable 876,751 768,943 678,609 Federal funds purchased and securities sold under agreements to repurchase 64,109,843 60,833,677 35,815,037 Borrowings from Federal Home Loan Bank 5,117,100 Notes payable 308,930 274,129 235,443 Other liabilities 3,692,554 3,647,626 4,150,411 ------------- ------------- ------------- TOTAL LIABILITIES 492,869,823 460,205,532 446,248,174 SHAREHOLDERS' EQUITY: Common Stock, $1 par value, 15,000,000 shares authorized, 5,833,982 shares issued and outstanding at September 30, 2000, 5,905,344 shares issued and outstanding at December 31, 1999 and September 30, 1999 5,833,982 5,905,344 5,905,344 Surplus 65,780,254 65,759,086 60,759,086 Undivided profits 7,264,807 6,837,628 9,948,720 Unearned compensation (579,840) (624,842) (612,886) Accumulated other comprehensive income 136,153 (110,330) 133,640 ------------- ------------- ------------- TOTAL SHAREHOLDERS' EQUITY 78,435,356 77,766,886 76,133,904 ------------- ------------- ------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 571,305,179 $ 537,972,418 $ 522,382,078 ============= ============= =============
See Selected Notes to Consolidated Financial Statements. 4 PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
For The Quarters Ended September 30, For The Nine Months Ended September 30, ------------------------------------ --------------------------------------- 2000 1999 2000 1999 ----------- ----------- ----------- ----------- INTEREST INCOME: Interest and fees on loans $ 8,658,054 $ 6,838,282 $24,487,327 $19,304,197 Interest and dividends on securities: U. S. Treasury 673,368 1,144,929 2,382,342 3,601,132 U. S. Government agencies and corporations 1,306,913 1,000,406 3,750,681 2,462,643 States and political subdivisions 133,643 105,496 402,875 346,194 Other investments 62,320 220 158,351 88,688 Interest on federal funds sold 70,225 15,278 106,416 439,188 ----------- ----------- ----------- ----------- TOTAL INTEREST INCOME 10,904,523 9,104,611 31,287,992 26,242,042 ----------- ----------- ----------- ----------- INTEREST EXPENSE: Time deposits of $100,000 or more 1,969,185 886,486 4,216,428 2,749,960 Other deposits 2,393,239 2,331,073 6,790,690 6,932,672 Borrowing from Federal Home Loan Bank 247,445 673,959 Mortgage indebtedness 2,452 2,630 7,371 8,019 Federal funds purchased and securities sold under agreements to repurchase 787,688 455,897 2,208,066 1,104,128 ----------- ----------- ----------- ----------- TOTAL INTEREST EXPENSE 5,400,009 3,676,086 13,896,514 10,794,779 ----------- ----------- ----------- ----------- NET INTEREST INCOME 5,504,514 5,428,525 17,391,478 15,447,263 Provision for losses on loans 2,735,000 30,000 2,840,000 90,000 ----------- ----------- ----------- ----------- NET INTEREST INCOME AFTER PROVISION FOR LOSSES ON LOANS 2,769,514 5,398,525 14,551,478 15,357,263 ----------- ----------- ----------- ----------- OTHER OPERATING INCOME: Trust department income and fees 206,921 201,966 689,000 677,929 Service charges on deposit accounts 1,339,990 1,182,688 3,858,776 3,568,089 Other service charges, commissions and fees 75,182 79,439 222,804 198,416 Other income 339,375 85,615 608,332 270,169 ----------- ----------- ----------- ----------- TOTAL OTHER OPERATING INCOME $ 1,961,468 $ 1,549,708 $ 5,378,912 $ 4,714,603 ----------- ----------- ----------- -----------
5 PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Continued) (Unaudited)
For The Quarters Ended September 30, For The Nine Months Ended September 30, ------------------------------------ --------------------------------------- 2000 1999 2000 1999 ----------- ----------- ----------- ----------- OTHER OPERATING EXPENSE: Salaries and employee benefits $ 2,629,269 $ 2,539,742 $ 7,913,925 $ 7,387,584 Net occupancy 329,009 316,781 832,606 732,593 Equipment rentals, depreciation and maintenance 769,114 599,988 2,069,090 1,779,535 Other expense 1,314,660 1,299,220 3,962,812 3,597,833 ----------- ----------- ----------- ----------- TOTAL OTHER OPERATING EXPENSE 5,042,052 4,755,731 14,778,433 13,497,545 ----------- ----------- ----------- ----------- INCOME (LOSS) BEFORE INCOME TAXES (311,070) 2,192,502 5,151,957 6,574,321 Income taxes (benefit) (82,000) 703,724 1,685,500 2,213,210 ----------- ----------- ----------- ----------- NET INCOME (LOSS) $ (229,070) $ 1,488,778 $ 3,466,457 $ 4,361,111 =========== =========== =========== ===========
See Selected Notes to Consolidated Financial Statements. 6 PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
Accumulated Other Common Undivided Unearned Comprehensive # of Shares Stock Surplus Profits Compensation Income ------------ ------------ ------------- ------------- ------------ ------------ Balance, January 1, 1999, as previously reported 2,952,672 $ 2,952,672 $ 63,711,758 $ 6,739,151 $ (160,900) $ 302,712 Two-for-one stock split in 2000 2,952,672 2,952,672 (2,952,672) ------------ ------------ ------------ ------------ ------------ ------------ Balance, January 1, 1999, as restated 5,905,344 5,905,344 60,759,086 6,739,151 (160,900) 302,712 Comprehensive Income: Net income 4,361,111 Net unrealized loss on available for sale securities, net of tax (169,072) Total comprehensive income Purchase of shares by ESOP (642,886) Allocation of ESOP shares 190,900 Cash dividends, ($.195 per share) (1,151,542) ------------ ------------ ------------ ------------ ------------ ------------ Balance, September 30, 1999 5,905,344 $ 5,905,344 $ 60,759,086 $ 9,948,720 $ (612,886) $ 133,640 ============ ============ ============ ============ ============ ============ Comprehensive Income Total ------------- ----------- Balance, January 1, 1999, as previously reported $ 73,545,393 Two-for-one stock split in 2000 ------------ Balance, January 1, 1999, as restated 73,545,393 Comprehensive Income: Net income $ 4,361,111 4,361,111 Net unrealized loss on available for sale securities, net of tax (169,072) (169,072) ------------- Total comprehensive income $ 4,192,039 ============= Purchase of shares by ESOP (642,886) Allocation of ESOP shares 190,900 Cash dividends, ($.195 per share) (1,151,542) ------------ Balance, September 30, 1999 $ 76,133,904 ============
7 PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Continued) (Unaudited)
Accumulated Other Common Undivided Unearned Comprehensive Comprehensive # of Shares Stock Surplus Profits Compensation Income Income ------------ ------------ ------------- ------------- ------------ ------------ ----------- Balance, January 1, 2000, as previously reported 2,952,672 $ 2,952,672 $ 68,711,758 $ 6,837,628 $ (624,842) $ (110,330) Two-for-one stock split in 2000 2,952,672 2,952,672 (2,952,672) ------------ ------------ ------------ ------------ ------------ ------------ Balance, January 1, 2000, as restated 5,905,344 5,905,344 65,759,086 6,837,628 (624,842) (110,330) Comprehensive Income: Net income 3,466,457 $ 3,466,457 Net unrealized gain on available for sale securities, net of tax 246,483 246,483 ------------ Total comprehensive income $ 3,712,940 ============ Purchase of common shares (83,068) Allocation of ESOP shares 128,070 Retirement of stock (71,362) (71,362) 21,168 (1,803,850) Cash dividends, ($.21 per share) (1,235,428) ------------ ------------ ------------ ------------ ------------ ------------ Balance, September 30, 2000 5,833,982 $ 5,833,982 $ 65,780,254 $ 7,264,807 $ (579,840) $ 136,153 ============ ============ ============ ============ ============ ============ Total ------------ Balance, January 1, 2000, as previously reported $ 77,766,886 Two-for-one stock split in 2000 ------------ Balance, January 1, 2000, as restated 77,766,886 Comprehensive Income: Net income 3,466,457 Net unrealized gain on available for sale securities, net of tax 246,483 Total comprehensive income Purchase of common shares (83,068) Allocation of ESOP shares 128,070 Retirement of stock (1,854,044) Cash dividends, ($.21 per share) (1,235,428) ------------ Balance, September 30, 2000 $ 78,435,356 ============
See Selected Notes to Consolidated Financial Statements. 8 PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For The Nine Months Ended September 30, 2000 1999 - --------------------------------------- ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 3,466,457 $ 4,361,111 Adjustments to reconcile net income to net cash provided by operating activities: Gain on sales of other real estate (449,529) Gain on sale of bank premises (317,690) Depreciation and amortization 1,359,000 1,170,000 Provision for losses on loans 2,840,000 90,000 Provision for losses on other real estate 1,677 16,355 Changes in assets and liabilities: Accrued interest receivable (828,745) (493,047) Other assets (413,739) 10,925 Accrued interest payable 107,808 (245,563) Other liabilities (83,502) 400,575 ------------- ------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 6,131,266 4,860,827 ------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from maturities and calls of held to maturity securities 48,600,000 106,390,000 Investment in held to maturity securities (35,303,423) (95,916,051) Proceeds from maturities, sales and calls of available for sale securities 172,294 1,222,174 Investment in available for sale securities (10,666,739) (14,488,796) Loans made (35,646,144) (24,172,013) Proceeds from sale of bank premises 469,065 Acquisition of premises and equipment (2,969,111) (2,246,640) Proceeds from sales of other real estate 569,000 Federal funds sold (1,900,000) Other assets (2,643,158) 346,540 ------------- ------------- NET CASH USED IN INVESTING ACTIVITIES $ (37,987,216) $ (30,195,786) ------------- -------------
9 PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (Unaudited)
For The Nine Months Ended September 30, 2000 1999 - --------------------------------------- ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Demand and savings deposits, net increase (decrease) $(10,330,612) $ 24,407,839 Time deposits, net increase (decrease) 34,414,100 (641,401) Principal payments on notes (10,197) (9,549) Cash dividends (1,235,428) (1,151,542) Retirement of stock (1,854,044) Federal funds purchased and securities sold under agreements to repurchase 3,276,166 7,764,257 Borrowings from Federal Home Loan Bank 5,117,100 ------------ ------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 29,377,085 30,369,604 ------------ ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,478,865) 5,034,645 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 35,540,978 30,359,600 ------------ ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 33,062,113 $ 35,394,245 ============ ============
See Selected Notes to Consolidated Financial Statements. 10 PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Nine Months Ended September 30, 2000 and 1999 1. The accompanying unaudited consolidated financial statements have been prepared with the accounting policies in effect as of December 31, 1999 as set forth in the Notes to the Consolidated Financial Statements of Peoples Financial Corporation and Subsidiaries (the Company). In the opinion of Management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included and are of a normal recurring nature. The accompanying unaudited consolidated financial statements have been prepared also in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulations S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. 2. The results of operations for the nine months ended September 30, 2000, are not necessarily indicative of the results to be expected for the full year. 3. Per share data is based on the weighted average shares of common stock outstanding of 5,874,958 and 5,905,344 for the nine months ended September 30, 2000 and 1999, respectively. 4. At September 30, 2000 and 1999, the total recorded investment in impaired loans amounted to $8,720,000 and $2,000. The amount of that recorded investment in impaired loans for which there is a related allowance for loan losses was $2,500,000 at September 30, 2000. The amount of that recorded investment in impaired loans for which there was no related allowance for loan losses was $6,220,000 and $2,000 at September 30, 2000 and 1999, respectively. Interest not accrued on these loans did not have a significant effect on earnings for the nine months September 30, 2000 and 1999. 5. Transactions in the allowance for loan losses were as follows: Balance, January 1, 2000 $ 4,338,149 Provision for loan losses 2,840,000 Recoveries 227,928 Loans charged off (380,209) ----------- Balance, September 30, 2000 $ 7,025,868 ===========
6. The Company has defined cash and cash equivalents to include cash and due from banks. The Company paid $13,788,706 and $11,040,342 for the nine months ended September 30, 2000 and 1999, respectively, for interest on deposits and borrowings. Income tax payments totaled $2,590,000 and $2,315,000 for the nine months ended September 30, 2000 and 1999, respectively. Loans transferred to other real estate amounted to $94,000 for the nine months ended September 30, 2000. After receiving regulatory approval, the Company transferred property with a book value of $19,000 from ORE to banking premises during the nine months ended September 30, 2000. 7. The income tax effect on the accumulated other comprehensive income was $127,000 and ($87,000) at September 30, 2000 and 1999, respectively. 11 Independent Accountants' Review Report Board of Directors Peoples Financial Corporation Biloxi, Mississippi We have reviewed the accompanying consolidated balance sheets - Securities and Exchange Commission Form 10-Q of Peoples Financial Corporation as of September 30, 2000, September 30, 1999 and December 31, 1999, and the related consolidated statements of income, retained earnings, and cash flows - Securities and Exchange Commission Form 10-Q, for the nine months ended September 30, 2000 and September 30, 1999, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of management of Peoples Financial Corporation. A review consists principally of inquires of Company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with Securities and Exchange Commission instructions for Form 10-Q and Rule 10-01 of Regulations S-X. /s/ Piltz, Williams, LaRosa & Co. PILTZ, WILLIAMS, LAROSA & CO. November 10, 2000 Biloxi, Mississippi 12 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations The following presents Management's discussion and analysis of the consolidated financial condition and results of operations of Peoples Financial Corporation and Subsidiaries (the Company) for the nine months ended September 30, 2000 and 1999. These comments highlight the significant events and should be considered in combination with the Consolidated Financial Statements included in this report on Form 10-Q. FORWARD-LOOKING INFORMATION Congress passed the Private Securities Litigation Act of 1995 in an effort to encourage corporations to provide information about a company's anticipated future financial performance. This act provides a safe harbor for such disclosure which protects the companies from unwarranted litigation if actual results are different from management expectations. This report contains forward-looking statements and reflects industry conditions, company performance and financial results. These forward-looking statements are subject to a number of factors and uncertainties which could cause the Company's actual results and experience to differ from the anticipated results and expectations expressed in such forward-looking statements. OVERVIEW Net income for the nine months ended September 30, 2000 was $3,466,000 as compared with $4,361,000 for the nine months ended September 30, 1999. During 2000, the Company recognized a gain, net of taxes, of $208,000 from the sale of bank premises, which is an unusual, non-recurring transaction. Loan demand has continued to be strong throughout 2000, with the volume of the Company's loan portfolio reaching record levels during the second and third quarters. The Company recorded a provision for loan losses of $2.7 million during the third quarter of 2000. This represents a significant charge to income based on past provision levels. This significant increase is due to the deterioration of several specific loans. Refer to the Provision for Loan Losses on page 17, for further discussion of the events that caused Management to record this provision. The following schedule compares financial highlights for the nine months ended September 30, 2000 and 1999:
For the nine months ended September 30, 2000 1999 - --------------------------------------- ---- ---- Net income per share $ 0.59 $ 0.74 Book value per share $13.44 $12.89 Return on average total assets 0.82% 1.14% Return on average shareholders' equity 5.92% 7.77% Allowance for loan losses as a % of 1.91% 1.31% loans, net of unearned discount
13 FINANCIAL CONDITION HELD TO MATURITY SECURITIES Held to maturity securities decreased $20,636,000 at September 30, 2000, as compared with September 30, 1999, as a result of the management of the Company's liquidity position. Funds available from the maturity of these securities were generally invested in available for sale securities. Gross unrealized gains for held to maturity securities were $196,000 and $428,000 and gross unrealized losses for held to maturity securities were $1,207,000 and $1,359,000 at September 30, 2000 and 1999, respectively. The following schedule reflects the mix of the held to maturity investment portfolio at September 30, 2000 and 1999:
September 30, 2000 1999 - ------------- --------------------------- --------------------------- Amount % Amount % ------------ ------------ ------------ ------------ U. S. Treasury securities $ 33,694,770 33.00% $ 63,625,282 51.90% U. S. Government agencies 62,127,942 60.90% 52,330,396 42.70% States and political subdivisions 6,153,501 6.10% 6,656,868 5.40% ------------ ------------ ------------ ------------ Totals $101,976,213 100.00% $122,612,546 100.00% ============ ============ ============ ============
AVAILABLE FOR SALE SECURITIES Available for sale securities increased $16,469,000 at September 30, 2000, as compared with September 30, 1999, as the result of the management of the Company's liquidity position, as discussed above. Gross unrealized gains were $1,030,000 and $919,000 and gross unrealized losses were $825,000 and $722,000 at September 30, 2000 and 1999, respectively. The following schedule reflects the mix of available for sale securities at September 30, 2000 and 1999:
September 30, 2000 1999 - ------------- --------------------------- --------------------------- Amount % Amount % ------------ ------------ ------------ ------------ U. S. Treasury securities $ 6,860,020 15.60% $ 5,858,130 21.30% U. S. Government agencies 28,012,446 63.70% 16,198,234 58.90% States and political subdivisions 4,203,585 9.60% 2,163,328 7.90% Other securities 4,868,862 11.10% 3,256,163 11.90% ----------- ----------- ----------- ----------- Totals $43,944,913 100.00% $27,475,855 100.00% =========== =========== =========== ===========
14 LOANS Loans increased $53,069,000 at September 30, 2000, as compared with September 30, 1999, as a result of the increased loan demand in the Company's trade area. The Company anticipates that this increased demand will continue throughout the remainder of 2000. ACCRUED INTEREST RECEIVABLE Accrued interest receivable increased $993,000 at September 30, 2000, as compared with September 30, 1999, as a result of the increase in loan volume. OTHER ASSETS Other assets increased $3,043,000 at September 30, 2000, as compared with September 30, 1999, primarily as a result of the investment in whole life insurance owned by the bank subsidiary. DEPOSITS Significant increases or decreases in total deposits or significant fluctuations among the different types of deposits are anticipated by Management as customers in the casino industry and county and municipal areas reallocate their resources periodically. As discussed above, the Company has managed its funds including planning the timing of investment maturities so as to achieve appropriate liquidity. During the third quarter of 2000, the Company acquired $30,000,000 in brokered certificates of deposit in the management of the bank subsidiary's liquidity position. FEDERAL FUNDS PURCHASED AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE Federal funds purchased and securities sold under agreements to repurchase increased $28,295,000 at September 30, 2000, as compared with September 30, 1999. This fluctuation is due to the liquidity needs of the bank subsidiary and periodic reallocation by customers of funds in non-deposit accounts. BORROWINGS FROM FEDERAL HOME LOAN BANK The Company acquired funds from the Federal Home Loan Bank during 2000 in the management of its liquidity position. SHAREHOLDERS' EQUITY AND CAPITAL ADEQUACY On March 22, 2000, the Company's Board of Directors approved a two for one stock split of the common shares of the Company. As a result of this split, which was effective April 17, 2000, shareholders holding a total of 2,952,672 shares of the Company stock received an additional 2,952,672 shares of the Company. The Consolidated Statements of Condition and Shareholders' Equity have been restated to give retroactive effect to these splits. Additionally, all share and per share data have also been given retroactive effect for this split. On May 24, 2000, the Company's Board of Directors approved the repurchase of up to 2.50% of the outstanding shares of the Company's common stock. As of September 30, 2000, 71,362 shares had been repurchased and retired. 15 Strength, security and stability have been the hallmark of the Company since its founding in 1985 and of its bank subsidiary since its founding in 1896. A strong capital foundation is fundamental to the continuing prosperity of the Company and the security of its customers and shareholders. One measure of capital adequacy is the primary capital ratio which was 15.25% at September 30, 2000, as compared with 15.75% at September 30, 1999. These ratios are well above the regulatory minimum of 6.00%. Management continues to emphasize the importance of maintaining the appropriate capital levels of the Company. RESULTS OF OPERATIONS NET INTEREST INCOME Net interest income, the amount by which interest income on loans, investments and other interest earning assets exceeds interest expense on deposits and other borrowed funds, is the single largest component of the Company's income. Management's objective is to provide the largest possible amount of income while balancing interest rate, credit, liquidity and capital risk. The following schedule summarizes net interest earnings and net yield on interest earning assets: Net Interest Earnings and Net Yield on Interest Earning Assets
Nine Months Ended September 30, (In thousands, except percentages) 2000 1999 - ---------------------------------- ------- ------- Total interest income (1) $31,494 $26,420 Total interest expense 13,897 10,795 ------- ------- Net interest earnings $17,597 $15,625 ======= ======= Net yield on interest earning assets 4.98% 4.43% ======= =======
(1) All interest earned is reported on a taxable equivalent basis using a tax rate of 34% in 2000 and 1999. The schedule on page 16 provides an analysis of the change in total interest income and total interest expense for the nine months ended September 30, 2000 and 1999. 16 Analysis of Changes in Interest Income and Interest Expense (In Thousands)
Attributable To: ------------------------------------ For the Nine For the Nine Months Ended Months Ended September 30, September 30, Increase Rate/ 2000 1999 (Decrease) Volume Rate Volume -------------- -------------- -------------- ----------- ----------- ------------ INTEREST INCOME: (1) Loans (2) $24,487 $19,304 $ 5,183 $ 3,655 $ 1,285 $ 243 Federal funds sold 106 439 (333) (357) 132 (108) Held to maturity: Taxable securities 4,654 5,392 (738) (1,126) 491 (103) Non-taxable securities 392 405 (13) (34) 23 (2) Available for sale: Taxable securities 1,479 672 807 671 68 68 Non-taxable 218 119 99 79 12 8 securities Other securities 158 89 69 219 (43) (107) ------- ------- ------- ------- ------- ------- Total $31,494 $26,420 $ 5,074 $ 3,107 $ 1,968 $ (1) ======= ======= ======= ======= ======= ======= INTEREST EXPENSE: Savings and negotiable $ 3,962 $ 4,144 $ (182) $ (224) $ 44 $ (2) interest bearing deposits Time deposits 7,046 5,539 1,507 504 919 84 Borrowings from FHLB 674 674 674 Federal funds purchased and securities sold under agreements to repurchase 2,208 1,104 1,104 851 143 110 Mortgage indebtedness 7 8 (1) (1) 1 (1) ------- ------- ------- ------- ------- ------- Total $13,897 $10,795 $ 3,102 $ 1,804 $ 1,107 $ 191 ======= ======= ======= ======= ======= =======
(1) All interest earned is reported on a taxable equivalent basis using a tax rate of 34% in 2000 and 1999. (2) Loan fees are included in these figures. Includes nonaccrual loans. 17 PROVISION FOR LOAN LOSSES Management continuously monitors the Company's relationships with its loan customers, especially those in concentrated industries such as seafood, gaming and hotel/motel, and their direct and indirect impact on its operations. A thorough analysis of current economic conditions and the quality of the loan portfolio are conducted on a quarterly basis using the latest available information. These analyses are utilized in the computation of the adequacy of the allowance for loan losses. During the period from 1993 until 1998, the Company had not recorded a provision for loan losses due to its favorable credit loss experience. Since January of 1998, the Company began providing for loan losses on a monthly basis. These monthly provisions were recorded in response to the large increase in the volume of the loan portfolio during the last several years. The Company has provided $2.7 million for its loan loss provision for the third quarter, which represents a significant increase from the prior quarters of 2000. This increase is entirely related to specific events which have negatively impacted one commercial customer, who is contemplating bankruptcy, and several personal customers, whose loans are secured by the stock of one unrelated corporation. These events, which the Company believes may result in significant potential losses, came to Management's attention subsequent to September 30, 2000. Since these potential losses existed at that date and are reasonably estimable, the Company provided for these losses for the quarter ended September 30, 2000. The reserve for possible loan losses as a percentage of gross loans was 1.91% at September 30, 2000, compared to 1.30% at the end of 1999. Consistent with its policy, at year end 1999, the Company had no commercial loans 90 days or more past due that were not on nonaccrual status, and the Company expects to continue to adhere to this policy. Management will continue to evaluate the collectability of these loans and, if necessary, additional reserves will be recorded during the fourth quarter of 2000 to cover estimated losses on these specific loans. OTHER INCOME During the nine months ended September 30, 2000, the Company realized a gain of $316,000 for book purposes as the result of the sale of one of bank premises, as mentioned previously in the Overview. SALARIES AND EMPLOYEE BENEFITS Salaries and employee benefits increased $526,000 for the nine months ended September 30, 2000, as compared with the nine months ended September 30, 1999, as the result of an increase in the number of full-time employees during this time frame due to the opening of two new branches. EQUIPMENT RENTALS, DEPRECIATION AND MAINTENANCE Equipment rentals, depreciation and maintenance increased $290,000 for the nine months ended September 30, 2000, as compared with the nine months ended September 30, 1999, as a result of increased depreciation expense in the current year resulting from the placement of new branch locations and equipment into service during 1999 and 2000. OTHER EXPENSE Other expense increased $365,000 for the nine months ended September 30, 2000, as compared with the nine months ended September 30, 1999, primarily due to the gain from the sale of other real estate of $443,000 included in other expense in 1999. LIQUIDITY Liquidity represents the Company's ability to adequately provide funds to satisfy demands from depositors, borrowers and other commitments by either converting assets to cash or accessing new or existing sources of funds. Management monitors these funds requirements in such a manner as to satisfy these demands and provide the maximum earnings on its earning assets. Deposits, payments of principal and interest on loans, proceeds from maturities of investment securities and earnings on investment securities are the principal sources of funds for the Company. At September 30, 2000, cash and due from banks, investment securities and federal funds sold were 43% of total deposits, as compared with 46% at September 30, 1999. 18 PART II OTHER INFORMATION ITEM 5 - OTHER INFORMATION None. ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS Exhibit 23 Consent of Certified Public Accountants Exhibit 27 Financial Data Schedule (b) REPORTS ON FORM 8-K None. 19 SIGNATURES Pursuant to the requirement of Section 13 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. PEOPLES FINANCIAL CORPORATION (REGISTRANT) Date: November 14, 2000 ------------------------------------- By: /s/ CHEVIS C. SWETMAN ------------------------------------- Chevis C. Swetman Chairman, President and Chief Executive Officer Date: November 14, 2000 ------------------------------------- By: /s/ LAURI A. WOOD ------------------------------------- Lauri A. Wood Chief Financial Officer and Controller (principal financial and accounting officer) 20 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - -------- ----------- 23 Consent of Certified Public Accountants 27 Financial Data Schedule
EX-23 2 d81345ex23.txt CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS 1 EXHIBIT 23 Consent of Certified Public Accountants We consent to the use of our reports, dated November 10, 2000, in Form 10-Q filing of the Peoples Financial Corporation. /s/ Piltz, Williams, LaRosa & Co. PILTZ, WILLIAMS, LAROSA & CO. Biloxi, Mississippi November 10, 2000 EX-27 3 d81345ex27.txt FINANCIAL DATA SCHEDULE
9 9-MOS DEC-31-2000 SEP-30-2000 33,062,113 0 0 0 43,944,913 101,976,213 100,965,000 368,010,640 7,025,868 571,305,179 418,764,645 0 3,692,554 308,930 0 0 5,833,982 72,601,374 571,305,179 24,487,327 6,694,249 106,416 31,287,992 11,007,118 13,896,514 17,391,478 2,840,000 0 3,962,812 5,151,957 5,151,957 0 0 3,466,457 0.59 0.59 .049 8,720,000 56,000 0 0 4,338,149 380,209 227,928 7,025,868 7,025,868 0 20,000
-----END PRIVACY-ENHANCED MESSAGE-----