-----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, Ck7bszvIvdrK4+7ePL816nqSAUYHIaXJRiVMR33UL0+IvwMBPESK5e20QaepgPOI j61Qi4Eonar7qWbiABCocA== 0000806853-99-000001.txt : 19990322 0000806853-99-000001.hdr.sgml : 19990322 ACCESSION NUMBER: 0000806853-99-000001 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19990319 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SVB&T CORP /NEW CENTRAL INDEX KEY: 0000806853 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 351539978 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 033-10149 FILM NUMBER: 99568744 BUSINESS ADDRESS: STREET 1: COLLEGE & MAPLE STS STREET 2: PO BOX 191 CITY: FRENCH LICK STATE: IN ZIP: 47432 BUSINESS PHONE: 8129369961 10-Q/A 1 SECURITIES & 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, 1998 _____ 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 33-10149 SVB&T Corporation 1500 Main Street Jasper, IN 47546 Telephone (812) 634-1010 State of Incorporation - Indiana I.R.S. Employer Identification No. 35-1539978 NOT APPLICABLE Former name, former address and 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, and (2) has been subject to the filing requirements for at least the past 90 days. Yes _X__ No ____ Indicate the number of shares outstanding of each of the issuer's classes of common stock. The Registrant has one class of common stock (no par value) with approximately 748,187 shares outstanding at November 11, 1998. The Registrant holds 51,813 shares in the form of Treasury Stock. SVB&T CORPORATION FORM 10-Q INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements Page No. Consolidated Balance Sheet September 30, 1998 and 1997 and December 31, 1997........... 3 Consolidated Statement of Income Three and nine months ended September 30, 1998 and 1997..... 4 Consolidated Statement of Cash Flows Nine months ended September 30, 1998 and 1997............... 5 Consolidated Statement of Changes in Shareholders' Equity Nine months ended September 30, 1998 and 1997............... 6 Notes to Consolidated Financial Statements................... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................................... 8-10 PART II. OTHER INFORMATION............................................ 11 SIGNATURES............................................................ 12 SVB&T CORPORATION CONSOLIDATED BALANCE SHEET Sept. 30, Sept. 30, Dec. 31, (unaudited) 1998 1997 1997 ASSETS: Cash and due from banks 4,635 3,243 4,474 Federal funds sold 725 0 900 Total cash and cash equivalents 5,360 3,243 5,374 Interest bearing deposits in other banks 87 17 94 Investment securities, available for sale (carried at market value) 33,714 44,082 38,621 Loans Loans, net of unearned interest 140,462 136,577 140,604 Allowance for loan losses (1,057) (1,323) (1,402) Net loans 139,405 135,254 139,202 Buildings and equipment 4,880 4,880 5,033 Other real estate 37 0 0 Interest receivable 1,306 1,228 1,319 Deferred income taxes 0 0 0 Other assets 1,127 1,147 761 Total Assets 185,916 189,851 190,404 LIABILITIES: Deposits Non-interest bearing demand 11,594 10,111 13,294 Interest bearing 148,609 149,824 152,578 Total Deposits 160,203 159,935 165,872 Federal Funds Purchased 0 4,700 0 Other Short Term Borrowings 3,500 5,000 4,000 Interest payable 781 781 824 Deferred income taxes 238 285 305 Other liabilities 1,048 703 688 Total Liabilities 165,770 171,404 171,689 SHAREHOLDERS' EQUITY: Common stock 200 200 200 Capital surplus 6,124 6,094 6,094 Retained earnings 14,327 13,033 13,274 Net unrealized gain (loss) on investment securities 272 (67) (40) Treasury stock at cost (27,100 shares) (777) (813) (813) Total Shareholders' Equity 20,146 18,447 18,715 Total Liabilities and Shareholders' Equity 185,916 189,851 190,404 The accompanying notes are an integral part of this statement. SVB&T CORPORATION CONSOLIDATED STATEMENT OF INCOME Three Months Nine Months Ended Sept. 30, Ended Sept. 30, (unaudited) 1998 1997 1998 1997 _____________________________________________________________________________ INTEREST INCOME: Loans and fees on loans 3,150 2,998 9,383 8,473 Investment securities: Taxable 372 578 1,183 1,852 Non-taxable 101 101 293 309 Federal funds sold and securities purchased under agreements to resell 67 5 141 112 Deposits with banks 3 0 3 1 Total Interest Income 3,693 3,682 11,003 10,747 INTEREST EXPENSE: Deposits 1,835 1,881 5,527 5,584 Other Short term Funds Borrowed 13 48 28 87 Total interest expense 1,848 1,929 5,555 5,671 Net interest income 1,845 1,753 5,448 5,076 Provision for loan losses 145 100 385 280 Net interest income after provision for loan losses 1,700 1,653 5,063 4,796 NON-INTEREST INCOME: Trust fees 219 217 595 547 Service charges on deposit accounts 145 139 414 363 Insurance and claims processing 40 41 133 137 Securities gains (losses), net 0 2 0 5 Other Income 74 69 185 156 Total Non-interest Income 478 468 1,327 1,208 NON-INTEREST EXPENSE: Salaries and employee benefits 838 828 2,493 2,456 Premise and equipment expense 258 298 746 861 Other real estate expense 0 0 0 12 FDIC Deposit expense 5 5 15 15 Telephone expense 27 34 87 99 Postage expense 24 27 84 83 Other expenses 312 216 838 662 Total non-interest expense 1,464 1,408 4,263 4,188 Income before income taxes 714 712 2,127 1,816 Provision for income tax 247 185 737 473 Net Income 467 527 1,390 1,343 NET INCOME PER COMMON SHARE: Primary $.62 $.70 $1.86 $1.80 Weighted average common shares outstanding 748,187 748,187 748,187 748,187 DIVIDENDS DECLARED: Cash dividends $.15 $.15 $.45 $.39 The accompanying notes are an integral part of this statement. SVB&T CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS Nine Months Ended Sept 30, (unaudited) 1998 1997 ___________________________________________________________________________ CASH FLOWS FROM OPERATING ACTIVITIES: Net income before sale of asset 1,390 1,343 Gain on Sale Asset 0 (19) Net Income 1,390 1,324 ADJUSTMENTS TO RECONCILE NET INCOME TO CASH PROVIDED FROM OPERATING ACTIVITIES: Directors Stock Option Compensation 5 0 Depreciation 253 319 Net premium amortization (discount accretion) of investment securities 24 3 Provision of loan losses 360 280 Decrease(increase) in interest receivable 19 129 (Increase) decrease in other assets (409) (255) Increase (decrease) in accrued expenses and other liabilities 358 157 Net cash flows provided by operating activities 2,000 1,957 CASH FLOWS FROM INVESTING ACTIVITIES: Net increase of interest bearing deposits in other banks 25 (17) Purchase of investment securities available for sale (14,636) (2,730) Proceeds from maturities and paydowns of investment securities available for sale 19,756 9,268 Net (increase) decrease in loans (613) (13,985) Purchase of premises and equipment (100) (208) Purchase of Sale of Asset 0 50 Net cash flows used in investing activities 4,432 (7,623) CASH FLOWS FROM FINANCING ACTIVITIES: Net increase (decrease) in deposits and short-term borrowings Non-interest bearing demand (1,699) (2,444) Total interest-bearing deposits (3,970) 10,784 Federal Funds Purchased 0 (4,170) Other Short-Term Borrowings (500) 0 Cash dividends paid (338) (291) Treasury Stock Sold 61 0 Net cash flows provided by (used in) financing activities (6,446) 3,880 Net decrease in cash equivalents (14) (1,786) Cash and cash equivalents at beginning of period 5,374 5,029 Cash and cash equivalents at end of period 5,360 3,243 Total interest paid 5,570 5,640 Total taxes paid 665 615 The accompanying notes are an integral part of this statement. SVB&T CORPORATION CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Nine Months Ended Sept. 30, (unaudited) 1998 1997 _______________________________________________________________________________ Balance, beginning of period 18,716 17,329 Net income 1,390 1,343 Cash dividends (337) (291) Net unrealized gain (loss) on investment securities 311 66 Sale of Stock 66 0 Balance, end of period 20,146 18,447 The accompanying notes are an integral part of this statement. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Principles of Consolidation - The consolidated financial statements include the accounts of SVB&T Corporation and its wholly owned subsidiary, Springs Valley Bank & Trust Company. All significant intercompany balances and transactions have been eliminated. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the periods reported, consisting only of normal adjustments, have been included in the accompanying unaudited consolidated condensed financial statements. The results of operations for nine month period ended September 30, 1997 is not necessarily indicative of those expected for the remainder of the year. The holding company had a 2 for 1 stock split for shareholders as of August 1, 1997. The shares were issued on August 11, 1997. All per share information has been restated based on this stock split. Sept. 30, 1998 Sept. 30, 1997 Dec. 31, 1997 ________________________________________________________________________________ INVESTMENT SECURITIES: U.S. treasury securities 0 0 0 U.S. Government corporations & agencies 23,910 34,353 28,395 States and political subdivisions 8,782 8,320 8,836 Mortgage - backed securities 234 331 312 Other domestic securities 197 500 500 Equity Securities 591 578 578 Total Investment Securities 33,714 44,082 38,621 Sept. 30, 1998 Sept. 30, 1997 Dec. 31, 1997 ________________________________________________________________________________ LOANS: Commercial and industrial loans 12,829 16,414 17,636 Real estate loans 78,868 77,569 79,491 Construction loans 1,037 996 1,322 Agricultural production financing and other loans to farmers 1,799 1,310 1,086 Individual loans for household and other personal expense 45,120 39,978 40,859 Economic development revenue bonds 0 0 0 Lease Financing Receivable 364 465 437 Other Loans Excluding Consumer 605 0 0 Less: Unearned income on loans (160) (155) (227) Total Loans 140,462 136,577 140,604 PART I ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SUMMARY OF OPERATING RESULTS EARNINGS ANALYSIS Net income for the first nine months of $1,390,000 represents an increase of $47,000 or 3% from the $1,343,000 reported for the same period last year. The third quarter earnings of $467,000 represents an decrease of $60,000 or 11% from the $527,000 reported for the third quarter of 1997. The income decrease is a direct result of taxes being under accrued in 1997. The bank's non-interest income has increased with income from trustee fees and service charges on accounts. Non-interest expenses have increased by an average rate of 2% over the 1997 total expenses. NET INTEREST INCOME Springs Valley Bank & Trust Company is a very liability sensitive bank. Interest bearing deposits reprice much faster than interest bearing loans and investments. In a declining environment, the bank's income increased because of a widening interest spread. Thus, our interest spreads have become larger and income has returned to a more acceptable position. The interest spread is improving. This subject is reviewed in greater detail in the following management comments. SVB&T Corporation's primary source of earnings is net interest income, which is the difference between interest earned on loans and other investments and the interest incurred for deposits. In the first nine months of 1998, net interest income increased by $372,000 or 7% for the same period in 1997. The third quarter net interest income for 1998 increased by $92,000 or 5% compared to the third quarter of 1997. The improvement in the net interest income is due to assets being deployed into higher yielding loans rather than investments and decreasing interest expense on deposits. OTHER INCOME Other income of $1,327,000 for the first three quarters of 1998 is $119,000 or 10% higher than the same period for 1997.The increase is due to increased trust income, increased service charges on deposit accounts and fees earned from the alternative investment department. Other non-interest is an important part of the profitability of the bank and all avenues of additional income are reviewed. The third quarter increase of other income is $10,000 in 1998 compared to 1997 or 2%. NON-INTEREST EXPENSES For the first nine months of 1998, other expenses increased by $75,000 or 2% compared to the same period of 1997. The three months ended September 30, 1998 total other expense increase was $56,000 or 4% increase over that same period for 1997. This increase is principally the effect of increased salaries and employee benefits. ANALYSIS OF FINANCIAL CONDITION ALLOWANCE FOR POSSIBLE LOAN LOSSES The Corporation's allowance for loan losses was $1,057,000 at September 30, 1998 compared to $1,323,000 at September 30, 1997 and $1,402,000 as of December 31, 1997. At September 30, 1998 the allowance for possible loan losses was .75% of total loans, net for unearned interest. This compares to an allowance of .97% at September 30, 1997. Net charge offs for the first nine months of 1998 were $730,000 compared to $356,000 for the same period last year. Management reviews the loan portfolio and assesses the risk and believes that the allowance of $1,057,000 is adequate. One larger credit of $56,000 was charged off during this quarter. This was a participation loan and fraud by the borrower is involved. This has been turned over to our attorneys and has been submitted to our insurance company. LIQUIDITY AND ASSET/LIABILITY MANAGEMENT The Corporation's objective in liquidity management is to manage the assets and liabilities to meet the needs of borrowers while allowing for the possibility of deposit withdrawals. The primary purpose of asset/liability management is to minimize the effect on net income of changes in interest rates and to maintain a prudent match within specified time periods of rate-sensitive assets and rate-sensitive liabilities. As of September 30, 1998 the rate-sensitive assets were 74% of rate-sensitive liabilities in the 1-180 day maturity category and 95% in the 181-365 day range. These positions are within acceptable ranges as determined by funds management policy. The Corporation's Funds Management Committee meets weekly to monitor and effect changes necessary in the liquidity and rate-sensitivity positions. CAPITAL Total shareholders' equity as of September 30, 1998 was $20,146,000 compared to $18,447,000 for the same period last year. The shareholder's equity has increased by $1,699,000 or 9% from September 30, 1997 to September 30, 1998. This increase is attributed to the unrealized loss on investment securities and profits increasing. The holding company enacted a 2 for 1 stock split on August 11, 1997. The total shares increased to 800,000 with 748,187 shares outstanding. This stock split's goal is to create a larger market for SVB&T Corporations stock at a reasonable cost. (ANALYSIS OF FINANCIAL CONDITIONS CONTINUED) As of September 30, 1998 the bank's leverage capital ratio was 10.8% which compared to 9.35% at September 30, 1997. As of September 30, 1998 the bank's total risk-based capital ratio was 14.14% compared to 15.28% at September 30, 1997. These ratios are in excess of regulatory requirements of 3% for leverage capital and 8% for total risk-based capital. YEAR 2000 The bank is working diligently to minimize the impact of any Year 2000 related problems that might occur either within the bank or outside the bank and affect the safe and sound operation of the bank. A Year 2000 committee and several sub-committees are working to complete all Y2K related activities according to the guidelines and recommendations of FFIEC. All recommended deadlines have been met to this point. The bank expects to spend a total of about $250,000 on Y2K related activities. Approximately one-half of that expense will be for hardware and software that can be capitalized and amortized over a period of time. The remainder is primarily labor costs that will be taken as an operating expense. Management does not expect this to have a substantial adverse effect on the bank's income. The bank is working on both a remediation contingency plan and a business resumption contingency plan. Management expects those to be completed no later than the FFIEC recommended guidelines date. It is impossible to assess the effect of Y2K related problems on the operation and profitability of the bank. Management plans to be able to offer limited essential banking services to its customers under even the most adverse conditions. The severity and length of any Y2K problems will determine the degree to which the contingency plans must be utilized and how much the operation and profitability of the bank are impacted. PART II OTHER INFORMATION Item 1 - LEGAL PROCEEDINGS None Item 2 - CHANGES IN SECURITIES None Item 3 - DEFAULTS UPON SENIOR SECURITIES None Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None Item 5 - OTHER INFORMATION None Item 6 - EXHIBITS AND REPORTS OF FORM 8-K None 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. SVB&T Corporation (Registrant) By: Ronald G. Seals President and Chief Executive Officer By: David Rees Principal Financial Officer Date: November 13, 1998 EX-27 2
9 9-MOS DEC-31-1998 SEP-30-1998 4,635 87 725 0 33,714 33,714 33,714 140,462 1,057 185,916 160,203 3,500 2,067 0 0 0 200 19,946 185,916 9,383 1,183 0 11,003 5,527 5,555 5,448 385 0 4,263 2,127 2,127 0 0 1,390 1.86 1.86 8.63 963 14 0 963 1,402 893 163 1,057 1,057 0 0
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