-----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, WovFwvC6CP8XRoEn7joY19ErTVzaK3ITr4SrdKeUVqq3TLkT0fMq02goUwj5dKaH mJuiXkAYtnfkKHiAn7cnmg== 0000931763-97-001985.txt : 19971117 0000931763-97-001985.hdr.sgml : 19971117 ACCESSION NUMBER: 0000931763-97-001985 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANK HOLDING CO CENTRAL INDEX KEY: 0000907584 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 582060134 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 033-64606 FILM NUMBER: 97718199 BUSINESS ADDRESS: STREET 1: 201 W TAYLOR ST STREET 2: PO BOX 1439 CITY: GRIFFIN STATE: GA ZIP: 30224 BUSINESS PHONE: 4042292265 MAIL ADDRESS: STREET 2: 12 N CEDAR STREET CITY: MCDONOUGH STATE: GA ZIP: 30253 10QSB 1 FORM 10QSB UNITED STATES 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 SEPTEMBER 30, 1997 --------------------------- [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from __________ to __________ COMMISSION FILE NUMBER: 33-77920 THE BANK HOLDING COMPANY ---------------------------------------------------------- (Exact name of small business issuer as specified in its charter) GEORGIA 58-2060134 - ------------------------------- ------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 201 W. TAYLOR STREET, GRIFFIN, GEORGIA 30224 ---------------------------------------- (Address of principal executive offices) (770) 229-2675 ---------------------------------------- (Issuer's telephone number N/A --------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ______ No _____ APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of November 1, 1997: 556,525 Transitional Small Business Disclosure Format (Check One) Yes No X ---- ---- THE BANK HOLDING COMPANY - -------------------------------------------------------------------------------- INDEX ----- PAGE NO. -------- PART I. FINANCIAL INFORMATION Item 1 - Financial Statements Consolidated Balance Sheet - September 30, 1997............... 3 Consolidated Statements of Income - Three Months Ended September 30, 1997 and 1996 and Nine Months Ended September 30, 1997 and 1996............. 4 Consolidated Statements of Cash Flows - Nine Months Ended September 30, 1997 and 1996............ 5 AND 6 Notes to Consolidated Financial Statements.................... 7 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations.............. 8-12 PART II. OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K..................... 13 Signatures 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS THE BANK HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1997 (UNAUDITED)
Assets ------ Cash and due from banks $ 3,044,307 Securities available-for-sale, at fair value 25,648,330 Federal funds sold 2,260,000 Mortgage loans available-for-sale 2,277,336 Loans 87,019,821 Less allowance for loan losses 883,443 ------------ Loans, net 86,136,378 Premises and equipment 3,632,996 Goodwill 2,230,924 Other assets 2,159,491 ------------ $127,389,762 ============ LIABILITIES, PREFERRED STOCK AND COMMON STOCKHOLDERS' EQUITY ------------------------------------------------------------ Deposits Noninterest-bearing demand $ 14,975,628 Interest-bearing demand 15,406,225 Savings 5,072,608 Time, $100,000 and over 16,551,119 Other time 58,699,353 ------------ Total deposits 110,704,933 Securities sold under repurchase agreements 685,000 Debentures payable 76,924 Other liabilities 2,287,167 ------------ Total liabilities 113,754,024 ------------ Commitments and contingent liabilities Redeemable 8% preferred stock, par value $60, 50,000 shares authorized; 40,770 shares issued and outstanding 2,446,200 ------------ Common stockholders' equity Common stock, par value $5; 10,000,000 shares authorized; 556,525 shares issued and outstanding 2,782,625 Capital surplus 4,491,861 Retained earnings 4,016,159 Unrealized losses on securities available-for-sale, net of taxes (101,107) ------------ Total common stockholders' equity 11,189,538 ------------ $127,389,762 ============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 3 THE BANK HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------------- ---------------------------- 1997 1996 1997 1996 ------------ ------------- ------------- ------------ INTEREST INCOME Loans $ 2,497,761 $ 2,272,319 $ 7,137,346 $ 6,474,557 Taxable securities 336,717 292,943 980,087 805,627 Nontaxable securities 969 4,661 4,910 17,897 Federal funds sold 52,889 36,529 166,386 126,125 ------------- ------------- ------------- ------------- 2,888,336 2,606,452 8,288,729 7,424,206 ------------- ------------- ------------- ------------- INTEREST EXPENSE Deposits 1,294,058 1,125,725 3,735,245 3,259,502 Federal funds purchased and securities sold under agreements to repurchase 10,190 6,018 10,842 13,235 Note payable - - - 24,407 Debentures payable - 1,670 3,052 5,674 ------------- ------------- ------------- ------------- 1,304,248 1,133,413 3,749,139 3,302,818 ------------- ------------- ------------- ------------- Net interest income 1,584,088 1,473,039 4,539,590 4,121,388 PROVISION FOR LOAN LOSSES 15,000 40,000 50,000 115,000 ------------- ------------- ------------- ------------- Net interest income after provision for loan losses 1,569,088 1,433,039 4,489,590 4,006,388 ------------- ------------- ------------- ------------- OTHER INCOME Service charges on deposit accounts 140,400 128,088 412,936 397,335 Security transactions, net - - - 14,663 Gain on sale of mortgage loans 122,261 99,460 317,028 409,766 Other operating income 35,724 28,730 110,456 159,771 ------------- ------------- ------------- ------------- 298,385 256,278 840,420 981,535 ------------- ------------- ------------- ------------- OTHER EXPENSE Salaries and employee benefits 521,395 519,399 1,547,015 1,559,435 Equipment expense 77,992 66,718 244,703 202,701 Occupancy expense 88,936 85,482 255,848 239,810 Goodwill amortization 46,157 46,157 138,471 138,471 Other operating expenses 385,633 328,737 1,109,223 1,005,687 ------------- ------------- ------------- ------------- 1,120,113 1,046,493 3,295,260 3,146,104 ------------- ------------- ------------- ------------- Income before income taxes 747,360 642,824 2,034,750 1,841,819 APPLICABLE INCOME TAXES 292,482 253,107 794,710 709,372 ------------- ------------- ------------- ------------- Net income $ 454,878 $ 389,717 $ 1,240,040 1,132,447 ============= ============= ============= ============= PER SHARE OF COMMON STOCK Net income $ .73 $ .61 $ 1.96 1.77 ============= ============= ============= ============= Dividends $ - $ - $ - - ============= ============= ============= =============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 4 THE BANK HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED)
1997 1996 ------------ ----------- OPERATING ACTIVITIES Net income $ 1,240,040 $ 1,132,447 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 357,316 336,477 Provision for loan losses 50,000 115,000 Provision for bond losses 25,000 - Gain on sales of securities available-for-sale - (14,663) Increase in mortgage loans available-for-sale (135,828) (277,800) Loss on sales of other real estate 35,776 5,526 Gain on sale of premises and equipment (9,338) - Increase in interest receivable (328,847) (236,321) Increase in interest payable 323,713 182,931 Other operating activities 24,397 249,435 ------------ ----------- Net cash provided by operating activities 1,582,229 1,493,032 ------------ ----------- INVESTING ACTIVITIES Purchases of securities available-for-sale (10,954,438) (6,730,078) Proceeds from sale of securities available-for-sale - 998,125 Proceeds from maturities of securities available-for-sale 6,807,878 4,147,258 Net (increase) decrease in Federal funds sold 960,000 (600,000) Net increase in loans (6,129,870) (3,633,728) Proceeds from sales of other real estate 252,891 171,820 Purchase of premises and equipment (55,874) (574,697) Proceeds from sale of premises and equipment 134,511 - ------------ ----------- Net cash used in investing activities (8,984,902) (6,221,300) ------------ ----------- FINANCING ACTIVITIES Net increase in deposits 6,262,876 5,058,136 Net increase in repurchase agreements 685,000 - Repayment of note payable - (500,000) ------------ ----------- Net cash provided by financing activities 6,947,876 4,558,136 ------------ ----------- Net decrease in cash and due from banks (454,797) (170,132) Cash and due from banks at beginning of period 3,499,104 3,964,825 ------------ ----------- Cash and due from banks at end of period $ 3,044,307 $ 3,794,693 ============ ===========
5 THE BANK HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (Unaudited)
1997 1996 ---------- ---------- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period for: Interest $3,425,426 $3,119,887 Income taxes 719,533 614,394 SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITIES Real estate acquired through foreclosure $ 169,691 $ 137,696 ========== ========== Unrealized (gains) losses on securities available-for-sale $ (132,072) $ 149,620 ========== ==========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 6 THE BANK HOLDING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1. BASIS OF PRESENTATION The consolidated financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods. The results of operations for the three and nine month periods ended September 30, 1997 are not necessarily indicative of the results to be expected for the full year. NOTE 2. EARNINGS PER SHARE Earnings per share are calculated on the basis of the weighted average number of shares outstanding. Earnings used in the calculation are reduced by dividends payable to preferred stockholders of $48,924 and $146,772 for the three and nine month periods ended September 30, 1997 and 1996, respectively. NOTE 3. CURRENT ACCOUNTING DEVELOPMENTS The Financial Accounting Standards Board has issued SFAS No. 128, "Earnings Per Share". SFAS No. 128 establishes standards for computing and presenting earnings per share (EPS) and applies to entities with publicly held common stock or potential common stock. This Statement simplifies the standards for computing earnings per share previously found in APB Opinion No. 15, Earnings per Share, and makes them comparable to international EPS standards. It replaces the presentation of primary EPS with a presentation of basic EPS. It also requires dual presentation of basic and diluted EPS on the face of the statement of income for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. The effective date of this statement is for financial statements issued for periods ending after December 15, 1997. The adoption of this Statement is not expected to have a material effect on earnings per share. 7 THE BANK HOLDING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ITEM 2. The following is management's discussion and analysis of certain significant factors which have affected the financial position and operating results of the Company and its bank subsidiaries, The Bank of Spalding County (Spalding) and the First Community Bank of Henry County (Henry) during the periods included in the accompanying consolidated financial statements. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 1997, the liquidity ratios of both banks, as determined under guidelines established by regulatory authorities, were satisfactory. At September 30, 1997, the capital ratios of the Company and the Banks were adequate based on regulatory minimum capital requirements. The minimum capital requirements and the actual capital ratios for the Company are as follows:
ACTUAL ---------------------------------------------- FIRST COMMUNITY THE BANK THE BANK BANK OF HOLDING OF SPALDING HENRY REGULATORY COMPANY COUNTY COUNTY REQUIREMENT -------- ----------- --------- ----------- Leverage capital ratio 7.30% 9.31% 9.18% 4.00% Risk-based capital ratios: Core capital 9.43 12.63 11.36 4.00 Total capital 10.36 13.87 12.01 8.00
8 FINANCIAL CONDITION Following is a summary of the Company's balance sheets for the periods indicated:
INCREASE (DECREASE) SEPTEMBER 30, DECEMBER 31, ------------------ 1997 1996 AMOUNT PERCENT ------------- ------------ -------- -------- (DOLLARS IN THOUSANDS) ---------------------------------------------------- Cash and due from banks $ 3,044 $ 3,499 $ (455) (13.00)% Securities 25,648 21,395 4,253 19.88 Federal funds sold 2,260 3,220 (960) (29.81) Loans 88,414 82,368 6,046 7.34 Premises and equipment 3,633 3,921 (288) (7.35) Goodwill 2,231 2,369 (138) (5.83) Other assets 2,160 1,796 364 20.27 -------- -------- ------ $127,390 $118,568 $8,822 7.44 ======== ======== ====== Deposits $110,705 $104,442 $6,263 6.00% Securities sold under repurchase agreements 685 - 685 - Other borrowings 77 77 - - Other liabilities 2,287 1,589 698 43.93 Preferred stock 2,446 2,446 - - Common stockholders' equity 11,190 10,014 1,176 11.74 -------- -------- ------ $127,390 $118,568 $8,822 7.44 ======== ======== ======
As indicated in the above table, the Company's total assets during 1997 have grown at a rate of 7.44%. This increase was primarily the result of loan growth during the second and third quarters of 1997. This increase was funded by a growth in deposits and use of securities sold under repurchase agreements. 9 RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 Following is a summary of the Company's operations for the periods indicated.
THREE MONTHS ENDED SEPTEMBER 30, INCREASE (DECREASE) ------------------------------- ----------------------------- 1997 1996 AMOUNT PERCENT ----------- ---------- ------------- ------------ (DOLLARS IN THOUSANDS) ----------------------------------------------------------------- Interest income $ 2,888 $ 2,606 $ 282 10.82% Interest expense 1,304 1,133 171 15.09 Net interest income 1,584 1,473 111 7.54 Provision for loan losses 15 40 (25) (62.50) Other income 298 256 42 16.41 Other expense 1,120 1,046 74 7.07 Pretax income 747 643 104 16.17 Income taxes 292 253 39 15.42 Net income 455 390 65 16.67
NINE MONTHS ENDED SEPTEMBER 30, INCREASE (DECREASE) ------------------------------- ----------------------------- 1997 1996 AMOUNT PERCENT ----------- ---------- ------------- ------------ (DOLLARS IN THOUSANDS) ----------------------------------------------------------------- Interest income $ 8,289 $ 7,424 $ 865 11.65% Interest expense 3,749 3,302 447 13.54 Net interest income 4,540 4,122 418 10.14 Provision for loan losses 50 115 (65) (56.52) Other income 840 981 (141) (14.37) Other expense 3,295 3,146 149 4.74 Pretax income 2,035 1,842 193 10.48 Income taxes 795 710 85 11.97 Net income 1,240 1,132 108 9.54
As indicated in the above tables, the Company's net interest income has increased by $111,000 and $418,000 for the third quarter and first nine months of 1997, as compared to the same periods in 1996. The Company's net interest margin decreased during the first nine months of 1997 to 5.49% from 5.61% for the previous year. 10 The provision for loan losses has decreased by $25,000 and $65,000 during the third quarter and the first nine months of 1997, as compared to the same periods in 1996. This change is due to a decrease of $75,000 in net charge-offs for the first nine months of 1997 as compared to the previous year. The Company's reserve for loan losses amounted to 1.02% at September 30, 1997 as compared to 1.09% at December 31, 1996. The allowance for loan losses is maintained at a level that is deemed appropriate by management to adequately cover all known and inherent risks in the loan portfolio. Management's evaluation of the loan portfolio includes a continuing review of loan loss experience, current economic conditions which may affect the borrower's ability to pay and the underlying collateral value of the loans. Information with respect to nonaccrual, past due and restructured loans at September 30, 1997 and 1996 is as follows:
SEPTEMBER 30, ----------------------------------------- 1997 1996 ------------------ ------------------ (DOLLARS IN THOUSANDS) ----------------------------------------- Nonaccrual loans $ 484 $ 47 Loans contractually past due ninety days or more as to interest or principal payments and still accruing 190 163 Restructured loans - - Loans, now current about which there are serious doubts as to the ability of the borrower to comply with loan repayment terms - - Interest income that would have been recorded on nonaccrual and restructured loans under original terms 6 3 Interest income that was recorded on nonaccrual and restructured loans 4 2
It is the policy of the Banks to discontinue the accrual of interest income when, in the opinion of management, collection of such interest becomes doubtful. This status is accorded such interest when (1) there is a significant deterioration in the financial condition of the borrower and full repayment of principal and interest is not expected and (2) the principal or interest is more than ninety days past due, unless the loan is both well-secured and in the process of collection. Loans classified for regulatory purposes as loss, doubtful, substandard, or special mention that have not been included in the table above do not represent or result from trends or uncertainties which management reasonably expects will materially impact future operating results, liquidity or capital resources. These classified loans do not represent material credits about which management is aware of any information which causes management to have serious doubts as to the ability of such borrowers to comply with the loan repayment terms. 11 Information regarding certain loan and allowance for loan loss data through September 30, 1997 and 1996 is as follows:
NINE MONTHS ENDED SEPTEMBER 30, ----------------------------------------- 1997 1996 ------------------ ------------------ (DOLLARS IN THOUSANDS) ----------------------------------------- Average amount of loans outstanding $ 84,739 $ 76,200 ================== ================== Balance of allowance for loan losses at beginning of period $ 882 $ 868 ------------------ ------------------ Loans charged off Commercial and financial - - Real estate mortgage - 101 Installment 59 51 ------------------ ------------------ 59 152 ------------------ ------------------ Loans recovered Commercial and financial - - Real estate mortgage - 16 Installment 10 12 ------------------ ------------------ 10 28 ------------------ ------------------ Net charge-offs 49 124 ------------------ ------------------ Additions to allowance charged to operating expense during period 50 115 ------------------ ------------------ Balance of allowance for loan losses at end of period $ 883 $ 859 ================== ================== Ratio of net loans charged off during the period to average loans outstanding .06 .16 ================== ==================
Other income has increased by $42,000 during the third quarter but decreased by $141,000 for the first nine months of 1997, respectively, as compared to the same periods in 1996. The changes are due primarily to an increase of $23,000 in gains on sales of mortgage loans for the third quarter but an overall decrease of $93,000 for the first nine months of 1997. Other operating expenses have increased by $74,000 and $149,000 during the third quarter and the first nine months of 1997, respectively, as compared to the same periods in 1996. The increases in other expenses are due primarily to increases in equipment expenses of $42,000 and other operating expenses of $104,000 for the first nine months of 1997 as compared to the previous year. The Company's provision for income taxes increased by $39,000 and $85,000 during the third quarter and first nine months, respectively, as compared to the same periods in 1996 due to higher pre-tax income. The Company is not aware of any other known trends, events or uncertainties that will have or that are reasonably likely to have a material effect on its liquidity, capital resources or operations. The Company is also not aware of any current recommendations by the regulatory authorities which, if they were implemented, would have such an effect. 12 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27. Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K have been filed during the quarter ended September 30, 1997 13 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THE BANK HOLDING COMPANY BY: /s/ Charles B. Blackmon ----------------------------------------- Charles B. Blackmon, President (Principal Executive, Principal Financial and Accounting Officer) DATE: ---------------------------------------- 14 EX-27 2 FINANCIAL DATA SERVICE
9 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 3,044,307 0 2,260,000 0 25,648,330 0 0 88,413,714 883,443 127,389,762 110,704,933 685,000 2,287,167 76,924 2,446,200 0 2,782,625 8,406,913 127,389,762 7,137,346 984,997 166,386 8,288,729 3,735,245 13,894 4,539,590 50,000 0 3,295,260 2,034,750 1,240,040 0 0 1,240,040 1.96 0 5.49 484,000 190,000 0 0 882,000 59,000 10,000 883,000 883,000 0 0
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