-----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, KsT8DggKgrU4O2ZHoujLVWp431CQ5dzNVvcr2v6ZYFuBeC76+4LcbXedR9NF+bqU 3Ulq2A2gEI1oQdLOlQ5Efw== 0000931763-96-000457.txt : 19960911 0000931763-96-000457.hdr.sgml : 19960911 ACCESSION NUMBER: 0000931763-96-000457 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960812 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANK HOLDING CO CENTRAL INDEX KEY: 0000907584 STANDARD INDUSTRIAL CLASSIFICATION: 6022 IRS NUMBER: 582060134 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 033-64606 FILM NUMBER: 96608004 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 10-QSB FOR 2ND QUARTER ENDED 6/30/96 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 JUNE 30, 1996 ---------------------- [ ] 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 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 August 1, 1996: 556,525 Transitional Small Business Disclosure Format (Check One) Yes No X --- --- THE BANK HOLDING COMPANY - - -------------------------------------------------------------------------------- INDEX ----- PAGE ---- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET - JUNE 30, 1996................. 3 CONSOLIDATED STATEMENTS OF INCOME - THREE MONTHS ENDED JUNE 30, 1996 AND 1995 AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995............................. 4 CONSOLIDATED STATEMENTS OF CASH FLOWS - SIX MONTHS ENDED JUNE 30, 1996 AND 1995....................... 5 AND 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS................. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS................... 8-13 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.......................... 14 SIGNATURES 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS THE BANK HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET JUNE 30, 1996 (UNAUDITED)
ASSETS - - ------ Cash and due from banks $ 3,582,057 Securities available for sale, at fair value 20,233,034 Federal funds sold 2,450,000 Loans 76,834,879 Less allowance for loan losses 853,605 --------------- Loans, net 75,981,274 --------------- Mortgage loans available for sale 1,453,599 Premises and equipment, net 3,763,939 Goodwill 2,461,709 Other assets 2,120,242 --------------- $ 112,045,854 =============== LIABILITIES, PREFERRED STOCK AND COMMON STOCKHOLDERS' EQUITY - - ------------------------------------------------------------ Deposits Noninterest-bearing demand $ 15,422,580 Interest-bearing demand 16,525,229 Savings 5,214,902 Time, $100,00 and over 12,972,145 Other time 48,170,470 --------------- Total deposits 98,305,326 Debentures payable 91,540 Other liabilities 1,830,729 --------------- Total liabilities 100,227,595 --------------- 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 2,460,577 Unrealized losses on securities available for sale, net of taxes (363,004) --------------- Total common stockholders' equity 9,372,059 --------------- $ 112,045,854 ===============
SEE NOTE TO CONSOLIDATED FINANCIAL STATEMENTS. 3 THE BANK HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED JUNE 30, 1996 AND 1995 AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, --------------------------- ---------------------------- 1996 1995 1996 1995 ----------- ----------- ------------ ------------ INTEREST INCOME Interest and fees on loans $ 2,099,094 $ 2,091,158 $ 4,202,238 $ 4,218,922 Interest on taxable securities 285,043 231,443 512,684 458,510 Interest on nontaxable securities 6,354 8,025 13,236 16,061 Interest on Federal funds sold 29,763 52,858 89,596 59,538 ----------- ----------- ------------ ------------ 2,420,254 2,383,484 4,817,754 4,753,031 ----------- ----------- ------------ ------------ INTEREST EXPENSE Interest on deposits 1,053,832 1,090,847 2,133,777 2,093,843 Interest on Federal funds purchased and securities sold under agreements to repurchase 7,217 3,925 7,217 23,124 Interest on note payable 13,648 32,014 24,407 70,086 Interest on debentures payable 2,182 2,423 4,004 4,846 ----------- ----------- ------------ ------------ 1,076,879 1,129,209 2,169,405 2,191,899 ----------- ----------- ------------ ------------ Net interest income 1,343,375 1,254,275 2,648,349 2,561,132 PROVISION FOR LOAN LOSSES 60,000 15,000 75,000 60,000 ----------- ----------- ------------ ------------ Net interest income after provision for loan losses 1,283,375 1,239,275 2,573,349 2,501,132 ----------- ----------- ------------ ------------ OTHER INCOME Service charges on deposit accounts 142,473 126,323 269,247 250,219 Security transactions, net 14,663 - 14,663 (870) Gain on sale of mortgage loans 150,557 54,795 310,306 58,222 Other 57,626 44,018 131,041 107,136 ----------- ----------- ------------ ------------ 365,319 225,136 725,257 414,707 ----------- ----------- ------------ ------------ OTHER EXPENSE Salaries and employee benefits 484,992 444,335 1,040,036 901,857 Equipment expense 70,460 57,708 135,983 119,329 Occupancy expense 79,976 67,797 154,328 131,581 Goodwill amortization 46,157 46,157 92,314 92,314 Other operating expenses 350,450 358,520 676,950 728,335 ----------- ----------- ------------ ------------ 1,032,035 974,517 2,099,611 1,973,416 ----------- ----------- ------------ ------------ Income before income taxes 616,659 489,894 1,198,995 942,423 APPLICABLE INCOME TAXES 227,015 173,188 456,265 334,399 ----------- ----------- ------------ ------------ Net income $ 389,644 $ 316,706 $ 742,730 $ 608,024 =========== =========== =========== ============ PER SHARE OF COMMON STOCK Net income $ 0.55 $ 0.55 $ 0.55 $ 0.55 =========== =========== =========== ============ Dividends $ - $ - $ - $ - =========== =========== =========== ============
SEE NOTE TO CONSOLIDATED FINANCIAL STATEMENTS. 4 THE BANK HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (UNAUDITED)
1996 1995 ---------------- ---------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 742,730 $ 608,024 ---------------- ---------------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 218,703 199,285 Provision for loan losses 75,000 60,000 (Gain) loss on sales of securities available for sale (14,663) 870 Increase in mortgage loans available for sale (61,123) (126,390) (Gain) loss on sales of other real estate 5,531 (2,697) Increase (decrease) in taxes payable 58,871 (76,316) (Increase) decrease in interest receivable (41,631) 11,070 Increase (decrease) in interest payable 120,026 (439,741) Other assets and liabilities, net 322,682 (92,039) ---------------- ---------------- Total adjustments 683,396 (465,958) ---------------- ---------------- Net cash provided by operating activities 1,426,126 142,066 ---------------- ---------------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of securities available for sale (6,488,125) - Proceeds from sales of securities available for sale 1,018,650 499,063 Proceeds from maturities of securities available for sale 3,939,840 130,763 Increase in Federal funds sold, net (60,000) (6,505,000) (Increase) decrease in loans, net (2,500,624) 4,779,099 Proceeds from sales of other real estate 171,814 358,180 Purchase of premises and equipment (554,114) (128,500) Purchase of Federal Home Loan Bank stock - (148,200) ---------------- ---------------- Net cash used in investing activities (4,472,559) (1,014,595) ---------------- ---------------- CASH FLOWS FROM FINANCING ACTIVITIES Increase in deposits, net 3,163,665 4,969,513 Decrease in Federal funds purchased and securities sold under agreements to repurchase - (3,010,000) Repayment of note payable (500,000) - Cash dividends paid - (139,131) ---------------- ---------------- Net cash provided by financing activities 2,663,665 1,820,382 ---------------- ----------------
5 THE BANK HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (UNAUDITED)
1996 1995 ------------ ------------ Net increase (decrease) in cash and due from banks $ (382,768) $ 947,853 Cash and due from banks at beginning of period 3,964,825 3,391,362 ------------ ------------ Cash and due from banks at end of period $ 3,582,057 $ 4,339,215 ============ ============ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period for: Interest $ 2,049,379 $ 2,631,640 Income taxes $ 344,500 $ 410,715 SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITIES Real estate acquired through foreclosure $ 137,696 $ 171,125 ============ ============ Unrealized (gains) losses on securities available for sale $ 315,579 $ (262,582) ============ ============
SEE NOTE TO CONSOLIDATED FINANCIAL STATEMENTS. 6 THE BANK HOLDING COMPANY AND SUBSIDIARIES NOTE 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 six month periods ended June 30, 1996 are not necessarily indicative of the results to be expected for the full year. 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 June 30, 1996, the liquidity ratios of both banks, as determined under guidelines established by regulatory authorities, were satisfactory. At June 30, 1996, 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 6.80% 7.87% 11.09% 4.00% Risk-based capital ratios: Core capital 8.59 10.24 13.47 4.00 Total capital 9.59 11.21 14.52 8.00
8 FINANCIAL CONDITION Following is a summary of the Company's balance sheets for the periods indicated:
JUNE 30, DECEMBER 31, 1996 1995 INCREASE (DECREASE) ----------- ----------- ------------------------- (DOLLARS IN THOUSANDS) AMOUNT PERCENT ------------------------- ----------- ----------- Cash and due from banks $ 3,582 $ 3,965 $ (383) (9.66)% Securities 20,233 19,004 1,229 6.47 Federal funds sold 2,450 2,390 60 2.51 Loans 77,435 75,086 2,349 3.13 Premises and equipment 3,764 3,336 428 12.83 Goodwill 2,462 2,554 (92) (3.60) Other assets 2,120 2,193 (73) (3.33) ----------- ----------- ----------- $ 112,046 $ 108,528 $ 3,518 3.24 =========== =========== =========== Deposits $ 98,305 $ 95,142 $ 3,163 3.32% Other borrowings 92 592 (500) (84.46) Other liabilities 1,831 1,419 412 29.03 Preferred stock 2,446 2,446 - - Common stockholders' equity 9,372 8,929 443 4.96 ----------- ----------- ----------- $ 112,046 $ 108,528 $ 3,518 3.24 =========== =========== ===========
As indicated in the above table, the Company's total assets during 1996 have grown at a rate of 3.24%. Increased deposits during the second quarter of 1996 were responsible for this growth. The deposit growth has been primarily invested in loans and securities. The Company has also fully repaid the remaining $500,000 balance due on the note payable incurred during the acquisition in October of 1994 of Henry. 9 RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995 AND FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995 Following is a summary of the Company's operations for the periods indicated.
THREE MONTHS ENDED JUNE 30, 1996 1995 INCREASE (DECREASE) ----------- ----------- ------------------------- (DOLLARS IN THOUSANDS) AMOUNT PERCENT ------------------------- ----------- ----------- Interest income $ 2,420 $ 2,383 $ 37 1.55% Interest expense 1,077 1,129 (52) (4.61) Net interest income 1,343 1,254 89 7.10 Provision for loan losses 60 15 45 300.00 Other income 366 225 141 62.67 Other expense 1032 974 58 5.95 Pretax income 617 490 127 25.92 Income taxes 227 173 54 31.21 Net income 390 317 73 23.03
SIX MONTHS ENDED JUNE 30, 1996 1995 INCREASE (DECREASE) ----------- ----------- ------------------------- (DOLLARS IN THOUSANDS) AMOUNT PERCENT ------------------------- ----------- ----------- Interest income $ 4,818 $ 4,753 $ 65 1.37% Interest expense 2,169 2,192 (23) (1.05) Net interest income 2,649 2,561 88 3.44 Provision for loan losses 75 60 15 25.00 Other income 725 415 310 74.70 Other expense 2,100 1,974 126 6.38 Pretax income 1,199 942 257 27.28 Income taxes 456 334 122 36.53 Net income 743 608 135 22.20
As indicated in the above tables, the Company's net interest income, after being relatively flat during the first quarter of the year, increased by $88,000 during the second quarter. The Company's net interest margin increased slightly during the first six months of 1996 to 5.45% from 5.21% for the previous year. 10 The provision for loan losses has increased by $45,000 and $15,000 during the second quarter and first six months of 1996, as compared to the same periods in 1995. This increase is due to the net loan growth of the loan portfolio as compared to the loan portfolio at June 30, 1995 and to increased net charge-offs incurred during the second quarter of 1996 of $80,000, the majority of which was on one real estate loan in the amount of $66,000. The Company's reserve for loan losses amounted to 1.09% at June 30, 1996 as compared to 1.14% at December 31, 1995. 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 June 30, 1996 and 1995 is as follows:
JUNE 30, ---------------------- 1996 1995 -------- ---------- (DOLLARS IN THOUSANDS) ---------------------- Nonaccrual loans $ - $ 146 Loans contractually past due ninety days or more as to interest or principal payments and still accruing 146 51 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 - - Interest income that was recorded on nonaccrual and restructured loans - -
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 June 30, 1996 and 1995 is as follows:
SIX MONTHS ENDED JUNE 30, --------------------------- 1996 1995 ----------- ------------ (DOLLARS IN THOUSANDS) --------------------------- Average amount of loans outstanding $ 75,412 $ 76,646 ========== ========== Balance of allowance for loan losses at beginning of period $ 868 $ 817 ========== ========== Loans charged off Commercial and financial $ - $ 8 Real estate mortgage 68 22 Installment 41 27 ---------- ---------- 109 57 ---------- ---------- Loans recovered Commercial and financial - 5 Real estate mortgage 16 28 Installment 4 7 ---------- ---------- 20 40 ---------- ---------- Net charge-offs 89 17 ---------- ---------- Additions to allowance charged to operating expense during period 75 60 ---------- ---------- Balance of allowance for loan losses at end of period $ 854 $ 860 ========== ========== Ratio of net loans charged off during the period to average loans outstanding .12 .02 ========== ==========
Other income has increased by $141,000 and $310,000 during the second quarter and the first six months of 1996 as compared to the same periods in 1995. The increases are due primarily to gains recognized on the sale of mortgage loans which have occurred due to increased mortgage loan originations during the second quarter of 1996. Other operating expenses have increased by $58,000 and $126,000 during the second quarter and the first six months of 1996 as compared to the same periods in 1995. The increase in other operating expenses are due primarily to increases in salaries and employee benefits of $41,000 and $138,000, respectively. 12 The Company's provision for income taxes increased by $54,000 and $122,000 during the second quarter and first six months, respectively, as compared to the same periods in 1995 due to higher pre tax income. The Company is not aware of any 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. 13 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 June 30, 1996 14 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: --------------------------------------- EX-27 2 ARTICLE 9 FINANCIAL DATA SCHEDULE
9 6-MOS DEC-31-1995 JAN-01-1996 JUN-30-1996 3,582,057 0 2,450,000 0 20,233,034 0 0 76,834,879 853,605 112,045,854 98,305,326 0 1,830,729 91,540 2,446,200 0 2,782,625 6,589,434 112,045,854 4,202,238 525,920 89,596 4,817,754 2,133,777 2,169,405 2,648,349 75,000 14,663 2,099,611 1,198,995 742,730 0 0 742,730 1.16 0 5.45 0 146,000 0 0 868,000 109,000 20,000 854,000 854,000 0 0
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