-----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, SIGUTxw8cDmSNetSfEBHA9I7+TUFK9HIOAU1FIUwKcMwUKNb3DH/ATHlLD/KnnJU kTV35YZMbDBhPD9bdRNppQ== 0000950109-96-007346.txt : 19961113 0000950109-96-007346.hdr.sgml : 19961113 ACCESSION NUMBER: 0000950109-96-007346 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 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: 1934 Act SEC FILE NUMBER: 033-64606 FILM NUMBER: 96658978 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, 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 ----------------------------------------------------------------- (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, 1996: 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, 1996.............. 3 Consolidated Statements of Income - Three Months Ended September 30, 1996 and 1995 and Nine Months Ended September 30, 1996 and 1995............. 4 Consolidated Statements of Cash Flows - Nine Months Ended September 30, 1996 and 1995.................5 and 6 Note 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 SEPTEMBER 30, 1996 (Unaudited) Assets - ------ Cash and due from banks $ 3,794,693 Investment securities available for sale, at fair value 20,454,053 Federal funds sold 2,990,000 Loans 77,933,802 Less allowance for loan losses 859,424 ----------------- Loans, net 77,074,378 Mortgage loans available for sale 1,670,276 Premises and equipment, net 3,712,905 Goodwill 2,415,552 Other assets 2,353,727 ----------------- $ 114,465,584 ================= Liabilities, Preferred Stock and Common - ---------------------------------------- Stockholders' Equity - -------------------- Deposits Noninterest-bearing demand $ 13,710,105 Interest-bearing demand 16,026,921 Savings 5,337,710 Time, $100,000 and over 13,727,645 Other time 51,397,416 ----------------- Total deposits 100,199,797 Debentures payable 91,540 Other liabilities 1,908,974 ----------------- Total liabilities 102,200,311 ----------------- 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 2,801,370 Unrealized losses on securities available for sale, net of taxes (256,783) ----------------- Total common stockholders' equity 9,819,073 ----------------- $ 114,465,584 =================
See Note to Consolidated Financial Statements. 3 THE BANK HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, ----------------------------------------- ----------------------------------------- 1996 1995 1996 1995 ------------------- ------------------- ----------------------------------------- Interest income Interest and fees on loans $ 2,272,319 $ 2,048,290 $ 6,474,557 $ 6,267,212 Interest on taxable securities 292,943 227,053 805,627 685,563 Interest on nontaxable securities 4,661 8,026 17,897 24,087 Interest on Federal funds sold 36,529 121,651 126,125 181,189 ------------------- ------------------- ------------------- ------------------- 2,606,452 2,405,020 7,424,206 7,158,051 ------------------- ------------------- ------------------- ------------------- Interest expense Interest on deposits 1,125,725 1,117,285 3,259,502 3,211,128 Interest on Federal funds purchased and securities sold under agreements to repurchase 6,018 - 13,235 23,124 Interest on note payable - 35,069 24,407 105,155 Interest on debentures payable 1,670 2,311 5,674 7,157 ------------------- ------------------- ------------------- ------------------- 1,133,413 1,154,665 3,302,818 3,346,564 ------------------- ------------------- ------------------- ------------------- Net interest income 1,473,039 1,250,355 4,121,388 3,811,487 Provision for loan losses 40,000 15,000 115,000 75,000 ------------------- ------------------- ------------------- ------------------- Net interest income after provision for loan losses 1,433,039 1,235,355 4,006,388 3,736,487 ------------------- ------------------- ------------------- ------------------- Other income Service charges on deposit accounts 128,088 131,066 397,335 381,285 Security transactions, net - - 14,663 (870) Gain on sale of mortgage loans 99,460 179,632 409,766 422,765 Gain on sale of other loans - 112,492 - 112,492 Other 28,730 53,388 159,771 160,524 ------------------- ------------------- ------------------- ------------------- 256,278 476,578 981,535 1,076,196 ------------------- ------------------- ------------------- ------------------- Other expense Salaries and employee benefits 519,399 553,047 1,559,435 1,639,815 Equipment expense 66,718 57,493 202,701 176,822 Occupancy expense 85,482 74,693 239,810 206,274 Goodwill amortization 46,157 46,157 138,471 138,471 Other operating expenses 328,737 359,396 1,005,687 1,087,732 ------------------- ------------------- ------------------- ------------------- 1,046,493 1,090,786 3,146,104 3,249,114 ------------------- ------------------- ------------------- ------------------- Income before income taxes 642,824 621,147 1,841,819 1,563,569 Applicable income taxes 253,107 224,265 709,372 558,664 ------------------- ------------------- ------------------- ------------------- Net income $ 389,717 $ 396,882 $ 1,132,447 $ 1,004,905 =================== =================== =================== =================== Per share of common stock Net income $ 0.61 $ 0.63 $ 1.77 $ 1.54 =================== =================== =================== =================== Dividends $ - $ - $ - $ - =================== =================== =================== ===================
See Note to Consolidated Financial Statements. 4 THE BANK HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (Unaudited)
- ----------------------------------------------------------------------------------------------------------------------------- 1996 1995 ---------------------- ---------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,132,447 $ 1,004,905 ---------------------- ---------------------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 336,477 303,615 Provision for loan losses 115,000 75,000 (Gain) loss on sales of securities available for sale (14,663) 870 (Increase) decrease in mortgage loans available for sale (277,800) 231,704 Gain on sale of loans other than mortgage loans - (112,492) Loss on sales of other real estate 5,526 11,440 Increase (decrease) in taxes payable 94,978 (14,551) (Increase) decrease in interest receivable (236,321) 11,398 Increase (decrease) in interest payable 182,931 (325,393) Other assets and liabilities, net 154,457 3,079 ---------------------- ---------------------- Total adjustments 360,585 184,670 ---------------------- ---------------------- Net cash provided by operating activities 1,493,032 1,189,575 ---------------------- ---------------------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of securities available for sale (6,730,078) - Proceeds from sale of securities available for sale 998,125 499,063 Proceeds from maturities of securities available for sale 4,147,258 698,910 Increase in Federal funds sold, net (600,000) (5,805,000) Proceeds from sale of loans other than mortgage loans - 1,892,047 (Increase) decrease in loans, net (3,633,728) 3,066,671 Proceeds from sales of other real estate 171,820 827,485 Purchase of premises and equipment (574,697) (318,436) Purchase of Federal Home Loan Bank stock - (148,200) ---------------------- ---------------------- Net cash provided by (used in) investing activities (6,221,300) 712,540 ---------------------- ---------------------- CASH FLOWS FROM FINANCING ACTIVITIES Increase in deposits, net 5,058,136 1,942,621 Decrease in Federal funds purchased and securities sold under agreements to repurchase - (3,010,000) Cash dividends paid on common and preferred stock - (186,849) Repayment of note payable (500,000) - ---------------------- ---------------------- Net cash provided by (used in) financing activities 4,558,136 (1,254,228) ---------------------- ----------------------
5 THE BANK HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (Unaudited)
- ----------------------------------------------------------------------------------------------------------------------------- 1996 1995 --------------------- -------------------- Net increase (decrease) in cash and due from banks $ (170,132) $ 647,887 Cash and due from banks at beginning of period 3,964,825 3,391,362 --------------------- -------------------- Cash and due from banks at end of period $ 3,794,693 $ 4,039,249 ===================== ==================== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period for: Interest $ 3,119,887 $ 3,671,957 Income taxes 614,394 573,215 SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITIES Real estate acquired through foreclosure $ 137,696 $ 523,059 ===================== ==================== Unrealized (gains) losses on securities available for sale $ 149,620 $ (349,954) ===================== ====================
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 nine month periods ended September 30, 1996 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, 1996 and 1995, respectively. 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, 1996, the liquidity ratios of both banks, as determined under guidelines established by regulatory authorities, were satisfactory. At September 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 Company County Requirement --------- ----------- ---------- ----------- Leverage capital ratio 6.96 % 8.15 % 10.79 % 4.00 % Risk-based capital ratios: Core capital 9.19 11.43 13.26 4.00 Total capital 10.21 12.56 14.16 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, --------------------- 1996 1995 Amount Percent ------------- ------------ -------- --------- (Dollars in Thousands) ---------------------------------------------------- Cash and due from banks $ 3,795 $ 3,965 $ (170) (4.29)% Securities 20,454 19,004 1,450 7.63 Federal funds sold 2,990 2,390 600 25.10 Loans 78,745 75,086 3,659 4.87 Premises and equipment 3,713 3,336 377 11.30 Goodwill 2,415 2,554 (139) 5.44 Other assets 2,354 2,193 161 7.34 ------------- ------------ -------- $ 114,466 $ 108,528 $ 5,938 5.47 ============= ============ ======== Deposits $ 100,200 $ 95,142 $ 5,058 5.32% Other borrowings 92 592 (500) (84.46) Other liabilities 1,909 1,419 490 34.53 Preferred stock 2,446 2,446 - - Common stockholders' equity $ 9,819 8,929 890 9.97 ------------- ------------ ------- $ 114,466 $ 108,528 $ 5,938 5.47
As indicated in the above table, the Company's total assets during 1996 have grown at a rate of 5.47%. Deposit growth during the second and third quarters of 1996 were responsible for this growth. The deposit growth continues to be invested primarily in higher yielding loans. The Company has also fully repaid the remaining $500,000 balance due on the note payable incurred during the acquisition of Henry in October of 1994. 9 Results of Operations For The Three Months Ended September 30, 1996 and 1995 and For The Nine Months Ended September 30, 1996 and 1995 Following is a summary of the Company's operations for the periods indicated.
Three Months Ended September 30, Increase (Decrease) --------------------- --------------------- 1996 1995 Amount Percent --------- --------- ---------- ---------- (Dollars in Thousands) ---------------------------------------------- Interest income $ 2,606 $ 2,405 $ 201 8.36% Interest expense 1,133 1,155 (22) (1.90) Net interest income 1,473 1,250 233 17.84 Provision for loan losses 40 15 25 166.67 Other income 256 477 (221) (46.33) Other expense 1,046 1,091 (45) (4.12) Pretax income 643 621 22 3.54 Income taxes 253 224 29 12.95 Net income 390 397 (7) (1.76) Three Months Ended September 30, Increase (Decrease) --------------------- --------------------- 1996 1995 Amount Percent --------- --------- ---------- ---------- (Dollars in Thousands) ---------------------------------------------- Interest income $ 7,424 $ 7,158 $ 266 3.72% Interest expense 3,302 3,347 (45) (1.34) Net interest income 4,122 3,811 311 8.16 Provision for loan losses 115 75 40 53.33 Other income 981 1,076 (95) (8.83) Other expense 3,146 3,248 (102) (3.14) Pretax income 1,842 1,564 278 17.77 Income taxes 710 559 151 27.01 Net income 1,132 1,005 127 12.64
As indicated in the above tables, the Company's net interest income, after being relatively flat during the first six months of the year, increased by $223,000 and $311,000 for the third quarter and first none months of 1996, as compared to the same periods in 1995. The Company's net interest margin increased during the first nine months of 1996 to 5.61% from 5.21% for the previous year. 10 The provision for loan losses has increased by $25,000 and $40,000 during the third quarter and first nine 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 September 30, 1995 and increased net charge-offs incurred of $124,000 for the first nine months of 1996, 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 1.08% at September 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 September 30, 1996 and 1995 is as follows:
September 30, ----------------------- 1996 1995 -------- -------- (Dollars in Thousands) ----------------------- Nonaccrual loans $ 47 $ 6 Loans contractually past due ninety days or more as to interest or principal payments and still accruing 163 25 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 3 7 Interest income that was recorded on nonaccrual and restructured loans 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. Information regarding certain loan and allowance for loan loss data through September 30, 1996 and 1995 is as follows:
Nine Months Ended September 30, -------------------------- 1996 1995 ---------- ---------- (Dollars in Thousands) -------------------------- Average amount of loans losses outstanding $ 76,200 $ 74,847 ========== ========== Balance of allowance for loan at beginning of period $ 868 $ 817 ========== ========== Loans charged off Commercial and financial $ - $ 8 Real estate mortgage 101 22 Instalment 51 39 ---------- ---------- 152 69 ---------- ---------- Loans recovered Commercial and financial - 5 Real estate mortgage 16 28 Instalment 12 10 ---------- ---------- 28 43 ---------- ---------- Net charge-offs 124 26 ---------- ---------- Addition to allowance charged to operating expenses during period 115 75 ---------- ---------- Balance of allowance for loan losses at end of period $ 859 $ 866 ========== ========== Ratio of net loans charged off during the period to average loans outstanding .16 .03 ========== ==========
Other income has decreased by $221,000 and $95,000 during the third quarter and the first nine months of 1996 as compared to the same periods in 1995. The decreases during the third quarter are due to gains recognized in 1995 on sales of loans other than mortgage of $112,000 and reduced gains on sales of mortgage loans of $80,000. The overall decrease is due primarily to the aforementioned $112,000 gain on sales of loans other than mortgage. Other operating expenses have decreased by $44,000 and $103,000 during the third quarter and the first nine months of 1996 as compared to the same periods in 1995. The decreases in other operating expenses are due primarily to increases in salaries and employee benefits of $33,000 and $80,000, respectively. 12 The Company's provision for income taxes increased by $29,000 and $151,000 during the third quarter and first nine 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 September 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: --------------------------------- Charles B. Blackmon, President (Principal Executive Principal Financial and Accounting Officer) DATE: ------------------------------ 15 EX-27 2 FDS - ARTICLE 9
9 9-MOS DEC-31-1995 JAN-01-1996 SEP-30-1996 3,794,693 0 2,990,000 0 20,454,053 0 0 77,933,802 859,424 114,465,584 100,199,797 0 1,908,974 91,540 2,446,200 0 2,782,625 7,036,448 114,465,584 6,474,557 823,524 126,125 7,424,206 3,259,502 43,316 4,121,388 115,000 14,663 3,146,104 1,841,819 1,132,447 0 0 1,132,447 1.77 0 5.61 47,000 163,000 0 0 868,000 152,000 28,000 859,000 859,000 0 0
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