-----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, BbH7ASkAfC08hk94fOaevDYZs565/pgFONX/xxAhPM5aFqGx2jkKgWlFZ9VbN/p5 67/5wh6EJqL+LiXCieuCTg== 0000950109-97-005284.txt : 19970812 0000950109-97-005284.hdr.sgml : 19970812 ACCESSION NUMBER: 0000950109-97-005284 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970811 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: 97655433 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 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, 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) 229-2265 -------------------------------------------- (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 PROCEEDING 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 August 1, 1997: 556,525 Transitional Small Business Disclosure Format (Check One) Yes No X ----- ----- THE BANK HOLDING COMPANY AND SUBSIDIARIES ================================================================================ INDEX ----- Page No. -------- PART I. FINANCIAL INFORMATION Item 1 - Financial Statements Consolidated Balance Sheet - June 30, 1997........................3 Consolidated Statements of Income - Three Months Ended June 30, 1997 and 1996 and Six Months Ended June 30, 1997 and 1996.........................4 Consolidated Statements of Cash Flows - Six Months Ended June 30, 1997 and 1996.............................5 Notes to Consolidated Financial Statements........................6 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations..................7-11 PART II. OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K..........................12 Signatures 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS THE BANK HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET JUNE 30, 1997 (Unaudited)
Assets ------ Cash and due from banks $ 3,642,067 Securities available-for-sale, at fair value 22,667,297 Federal funds sold 2,850,000 Mortgage loans available-for-sale 285,877 Loans 88,123,703 Less allowance for loan losses 894,762 -------------- Loans, net 87,228,941 -------------- Premises and equipment 3,692,103 Goodwill 2,277,081 Other assets 1,963,538 -------------- $ 124,606,904 ============== Liabilities, Preferred Stock and Common Stockholders' Equity ------------------------------------------------------------ Deposits Noninterest-bearing demand $ 14,857,050 Interest-bearing demand 16,987,168 Savings 5,331,461 Time, $100,000 and over 14,784,143 Other time 56,151,161 -------------- Total deposits 108,110,983 Securities sold under repurchase agreements 1,130,000 Debentures payable 76,924 Other liabilities 2,111,070 -------------- Total liabilities 111,428,977 -------------- 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 3,610,204 Unrealized losses on securities available-for-sale, net of taxes (152,963) -------------- Total common stockholders' equity 10,731,727 -------------- $ 124,606,904 ==============
See Notes to Consolidated Financial Statements. 3 THE BANK HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED JUNE 30, 1997 AND 1996 AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (Unaudited)
Three Months Ended June 30, Six Months Ended June 30, 1997 1996 1997 1996 ------------- ------------ ------------ ------------ Interest income Loans $ 2,368,000 $ 2,099,094 $ 4,639,585 $ 4,202,238 Taxable securities 327,593 285,043 643,370 512,684 Nontaxable securities 1,292 6,354 3,941 13,236 Federal funds sold 52,993 29,763 113,497 89,596 ------------- ------------ ------------ ------------ Total interest income 2,749,878 2,420,254 5,400,393 4,817,754 ------------- ------------ ------------ ------------ Interest expense Deposits 1,244,372 1,053,832 2,441,187 2,133,777 Federal funds purchased and securities sold under agreements to repurchase 613 7,217 652 7,217 Note payable - 13,648 - 24,407 Debentures payable 1,452 2,182 3,052 4,004 ------------- ------------ ------------ ------------ Total interest expense 1,246,437 1,076,879 2,444,891 2,169,405 ------------- ------------ ------------ ------------ Net interest income 1,503,441 1,343,375 2,955,502 2,648,349 Provision for loan losses 15,000 60,000 35,000 75,000 ------------- ------------ ------------ ------------ Net interest income after provision for loan losses 1,488,441 1,283,375 2,920,502 2,573,349 ------------- ------------ ------------ ------------ Other income Service charges on deposit accounts 140,636 142,473 272,536 269,247 Security transactions, net - 14,663 - 14,663 Gain on sale of mortgage loans 118,449 150,557 194,767 310,306 Other operating income 30,685 57,626 74,732 131,041 ------------- ------------ ------------ ------------ 289,770 365,319 542,035 725,257 ------------- ------------ ------------ ------------ Other expense Salaries and employee benefits 514,211 484,992 1,025,620 1,040,036 Equipment expense 77,278 70,460 166,711 135,983 Occupancy expense 79,236 79,976 166,912 154,328 Goodwill amortization 46,157 46,157 92,314 92,314 Other operating expenses 347,022 350,450 723,590 676,950 ------------- ------------ ------------ ------------ 1,063,904 1,032,035 2,175,147 2,099,611 ------------- ------------ ------------ ------------ Income before income taxes 714,307 616,659 1,287,390 1,198,995 Income tax expense 276,327 227,015 502,228 456,265 ------------- ------------ ------------ ------------ Net income $ 437,980 $ 389,644 $ 785,162 $ 742,730 ============= ============ ============ ============ Per share of common stock Net income $ 0.70 $ 0.55 $ 1.24 $ 1.16 ============= ============ ============ ============ Dividends $ - $ - $ - $ - ============= ============ ============ ============
See Notes to Consolidated Financial Statements. 4 THE BANK HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (Unaudited)
1997 1996 -------------- -------------- OPERATING ACTIVITIES Net income $ 785,162 $ 742,730 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 229,662 218,703 Provision for loan losses 35,000 75,000 Provision for bond losses 25,000 - Gain on sales of securities available-for-sale - (14,663) (Increase) decrease in mortgage loans available-for-sale 1,855,631 (61,123) Loss on sales of other real estate - 5,531 Gain on sale of premises and equipment (9,338) - Increase in interest receivable (59,554) (41,631) Increase in interest payable 280,167 120,026 Other operating activities 187,879 381,553 -------------- -------------- Net cash provided by operating activities 3,329,609 1,426,126 -------------- -------------- INVESTING ACTIVITIES Purchases of securities available-for-sale (5,490,688) (6,488,125) Proceeds from sales of securities available-for-sale - 1,018,650 Proceeds from maturities of securities available-for-sale 4,241,522 3,939,840 Net (increase) decrease in Federal funds sold 370,000 (60,000) Net increase in loans (7,207,433) (2,500,624) Proceeds from sales of other real estate - 171,814 Purchase of premises and equipment (33,484) (554,114) Proceeds from sale of premises and equipment 134,511 - -------------- -------------- Net cash used in investing activities (7,985,572) (4,472,559) -------------- -------------- FINANCING ACTIVITIES Net increase in deposits 3,668,926 3,163,665 Net increase in repurchase agreements 1,130,000 - Repayment of note payable - (500,000) -------------- -------------- Net cash provided by financing activities 4,798,926 2,663,665 -------------- -------------- Net increase (decrease) in cash and due from banks 142,963 (382,768) Cash and due from banks at beginning of period 3,499,104 3,964,825 -------------- -------------- Cash and due from banks at end of period $ 3,642,067 $ 3,582,057 ============== ============== CASH FLOW INFORMATION Cash paid during the period for: Interest $ 2,164,724 $ 2,049,379 Income taxes $ 466,533 $ 344,500 NONCASH INVESTING ACTIVITIES Real estate acquired through foreclosure $ 167,691 $ 137,696 ============== ============== Unrealized (gains) losses on securities available-for-sale $ (48,433) $ 315,579 ============== ==============
See Notes to Consolidated Financial Statements. 5 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 six month periods ended June 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 $97,848 for the three and six month periods ended June 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. 6 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, 1997, the liquidity ratios of both Banks, as determined under guidelines established by regulatory authorities, were satisfactory. At June 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 of Bank of Holding Spalding Henry Regulatory Company County County Requirement --------- -------- -------- ----------- Leverage capital ratios 7.26% 9.21% 9.43% 4.00% Risk-based capital ratios: Core capital 9.40 12.26 11.88 4.00 Total capital 10.36 13.48 12.61 8.00
7 Financial Condition Following is a summary of the Company's balance sheets for the periods indicated:
June 30, December 31, 1997 1996 Increase (Decrease) ---------- ------------------ -------------------------- (Dollars in Thousands) Amount Percent ------------------------------ ----------- ---------- Cash and due from banks $ 3,642 $ 3,499 $ 143 4.09 % Securities 22,667 21,395 1,272 5.95 Federal funds sold 2,850 3,220 (370) (11.49) Loans 87,515 82,368 5,147 6.25 Premises and equipment 3,692 3,921 (229) (5.84) Goodwill 2,277 2,369 (92) (3.88) Other assets 1,964 1,796 168 9.35 ----------- ------------ ----------- $ 124,607 $ 118,568 $ 6,039 5.09 =========== ============ =========== Deposits $ 108,111 $ 104,442 $ 3,669 3.51 % Securities sold under repurchase agreements 1,130 - 1,130 100.00 Other borrowings 77 77 - - Other liabilities 2,111 1,589 522 32.85 Preferred stock 2,446 2,446 - - Common stockholders' equity 10,732 10,014 718 7.17 ----------- ------------ ----------- $ 124,607 $ 118,568 $ 6,039 5.09 =========== ============ ===========
As indicated in the above table, the Company's total assets during 1997 have grown at a rate of 5.09%. This increase was primarily the result of loan growth during the second quarter of 1997. The increase was funded by a growth in deposits and use of securities sold under repurchase agreements. 8 Results of Operations For The Three Months Ended June 30, 1997 and 1996 and For The Six Months Ended June 30, 1997 and 1996 Following is a summary of the Company's operations for the periods indicated.
Three Months Ended June 30, ---------------------------- 1997 1996 Increase (Decrease) ------------ ----------- -------------------------- (Dollars in Thousands) Amount Percent ---------------------------- ----------- ---------- Interest income $ 2,750 $ 2,420 $ 330 13.64 % Interest expense 1,247 1,077 170 15.78 Net interest income 1,503 1,343 160 11.91 Provision for loan losses 15 60 (45) (75.00) Other income 290 366 (76) (20.77) Other expense 1,064 1,032 32 3.10 Pretax income 714 617 97 15.72 Income taxes 276 227 49 21.59 Net income 438 390 48 12.31 Three Months Ended June 30, ---------------------------- 1997 1996 Increase (Decrease) ------------ ----------- -------------------------- (Dollars in Thousands) Amount Percent ---------------------------- ----------- ---------- Interest income $ 5,400 $ 4,818 $ 582 12.07 % Interest expense 2,445 2,169 276 12.72 Net interest income 2,955 2,649 306 11.55 Provision for loan losses 35 75 (40) (53.33) Other income 542 725 (183) (25.24) Other expense 2,175 2,100 75 3.57 Pretax income 1,287 1,199 88 7.34 Income taxes 502 456 46 10.09 Net income 785 743 42 5.65
As indicated in the above tables, the Company's net interest income has increased by $160,000 and $306,000 for the three and six month periods in 1997 as compared to the same periods in 1996. The Company's net interest margin increased slightly during the first six months of 1997 to 5.46% from 5.45% for the previous year. The provision for loan losses has decreased by $45,000 and $40,000 during the second quarter and first six months of 1997, as compared to the same periods in 1996. This change is due to a decrease of $67,000 in net charge-offs for the first six months of 1997 as compared to the previous year. The Company's reserve for loan losses amounted to 1.02% at June 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. 9 Information with respect to nonaccrual, past due and restructured loans at June 30, 1997 and 1996 is as follows:
June 30, ---------------------------- 1997 1996 ------------- ----------- (Dollars in Thousands) ---------------------------- Nonaccrual loans $ 168 $ - Loans contractually past due ninety days or more as to interest or principal payments and still accruing 198 146 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 2 - 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. 10 Information regarding certain loans and allowance for loan loss data through June 30, 1997 and 1996 is as follows:
Six Months Ended June 30, ---------------------------- 1997 1996 ------------ ------------ (Dollars in Thousands) ---------------------------- Average amount of loans outstanding $ 83,289 $ 75,412 ============ ============ Balance of allowance for loan losses at beginning of period $ 882 $ 868 ============ ============ Loans charged off Commercial and financial $ 1 $ - Real estate mortgage - 68 Instalment 31 41 ------------ ------------ 32 109 ------------ ------------ Loans recovered Commercial and financial - - Real estate mortgage - 16 Instalment 10 4 ------------ ------------ 10 20 ------------ ------------ Net charge-offs 22 89 ------------ ------------ Additions to allowance charged to operating expense during period 35 75 ------------ ------------ Balance of allowance for loan losses at end of period $ 895 $ 854 ============ ============ Ratio of net loans charged off during the period to average loans outstanding 0.03 0.12 ============ ============
Other income has decreased by $76,000 and $183,000 during the second quarter and first six months of 1997 as compared to the same periods in 1996. The changes are due primarily to decreases in gains on sales of mortgage loans of $32,000 and $116,000, respectively. Other operating expenses have increased by $32,000 and $75,000 during the second quarter and the first six months of 1997 as compared to the same periods in 1996. The increases in other expenses are due primarily to increases in equipment expenses of $31,000 and other operating expenses of $47,000 for the first six months of 1997 as compared to the previous year. The Company's provision for income taxes increased by $49,000 and $46,000 during the second quarter and first six months, respectively, as compared to the same periods in 1996 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. 11 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, 1997 12 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 FINANCIAL DATA SCHEDULE
9 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 3,642,067 0 2,850,000 0 22,667,297 0 0 88,123,703 894,762 124,606,904 108,110,983 1,130,000 2,111,070 76,924 2,446,200 0 2,782,625 7,949,102 124,606,904 4,639,585 647,311 113,497 5,400,393 2,441,187 3,704 2,955,502 35,000 0 2,175,147 1,287,390 0 0 0 785,162 1.24 0 5.46 168,000 198,000 0 0 882,000 32,000 10,000 895,000 895,000 0 0
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