-----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, DSFCU9UQKI9FAROqEI1w4qauCfqNbCc/wc8fTo0l8l+/57pf11fXRIaAYbjGu6vE gAePvVRY6ZAWQuwJWT71rA== 0000950144-00-006159.txt : 20000511 0000950144-00-006159.hdr.sgml : 20000511 ACCESSION NUMBER: 0000950144-00-006159 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000510 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VOLUNTEER BANCORP INC CENTRAL INDEX KEY: 0000947440 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 621271025 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-22473 FILM NUMBER: 624464 BUSINESS ADDRESS: STREET 1: 161 W MAIN ST CITY: SNEEDVILLE STATE: TN ZIP: 37879 BUSINESS PHONE: 4239219900 MAIL ADDRESS: STREET 1: 161 W MAIN ST CITY: SNEEDVILLE STATE: TN ZIP: 37879 10QSB 1 VOLUNTEER BANCORP, INC. 1 U.S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 2000 [ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------------- ----------------- Commission file number 33-94050 VOLUNTEER BANCORP, INC. (Exact name of small business issuer as specified in its charter) TENNESSEE 62-1271025 (State of other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 210 EAST MAIN STREET, ROGERSVILLE, TENNESSEE 37879 (Address of principal executive offices) (423) 272-2200 (Issuer's telephone number) - -------------------------------------------------------------------------------- (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 12, 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 CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 539,027 AS OF MARCH 31, 2000. Transitional Small Business Disclosure Format (check one); Yes [ ] No [X] 2 PART I ITEM 1. FINANCIAL STATEMENTS INDEPENDENT AUDITOR'S REVIEW REPORT To the Board of Directors Volunteer Bancorp, Inc. Rogersville, Tennessee We have reviewed the accompanying condensed consolidated balance sheets of Volunteer Bancorp, Inc. and subsidiary as of March 31, 2000 and 1999, and the related condensed consolidated statements of earnings, condensed consolidated statements of cash flows, and condensed consolidated statements of comprehensive income for the three months then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these condensed consolidated financial statements is the representation of the management of Volunteer Bancorp, Inc. A review of interim financial statements consists primarily of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted accounting standards, the objective of which is the expression of an opinion regarding the condensed consolidated financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements in order for them to be in conformity with generally accepted accounting principles. April 20, 2000 3 VOLUNTEER BANCORP, INC. AND SUBSIDIARY Condensed Consolidated Balance Sheets March 31, 2000 and 1999 (Unaudited - See Accountants' Review Report) - --------------------------------------------------------------------------------
ASSETS 2000 1999 ------ ---- ---- Cash and due from banks $ 3,195,860 $ 2,323,277 Federal fund sold 3,077,302 3,120,172 ------------------------------ Total cash and cash equivalents 6,273,162 5,443,449 Investment securities available for sale (amortized cost of $26,595,593 and $26,735,961, respectively) 25,028,065 26,641,584 Investment securities held to maturity (estimated market value of $1,028,745 and $1,359,551) 1,094,976 1,358,594 Loans, less allowances for loan losses of $911,399 and $840,974, respectively 69,407,705 60,815,308 Accrued interest receivable 988,824 908,806 Premises and equipment, net 4,037,336 4,081,830 Deferred income taxes 684,654 79,971 Other real estate 253,323 51,923 Goodwill 162,554 180,438 Other assets 326,522 144,098 ------------------------------ Total assets $ 108,257,121 $ 99,706,001 ============================== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Deposits: Non-interest bearing $ 11,110,788 $ 9,942,673 Interest bearing 88,315,879 80,086,821 ------------------------------ Total deposits 99,426,667 90,029,494 Note payable 2,495,000 2,790,000 Interest payable 720,564 710,143 Securities sold under repurchase agreements 1,335,304 1,655,888 Other accrued taxes, expenses and liabilities 228,011 218,411 ------------------------------ Total liabilities 104,205,546 95,403,936 ------------------------------ Stockholders' equity: Common stock, $0.01 par value, 1,000,000 shares authorized, 539,027 shares issued and outstanding 5,390 5,390 Additional paid-in capital 1,916,500 1,916,500 Retained earnings 3,101,552 2,438,689 Accumulated other comprehensive (loss) income (971,867) (58,514) ------------------------------ Total stockholders' equity 4,051,575 4,302,065 ------------------------------ Total liabilities and stockholders' equity $ 108,257,121 $ 99,706,001 ==============================
The accompanying notes are an integral part of these condensed consolidated financial statements. 4 VOLUNTEER BANCORP, INC. AND SUBSIDIARY Condensed Consolidated Statements of Earnings For The Three Months Ended March 31, 2000 and 1999 (Unaudited - See Accountants' Review Report) - --------------------------------------------------------------------------------
2000 1999 ---- ---- Interest Income: Interest and fees on loans $1,651,508 $1,418,762 Interest on federal funds 25,100 40,175 Interest on investment securities: Taxable 372,405 359,984 Exempt from Federal income taxes 48,880 46,138 ------------------------ Total interest income 2,097,893 1,865,059 ------------------------ Interest Expense: Interest on deposits 1,059,125 966,118 Other borrowed funds 80,703 71,973 ------------------------ Total interest expense 1,139,828 1,038,091 ------------------------ Net interest income 958,065 826,968 Provision for possible loan losses 60,000 60,000 ------------------------ Net interest income after provision for possible loan losses 898,065 766,968 ------------------------ Non-interest income: Service charges on deposits 55,154 50,361 Other service charges and fees 18,269 22,455 Securities gains -- 28,624 Other non-interest income 12,865 10,602 ------------------------ Total non-interest income 86,288 112,042 ------------------------ Non-interest expense: Salaries and employee benefits 419,133 354,790 Occupancy expense 56,795 52,982 Furniture and equipment expense 79,997 71,267 Other non-interest expense 194,055 192,440 ------------------------ Total non-interest expense 749,980 671,479 ------------------------ Income before income taxes 234,373 207,531 Income tax expense 76,067 66,515 ------------------------ Net income $ 158,306 $ 141,016 ======================== Income per common share $ 0.29 $ 0.26 ======================== Common shares outstanding 539,027 539,027 ========================
The accompanying notes are an integral part of these condensed consolidated financial statements. 5 VOLUNTEER BANCORP, INC. AND SUBSIDIARY Condensed Consolidated Statements of Cash Flows For The Three Months Ended March 31, 2000 and 1999 (Unaudited - See Accountants' Review Report) - --------------------------------------------------------------------------------
2000 1999 ----------- ----------- Cash Flows from Operating Activities: Net income $ 158,306 $ 141,016 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes 4,101 56,996 Provision for possible loan losses 60,000 60,000 Provision for depreciation and amortization 61,986 61,748 FHLB stock dividends (5,300) (4,600) (Gain) on securities -- (28,624) Decrease (increase) in interest receivable 39,536 (3,569) (Increase) other assets (115,151) (52,299) Increase (decrease) in other liabilities 3,919 (339,814) -------------------------- Net cash provided (used) by operating activities 207,397 (109,146) -------------------------- Cash Flows from Investing Activities: Proceeds from calls and maturity of held to maturity securities 2,653 3,883 Purchase of investment securities available for sale -- (4,539,661) Proceeds from calls and maturity of investments available for sale 455,494 1,675,000 Proceeds from sale of investments available for sale -- 2,045,025 Net (increase) in loans (2,735,277) (2,661,263) Capital expenditures (20,601) (22,257) -------------------------- Net cash (used) in investing activities (2,297,731) (3,499,273) -------------------------- Cash Flows from Financing Activities: Net increase in demand deposits, NOW accounts, IRA and savings accounts 3,596,620 6,175,918 Net increase (decrease) in certificates of deposit 1,006,000 (3,811,556) Repayment of long-term debt (295,000) (255,000) Net increase in securities sold under repurchase agreements 14,214 193,758 Repayment of short-term FHLB advances (4,500,000) -- Dividends paid (64,683) (53,903) -------------------------- Net cash (used) provided by financing activities (242,849) 2,249,217 -------------------------- (Decrease) in cash and cash equivalents (2,333,183) (1,359,202) Cash and cash equivalents beginning of period 8,606,345 6,802,651 -------------------------- Cash and cash equivalents end of period $ 6,273,162 5,443,449 ========================== Supplemental Disclosure of Cash Flow Information: Cash paid during the period for: Interest $ 1,270,658 $ 992,252 ========================== Income taxes $ 40,553 $ 172,645 ==========================
The accompanying notes are an integral part of these condensed consolidated financial statements. 6 VOLUNTEER BANCORP, INC. AND SUBSIDIARY Condensed Consolidated Statements of Comprehensive Income For The Three Months Ended March 31, 2000 and 1999 (Unaudited - See Accountants' Review Report) - --------------------------------------------------------------------------------
2000 1999 ---- ---- Net income $ 158,306 $ 141,016 --------- --------- Other comprehensive income, before tax: Unrealized (loss) gain on securities available for sale: Unrealized holding (losses) gains arising during the period (212,882) (270,752) Less: reclassification adjustment for (gains) included in net income -- (28,624) --------- --------- Other comprehensive (loss) income (212,882) (299,376) Income taxes related to other comprehensive (loss) income (80,895) (113,763) --------- --------- (131,987) (185,613) --------- --------- Total comprehensive (loss) income $ 26,319 $ (44,597) ========= =========
The accompanying notes are an integral part of these condensed consolidated financial statements. 7 VOLUNTEER BANCORP, INC. AND SUBSIDIARY Notes to Unaudited Condensed Consolidated Financial Statements Three Months Ended March, 2000 and 1999 - -------------------------------------------------------------------------------- 1. Management Opinion In the opinion of management, the accompanying unaudited condensed consolidated financial statements of Volunteer Bancorp, Inc. contain all adjustments, consisting of only normal, recurring adjustments, necessary to fairly present the financial results for the interim periods presented. The results of operations for any interim period is not necessarily indicative of the results to be expected for an entire year. These interim financial statements should be read in conjunction with the annual financial statements and notes thereto. 2. Adoption of Recently Issued Statements of Financial Accounting Standards (SFAS) Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive Income." Statement No. 130 requires the reporting of comprehensive income in addition to net income from operations. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended by SFAS No. 137, is effective for fiscal quarters beginning after June 15, 2000 unless adopted earlier. This Statement establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, (collectively referred to as derivatives) and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as (a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, (b) a hedge of the exposure to variable cash flows of a forecasted transaction, or (c) a hedge of the foreign currency exposure of a net investment in a foreign operation, an unrecognized firm commitment, an available-for-sale security, or a foreign-currency-denominated forecasted transaction. Adoption by the Company is not expected to have any material impact upon financial position or results of operations. 8 VOLUNTEER BANCORP, INC. AND SUBSIDIARY Notes to Unaudited Condensed Consolidated Financial Statements Three Months Ended March, 2000 and 1999 - -------------------------------------------------------------------------------- 3. Long-term debt The Company's long-term debt consists of a single note payable in the amount of $2,495,000 and $2,790,000 at March 31. 2000 and 1999, respectively, due an unaffiliated national bank. The interest rate on the note adjusts quarterly and is equal to the three-months London Interbank Offered Rate (Three Month LIBOR) plus 1.95% per annum or at the option of the Company, the rate on the note is equal to the lender's index rate as such rate changes from time to time. The Company may change interest rate options at any time with prior notice to the lender. Interest is payable quarterly. At March 31. 2000 the rate on the note was 8.0413% per annum. Principal is payable annually on January 31, as follows:
January 31, Principal Due ----------- ------------- 2001 325,000 2002 360,000 2003 395,000 2004 435,000 2005 470,000 2006 (Final Maturity) 510,000 ---------- $2,495,000 ==========
The loan is secured by all of the stock of Citizens Bank of East Tennessee owned by the Company. 4. Contingencies During the course of business, the Company makes various commitments and incurs certain contingent liabilities that are not presented in the accompanying balance sheet. The commitments and contingent liabilities may include various guarantees, commitments to extend credit, standby letters of credit, and litigation. In the opinion of management, no material adverse effect on the financial position, liquidity or operating results of the Company and its subsidiary is anticipated as a result of these items. 9 VOLUNTEER BANCORP, INC. AND SUBSIDIARY FINANCIAL HIGHLIGHTS AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED)
2000 1999 ---- ---- Net earnings $158,306 $141,016 Per common share data: Net earnings per common share $0.29 $0.26 Book value $7.52 $7.98 Ratios: Return on average assets 0.60% 0.57% Return on average common equity 15.53% 12.96% Net interest margin (taxable equivalent basis) 4.06% 3.71% Expense ratio 2.84% 2.72% Allowance for loan losses / loans 1.30% 1.36% Non-performing loans / loans 1.26% 0.73% Non-performing assets / loans and foreclosed properties 1.61% 0.81% Shareholders' equity / total assets 3.74% 4.31% Leverage ratio (tangible capital / tangible assets) 4.56% 4.24%
10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS OF AND FOR THE THREE AND MONTHS ENDED MARCH 31, 2000 AND 1999 OPERATING RESULTS The Company reported net income for the first quarter of $158,306, or $0.29 per common share, compared to net income of $141,016, or $0.26 for the same period a year ago. Our returns on average assets and average common equity were 0.60% and 15.53%, respectively, for the quarter compared to 0.57% and 12.96% for the same period last year. Net interest income for the first three months of 2000 increased $131,097 versus the first three months of 1999 to $958,065. The increase is attributable to growth in interest earning assets of 7.26%. Average loans grew 12.37% over the first quarter of 1999. Total Company assets were $108,257,121 at March 31, 2000 compared to $99,706,001 as of March 31, 1999. The net interest margin was 4.06% for the first quarter of 2000 compared to 3.71% for the first quarter of 1999. The yield on the investment portfolio was 6.77% for the first quarter of 2000 compared to 6.13% for the same quarter of 1999. The higher level of interest income from loans and securities was offset by an increase in the cost of interest-bearing deposits, securities sold under repurchase agreements, Federal Home Loan Bank advances, and note payable. Non-interest income for the first quarter of 2000 decreased $25,754 over the first quarter of 1999. The decrease is primarily attributable to a reduction in gains on securities transactions. Non-interest expenses for the first quarter of 2000 increased $78,501 compared to the first quarter of 1999 primarily for costs (including salaries and employee compensation) associated with overall growth. ASSET QUALITY Non-performing assets at March 31, 2000 were $1,138,000 or 1.61% of loans and foreclosed properties, which is an increase from $641,000, or 0.81% of loans and foreclosed properties at March 31, 1999. The provision for losses on loans was $60,000 for the first quarter of 2000 and 1999. At March 31, 2000, the allowance for losses on loans was 1.30% of loans and approximately 80.09% of non-performing assets. The increase in non-performing assets is primarily attributable to a real estate development loan in which no loss is anticipated. 11 The Company believes it is fully Year 2000 Compliant and has not experienced any problems that would have a material effect upon the Company's financial condition or results of operations. 12 PART II -- OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit 23.1 Consent of Welch & Associates Exhibit 27 Financial Data Schedule (for SEC use only) (b) There have been no Current Reports on Form 8-K filed during the quarter ended March 31, 2000. 11 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. VOLUNTEER BANCORP, INC. (Registrant) Date: May 9, 2000 /s/ Reed D. Matney --- --------------------------------------- Reed D. Matney, President (principal executive officer) Date: May 9, 2000 /s/ H. Lyons Price --- --------------------------------------- H. Lyons Price (principal financial and accounting officer) 12 EX-23.1 2 CONSENT OF WELCH & ASSOCIATES 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the use of our report dated April 20, 2000 included in this Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2000. Welch & Associates Nashville, Tennessee May 8, 2000 EX-27 3 FINANCIAL DATA SCHEDULE
9 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 3,195,860 0 3,077,302 0 25,028,065 1,094,976 1,028,745 70,319,104 911,399 108,257,121 99,426,667 1,335,304 948,575 2,945,000 0 0 5,390 4,046,185 108,257,121 1,651,508 421,285 25,100 2,097,893 1,059,125 1,139,828 958,065 60,000 0 749,980 234,373 158,306 0 0 158,306 0.29 0.29 8.66 262,000 624,000 0 0 842,328 2,303 11,374 911,399 911,399 0 0
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