-----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, Vfhj547sUvYBcISq3NptR+zfxSuVldCq5+2CALf4e9NsE7eSNfYuzAv3kK1+egcn GoCfLRVnv+pTTIgaVVQumA== /in/edgar/work/20000810/0000950144-00-009767/0000950144-00-009767.txt : 20000921 0000950144-00-009767.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950144-00-009767 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VOLUNTEER BANCORP INC CENTRAL INDEX KEY: 0000947440 STANDARD INDUSTRIAL CLASSIFICATION: [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: 690987 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 e10qsb.txt 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 JUNE 30, 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 JUNE 30, 2000. Transitional Small Business Disclosure Format (check one); Yes [ ] No [X] 2 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 June 30, 2000 and 1999, and the related condensed consolidated statements of earnings and comprehensive income for the three and six months then ended and the condensed consolidated statements of cash flows for the six 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. July 20, 2000 Nashville, Tennessee 3 VOLUNTEER BANCORP, INC. AND SUBSIDIARY Condensed Consolidated Balance Sheets June 30, 2000 and 1999 (Unaudited- See Accountants' Review Report) - --------------------------------------------------------------------------------
2000 1999 ------------- ------------- ASSETS Cash and due from banks $ 3,434,870 $ 2,944,509 Federal fund sold 975,000 2,039,916 ------------- ------------- Total cash and cash equivalents 4,409,870 4,984,425 Investment securities available for sale (amortized cost of $26,238,251 and $28,523,725, respectively) 24,701,248 27,732,369 Investment securities held to maturity (estimated market $994,634 value of and $1,069,757) 1,071,313 1,104,254 Loans, less allowances for loan losses of $964,601 and $864,726, respectively 71,476,509 62,449,085 Accrued interest receivable 1,085,257 968,747 Premises and equipment, net 4,151,205 4,002,254 Deferred income taxes 686,735 344,823 Other real estate 492,298 159,624 Goodwill 158,084 175,967 Other assets 113,884 145,396 ------------- ------------- Total assets $ 108,346,403 $ 102,066,944 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Non-interest bearing $ 11,382,147 $ 9,916,374 Interest bearing 88,180,347 82,726,838 ------------- ------------- Total deposits 99,562,494 92,643,212 Interest payable 941,680 867,555 Securities sold under repurchase agreements 1,050,288 1,692,073 Note payable 2,495,000 2,790,000 Other accrued taxes, expenses and liabilities 53,988 11,659 ------------- ------------- Total liabilities 104,103,450 98,004,499 ------------- ------------- 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 3,296,325 2,631,196 Accumulated other comprehensive income (975,262) (490,641) ------------- ------------- Total stockholders' equity 4,242,953 4,062,445 ------------- ------------- Total liabilities and stockholders' equity $ 108,346,403 $ 102,066,944 ============= =============
The accompanying notes are an integral part of these condensed consolidated financial statements. 4 VOLUNTEER BANCORP, INC. AND SUBSIDIARY Condensed Consolidated Statements of Earnings and Comprehensive Income For The Three and Six Months Ended June 30, 2000 and 1999 (Unaudited - See Accountants' Review Report) - --------------------------------------------------------------------------------
Three months ended Six months ended June 30, June 30, -------------------------- -------------------------- 2000 1999 2000 1999 ----------- ----------- ----------- ----------- Interest Income: Interest and fees on loans $ 1,760,987 $ 1,488,634 $ 3,412,495 $ 2,907,396 Interest on federal funds 37,490 36,203 62,590 76,378 Interest on investment securities: Taxable 363,688 392,191 736,093 752,175 Exempt from Federal income taxes 44,999 44,622 93,879 90,760 ----------- ----------- ----------- ----------- Total interest income 2,207,164 1,961,650 4,305,057 3,826,709 ----------- ----------- ----------- ----------- Interest Expense: Interest on deposits 1,149,082 982,387 2,208,207 1,948,505 Other borrowed funds 67,672 71,910 148,375 143,883 ----------- ----------- ----------- ----------- Total interest expense 1,216,754 1,054,297 2,356,582 2,092,388 ----------- ----------- ----------- ----------- Net interest income 990,410 907,353 1,948,475 1,734,321 Provision for possible loan losses 60,000 60,000 120,000 120,000 ----------- ----------- ----------- ----------- Net interest income after provision for possible loan losses 930,410 847,353 1,828,475 1,614,321 ----------- ----------- ----------- ----------- Non-interest income: Service charges on deposits 60,298 44,007 115,452 94,368 Other service charges and fees 38,910 32,363 57,179 54,818 Securities gains -- 12,123 -- 40,747 Other non-interest income 1,741 3,377 14,606 13,979 ----------- ----------- ----------- ----------- Total non-interest income 100,949 91,870 187,237 203,912 ----------- ----------- ----------- ----------- Non-interest expense: Salaries and employee benefits 395,216 347,195 814,349 701,985 Occupancy expense 65,381 62,164 122,176 115,146 Furniture and equipment expense 78,276 66,839 158,273 138,106 Other non-interest expense 197,657 171,799 391,712 364,239 ----------- ----------- ----------- ----------- Total non-interest expense 736,530 647,997 1,486,510 1,319,476 ----------- ----------- ----------- ----------- Earnings before income taxes 294,829 291,226 529,202 498,757 Income tax expense 100,056 98,719 176,123 165,234 ----------- ----------- ----------- ----------- Net income $ 194,773 $ 192,507 $ 353,079 $ 333,523 =========== =========== =========== =========== Other comprehensive income: Unrealized (loss) on securities available for sale, before tax $ (5,476) $ (709,102) $ (218,358) $(1,037,102) Reclassification for gains included in net income -- (12,123) -- (40,747) Income taxes related to other comprehensive income 2,081 264,852 82,976 378,615 ----------- ----------- ----------- ----------- (3,395) (432,127) (135,382) (617,740) ----------- ----------- ----------- ----------- Total comprehensive income (loss) $ 191,378 $ (239,620) $ 217,697 $ (284,217) =========== =========== =========== =========== Net income per common share $ 0.37 $ 0.36 $ 0.66 $ 0.62 =========== =========== =========== =========== Common shares outstanding 539,027 539,027 539,027 539,027 =========== =========== =========== ===========
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 Six Months Ended June 30, 2000 and 1999 (Unaudited - See Accountants' Review Report) - --------------------------------------------------------------------------------
2000 1999 ----------- ------------ Cash Flows from Operating Activities: Net income $ 353,079 $ 333,523 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes 4,101 56,996 Provision for possible loan losses 120,000 120,000 Provision for depreciation and amortization 123,625 123,661 FHLB stock dividends (11,000) (9,700) (Gain) on securities -- (40,747) (Increase) in interest receivable (56,897) (63,510) (Increase) in other assets (141,488) (161,298) Increase (decrease) in other liabilities 51,012 (389,154) ----------- ------------ Net cash provided (used) by operating activities 442,432 (30,229) ----------- ------------ Cash Flows from Investing Activities: Purchase of investment securities held to maturity -- -- Proceeds from calls and maturity of held to maturity securities 26,316 258,223 Purchase of investment securities available for sale -- (10,914,064) Proceeds from calls and maturity of securities available for sale 782,535 2,575,000 Proceeds from sale of securities available for sale -- 5,748,887 Net (increase) in loans (4,864,081) (4,355,040) Capital expenditures (191,639) (123) ----------- ------------ Net cash (used) in investing activities (4,246,869) (6,687,117) ----------- ------------ Cash Flows from Financing Activities: Net increase in demand deposits, NOW accounts, IRA and savings accounts 3,661,419 1,889,661 Net increase in certificates of deposit 1,077,028 3,088,419 Net (decrease) increase in securities sold under repurchase agreements (270,802) 229,943 Repayment of long-term borrowing (295,000) (255,000) Repayment of FHLB advances (4,500,000) -- Payment of dividends (64,683) (53,903) ----------- ------------ Net cash (used) provided by financing activities (392,038) 4,899,120 ----------- ------------ (Decrease) in cash and cash equivalents (4,196,475) (1,818,226) Cash and cash equivalents beginning of period 8,606,345 6,802,651 ----------- ------------ Cash and cash equivalents end of period $ 4,409,870 $ 4,984,425 =========== ============ Supplemental Disclosure of Cash Flow Information: Cash paid during the period for: Interest $ 2,266,296 $ 2,164,732 =========== ============ Income taxes $ 227,053 $ 330,145 =========== ============
The accompanying notes are an integral part of these condensed consolidated financial statements. 6 VOLUNTEER BANCORP, INC. AND SUBSIDIARY Notes to Unaudited Condensed Consolidated Financial Statements Six Months Ended June 30, 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 and SFAS No. 138, is generally 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 did not have any material impact upon financial position or results of operations. 7 VOLUNTEER BANCORP, INC. AND SUBSIDIARY Notes to Unaudited Condensed Consolidated Financial Statements Six Months Ended June 30, 2000 and 1999 - -------------------------------------------------------------------------------- 3. Long-term debt The Company's long-term debt consists of a single note payable in the amount of $2,790,000 and $2,495,000 at June 30, 1999 and 2000, 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 June 30, 2000 the rate on the note was 8.4525% 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. 8 VOLUNTEER BANCORP, INC. AND SUBSIDIARY FINANCIAL HIGHLIGHTS AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999 (UNAUDITED)
Three Months Ended Six Months Ended June 30, June 30, -------------------- --------------------- 2000 1999 2000 1999 -------- -------- --------- -------- Net income $ 194,773 $ 192,507 $ 353,079 $ 333,523 Per common share data: Net income per weighted average common share $ 0.37 $ 0.36 $ 0.66 $ 0.62 Book value $ 7.87 $ 7.54 $ 7.87 $ 7.54 Ratios: Return on average assets 0.72% 0.76% 0.66% 0.67% Return on average common equity 18.79% 18.41% 16.95% 15.76% Net interest margin (taxable equivalent basis) 4.00% 3.94% 4.03% 3.82% Expense ratio 2.71% 2.57% 2.77% 2.64% Allowance for loan losses / loans 1.33% 1.37% 1.33% 1.37% Non-performing loans / loans 1.30% 0.56% 1.30% 0.56% Non-performing assets / loans and foreclosed properties 1.96% 0.81% 1.96% 0.81% Shareholder's equity / total assets 3.92% 3.98% 3.92% 3.98% Leverage ratio (tangible capital / tangible average assets) 4.70% 4.34% 4.64% 4.38%
9 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999 OPERATING RESULTS The Company reported net income for the second quarter of $194,773, or $0.37 per common share, compared to income of $192,507, or $0.36 for the same period a year ago. Our returns on average assets and average common equity were 0.72% and 18.79%, respectively, for the quarter compared to 0.76% and 18.41% for the same period last year. Net interest income for the first six months of 2000 increased $214,154 versus the first six months of 1999 to $1,948,475. The increase is attributable to growth in interest earning assets of 5.25%. Average loans grew 13.35% over the second quarter of 1999. Total Company assets were $108,346,403 at June 30, 2000 compared to $102,066,944 as of June 30, 1999. The net interest margin (taxable equivalent basis) was 4.00% for the second quarter of 2000 compared to 3.94% for the second quarter of 1999. The yield on the investment portfolio was 5.90% for the second quarter of 2000 compared to 6.42% for the same quarter of 1999. The higher level of interest income from loans and securities was accompanied by an increase in the cost of interest-bearing deposits and securities sold under repurchase agreements. Non-interest income for the second quarter of 2000 increased $9,079 over the second quarter of 1999. The growth is attributable to service charges on deposit accounts and other fees. Non-interest expenses for the second quarter of 2000 increased $88,533 compared to the second quarter of 1999 primarily for costs (including salaries and employee compensation) associated with overall growth. ASSET QUALITY Non-performing assets at June 30, 2000 were $1,432,000 or 1.96% of loans and foreclosed properties, compared to $517,000, or 0.81% of loans and foreclosed properties at June 30, 1999. The provision for losses on loans was $60,000 for the second quarter of 2000 and 1999. At June 30, 2000, the allowance for losses on loans was 1.33% of loans and approximately 67% 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. 10 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 At the Annual Meeting on May 18, 2000, the shareholders voted on the following proposals with the results as indicated: 1. Elected its current directors to continue in office for a three-year term as follows: FOR WITHHOLD AUTHORITY H. Lyons Price 393,374 0 G. Douglas Price 393,374 0 Gary Varnell 393,374 0 Truett H. Pierce 393,374 0 George Brooks 393,374 0 2. Ratified the appointment of Welch & Associates as the Company's independent accountants and auditors for 2000 as follows: FOR AGAINST ABSTAIN 393,374 0 0 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 June 30, 2000. 11 11 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: August 8, 2000 /s/ Reed D. Matney --------------------------------------- Reed D. Matney, President (principal executive officer) Date: August 8, 2000 /s/ H. Lyons Price --------------------------------------- H. Lyons Price (principal financial and accounting officer) 12 EX-23.1 2 ex23-1.txt 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 July 20, 2000 included in this Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2000. Welch & Associates Nashville, Tennessee August 8, 2000 EX-27 3 ex27.txt FINANCIAL DATA SCHEDULE
9 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 3,434,870 0 975,000 0 24,701,248 1,071,313 994,634 72,441,110 964,601 108,346,403 99,562,494 1,050,288 995,668 2,495,000 0 0 5,390 4,237,563 108,346,403 3,412,495 829,972 62,590 4,305,057 2,208,207 2,356,582 1,948,475 120,000 0 1,486,510 529,202 353,079 0 0 353,079 0.66 0.66 8.69 500,000 440,000 0 0 842,328 28,557 30,830 964,601 964,601 0 0
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