-----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, OPccEgoI4FvCudwnN2Oq1rHLGaxZIUn3AO/6XHP+ozExOtHWpVAl1cWqWNDRrJgA fBkqnlMiJEwXl2REU70TiA== 0001005794-01-500020.txt : 20010511 0001005794-01-500020.hdr.sgml : 20010511 ACCESSION NUMBER: 0001005794-01-500020 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010510 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: 1627689 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 vbi10qsb.txt 1ST QUARTER 10Q 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, 2001 [ ] 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, 2001. Transitional Small Business Disclosure Format (check one); Yes [ ] No [X] PART I -- FINANCIAL INFORMATION 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, 2001 and 2000, 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 17, 2001 VOLUNTEER BANCORP, INC. AND SUBSIDIARY Condensed Consolidated Balance Sheets March 31, 2001 and 2000 (Unaudited- See Accountants' Review Report) - --------------------------------------------------------------------------------
ASSETS 2001 2000 ------ ---- ---- Cash and due from banks $ 3,520,499 $ 3,195,860 Federal fund sold 4,837,700 3,077,302 ------------------ ------------------- Total cash and cash equivalents 8,358,199 6,273,162 Investment securities available for sale (amortized cost of $29,288,264and $26,595,593, respectively) 29,351,082 25,028,065 Investment securities held to maturity (estimated market value of $1,756,688 and $1,028,745) 1,754,204 1,094,976 Loans, less allowances for loan losses of $994,565 and $911,399, respectively 73,473,694 69,407,705 Accrued interest receivable 1,095,352 988,824 Premises and equipment, net 4,004,126 4,037,336 Deferred income taxes 115,974 684,654 Other real estate 905,382 253,323 Goodwill 144,671 162,554 Other assets 220,992 326,522 ------------------ ------------------- Total assets $ 119,423,676 $ 108,257,121 ================== =================== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Deposits: Non-interest bearing $ 11,701,570 $ 11,110,788 Interest bearing 97,681,441 88,315,879 ------------------ ------------------- Total deposits 109,383,011 99,426,667 Note payable 2,170,000 2,495,000 Interest payable 900,070 720,564 Securities sold under repurchase agreements 996,354 1,335,304 Other accrued taxes, expenses and liabilities 263,348 228,011 ------------------ ------------------- Total liabilities 113,712,783 104,205,546 ------------------ ------------------- 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 3,750,056 3,101,552 Accumulated other comprehensive income 38,947 (971,867) ------------------ ------------------- Total stockholders' equity 5,710,893 4,051,575 ------------------ ------------------- Total liabilities and stockholders' equity $ 119,423,676 $ 108,257,121 ================== ===================
The accompanying notes are an integral part of these condensed consolidated financial statements. VOLUNTEER BANCORP, INC. AND SUBSIDIARY Condensed Consolidated Statements of Earnings For The Three Months Ended March 31, 2001 and 2000 (Unaudited - See Accountants' Review Report) - --------------------------------------------------------------------------------
2001 2000 ---- ---- Interest Income: Interest and fees on loans $1,855,561 $1,651,508 Interest on federal funds 100,813 25,100 Interest on investment securities: Taxable 406,959 372,405 Exempt from Federal income taxes 30,358 48,880 ------------------ ------------------- Total interest income 2,393,691 2,097,893 ------------------ ------------------- Interest Expense: Interest on deposits 1,312,973 1,059,125 Other borrowed funds 58,742 80,703 ------------------ ------------------- Total interest expense 1,371,715 1,139,828 ------------------ ------------------- Net interest income 1,021,976 958,065 Provision for possible loan losses 75,000 60,000 ------------------ ------------------- Net interest income after provision for possible loan losses 946,976 898,065 ------------------ ------------------- Non-interest income: Service charges on deposits 51,936 55,154 Other service charges and fees 14,293 18,269 Securities gains 7,927 - Other non-interest income 17,983 12,865 ------------------ ------------------- Total non-interest income 92,139 86,288 ------------------ ------------------- Non-interest expense: Salaries and employee benefits 447,273 419,133 Occupancy expense 70,202 56,795 Furniture and equipment expense 81,585 79,997 Other non-interest expense 203,624 194,055 ------------------ ------------------- Total non-interest expense 802,684 749,980 ------------------ ------------------- Income before income taxes 236,431 234,373 Income tax expense 84,234 76,067 ------------------ ------------------- Net income $152,197 $158,306 ================== =================== Income per common share $ 0.28 $ 0.29 ================== =================== Common shares outstanding 539,027 539,027 ================== ===================
The accompanying notes are an integral part of these condensed consolidated financial statements. VOLUNTEER BANCORP, INC. AND SUBSIDIARY Condensed Consolidated Statements of Cash Flows For The Three Months Ended March 31, 2001 and 2000 (Unaudited - See Accountants' Review Report) - --------------------------------------------------------------------------------
2001 2000 ---- ---- Cash Flows from Operating Activities: Net income $152,197 $158,306 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes 12,915 4,101 Provision for possible loan losses 75,000 60,000 Provision for depreciation and amortization 60,707 61,986 FHLB stock dividends (5,900) (5,300) (Gain) on securities (7,927) - Decrease in interest receivable 117,967 39,536 (Increase) other assets (363,850) (115,151) (Decrease) increase in other liabilities (100,641) 3,919 -------------------- -------------------- Net cash provided by operating activities (59,532) 207,397 -------------------- -------------------- Cash Flows from Investing Activities: Proceeds from calls and maturity of held to maturity securities 17,485 2,653 Purchase of investment securities held to maturity (705,141) - Purchase of investment securities available for sale (11,165,713) - Proceeds from calls and maturity of investments available for sale 2,200,000 455,494 Proceeds from sale of investments available for sale 5,557,623 - Net (increase) in loans (509,774) (2,735,277) Capital expenditures (8,318) (20,601) -------------------- -------------------- Net cash (used) in investing activities (4,613,838) (2,297,731) -------------------- -------------------- Cash Flows from Financing Activities: Net increase in demand deposits, NOW accounts, IRA and savings accounts 2,962,335 3,596,620 Net increase in certificates of deposit 412,990 1,006,000 Repayment of long-term debt (325,000) (295,000) Net (decrease) increase in securities sold under repurchase agreements (56,159) 14,214 Repayment of short-term FHLB advances - (4,500,000) Dividends paid (75,464) (64,683) -------------------- -------------------- Net cash provided (used) by financing activities 2,918,702 (242,849) -------------------- -------------------- (Decrease) in cash and cash equivalents (1,754,668) (2,333,183) Cash and cash equivalents beginning of period 10,112,867 8,606,345 -------------------- -------------------- Cash and cash equivalents end of period $8,358,199 6,273,162 ==================== ==================== Supplemental Disclosure of Cash Flow Information: Cash paid during the period for: Interest $1,611,678 $1,270,658 ==================== ==================== Income taxes $73,254 $40,553 ==================== ====================
The accompanying notes are an integral part of these condensed consolidated financial statements. VOLUNTEER BANCORP, INC. AND SUBSIDIARY Condensed Consolidated Statements of Comprehensive Income For The Three Months Ended March 31, 2001 and 2000 (Unaudited - See Accountants' Review Report) - --------------------------------------------------------------------------------
2001 2000 ---- ---- Net income $ 152,197 $ 158,306 ------------------- ------------------- Other comprehensive income, before tax: Unrealized gain (loss) on securities available for sale: Unrealized holding gains (losses) arising during the period 514,423 (212,882) Less: reclassification adjustment for (gains) included in net income (7,927) - ------------------- ------------------- Other comprehensive income 506,496 (212,882) Income taxes related to other comprehensive income 192,469 (80,895) ------------------- ------------------- 314,027 (131,987) ------------------- ------------------- Total comprehensive income $ 466,224 $ 26,319 =================== ===================
The accompanying notes are an integral part of these condensed consolidated financial statements. VOLUNTEER BANCORP, INC. AND SUBSIDIARY Notes to Unaudited Condensed Consolidated Financial Statements Three Months Ended March, 2001 and 2000 - -------------------------------------------------------------------------------- 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) --------------------------------------------------------------------------- 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 did not have any material impact upon financial position or results of operations. SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities", is effective for transfers and servicing of financial assets and extinguishment of liabilities occurring after March 31, 2001. This Statement is effective for recognition and reclassification of collateral and for disclosures relating to securitization transactions and collateral for fiscal years ending after December 15, 2000. This statement replaces SFAS No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguisments of Liabilities". It revises the standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain disclosures, but it carries over most of SFAS No. 125's provisions without reconsideration. This Statement provides accounting and reporting standards for transfers and servicing of financial assets and extinguishment of liabilities. Those standards are based on consistent application of a financial-components approach that focuses on control. Under the approach, after a transfer of financial assets, an entity recognizes the financial and servicing assets it controls and the liabilities it has incurred, derecognizes financial assets when control has been surrendered, and derecognizes liabilities when extinguished. This Statement provides consistent standards for distinguishing transfers of financial assets that are sales from transfers that are secured borrowings. The adoption of the provisions of this Statement relating to the recognition and reclassification of collateral and for disclosures relating to securitization transactions and collateral did not have any material impact upon financial position or results of operation. Adoption of the remaining provisions relating to the transfer and servicing of financial assets and extinguishment of liabilities is not expected to have any material impact upon financial position or results of operations. 3. Long-term debt -------------- The Company's long-term debt consists of a single note payable in the amount of $2,170,000 and $2,495,000 at March 31. 2001 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 March 31. 2001 the rate on the note was 7.34% per annum. Principal is payable annually on January 31, as follows: January 31, Principal Due ----------- ------------- 2002 360,000 2003 395,000 2004 435,000 2005 470,000 2006 (Final Maturity) 510,000 ------------- $ 2,170,000 ============= 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.
VOLUNTEER BANCORP, INC. AND SUBSIDIARY FINANCIAL HIGHLIGHTS As of And For The Three Months Ended March 31, 2001 and 2000 (Unaudited) 2001 2000 ---- ---- Net earnings $ 152,197 $ 158,306 Per common share data: Net earnings per common share $0.28 $0.29 Book value $10.59 $7.52 Ratios: Return on average assets 0.51% 0.60% Return on average common equity 11.04% 15.53% Net interest margin (taxable equivalent basis) 3.77% 4.06% Expense ratio 2.71% 2.84% Allowance for loan losses / loans 1.34% 1.30% Non-performing loans / loans 0.65% 1.26% Non-performing assets / loans and foreclosed properties 1.84% 1.61% Shareholders' equity / total assets 4.78% 3.74% Leverage ratio (tangible capital / tangible assets) 4.65% 4.56%
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, 2001 and 2000 ---------------------------------------------------------------- Operating Results ----------------- The Company reported net income for the first quarter of $152,197, or $0.28 per common share, compared to net income of $158,306, or $0.29 for the same period a year ago. Our returns on average assets and average common equity were 0.51% and 11.04%, respectively, for the quarter compared to 0.60% and 15.53% for the same period last year. Net interest income for the first three months of 2001 increased $63,911 versus the first three months of 2000 to $1,021,976. The increase is attributable to growth in interest earning assets of 10.96%. Average loans grew 7.90% over the first quarter of 2000. Total Company assets were $119,423,676 at March 31, 2001 compared to $108,257,121 as of March 31, 2000. The net interest margin was 3.77% for the first quarter of 2001 compared to 4.06% for the first quarter of 2000. The taxable equivalent yield on the investment portfolio was 6.36% for the first quarter of 2001 compared to 6.77% for the same quarter of 2000. The higher level of interest income from loans and securities was offset by an increase in the cost of interest-bearing deposits. The cost of securities sold under repurchase agreements, Federal Home Loan Bank advances, and note payable decreased by $21,961. Non-interest income for the first quarter of 2001 increased $5,851 over the first quarter of 2000. The increase is primarily attributable to an increase in gains on securities transactions. Non-interest expenses for the first quarter of 2001 increased $52,704 compared to the first quarter of 2000 primarily for costs (including salaries and employee compensation) associated with overall growth. Asset Quality ------------- Non-performing assets at March 31, 2001 were $1,139,000 or 1.84% of loans and foreclosed properties, which is an increase from $1,138,000, or 1.61% of loans and foreclosed properties at March 31, 2000. The provision for losses on loans was $75,000 for the first quarter of 2001 and $60,000 for the first quarter of 2000. At March 31, 2001, the allowance for losses on loans was 1.34% of loans and approximately 72% of non-performing assets. The increase in non-performing assets is primarily attributable to real estate loans in which no loss is anticipated. 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 (b) There have been no Current Reports on Form 8-K filed during the quarter ended March 31, 2001. 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 2, 2001 /s/ Reed D. Matney -------------------------- Reed D. Matney, President (principal executive officer) Date: May 2, 2001 /s/ H. Lyons Price -------------------------- H. Lyons Price (principal financial and accounting officer) EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the use of our report dated April 17, 2001 included in this Quarterly Report on Form 10-QSB for the Quarter Ended March 31, 2001. Welch & Associates Nashville, Tennessee April 17, 2001 -----END PRIVACY-ENHANCED MESSAGE-----