|
|
|
|
|
|
|
|
|
|
|
|
|
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE) FORM 10-Q
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
----
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
------
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM _________TO_________
Commission File Number 33-76644
COMMUNITYCORP
(Exact name of registrant as specified in its charter)
South Carolina 57-1019001
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
1100 N. JEFFERIES BOULEVARD
WALTERBORO, SC 29488
(Address of principal executive
offices, including zip code)
(843) 549-2265
(Registrant's telephone number, including area code)
------------------------------------------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the date of this filing.
283,197 SHARES OF COMMON STOCK, $5 PAR VALUE
<PAGE>
COMMUNITYCORP
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page No.
- ------------------------------
<S> <C> <C>
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets - March 31, 2000 and
December 31, 1999............................................................................................. 3
Condensed Consolidated Statements of Income - Three months ended
March 31, 2000 and 1999....................................................................................... 4
Condensed Consolidated Statement of Shareholders' Equity and Comprehensive Income - Three
months ended March 31, 2000................................................................................... 5
Condensed Consolidated Statements of Cash Flows - Three months
ended March 31, 2000 and 1999................................................................................. 6
Notes to Condensed Consolidated Financial Statements.......................................................... 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...................................................................................... 8-11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K..................................................................................11-14
(a) Exhibits......................................................................................................11-14
(b) Reports on Form 8-K...........................................................................................11-14
</TABLE>
2
<PAGE>
COMMUNITYCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
------------------- -------------------
<S> <C> <C>
ASSETS:
Cash and cash equivalents:
Cash and due from banks $ 4,200,056 $ 5,723,770
Federal funds sold and securities purchased under agreements to resell 3,390,000 4,670,000
------------------- -------------------
7,590,056 10,393,770
Securities available-for-sale 19,299,134 18,759,768
Securities held-to-maturity (estimated market value of $4,972,141 and
$5,210,028 at March 31, 2000 and December 31, 1999, respectively) 5,133,378 5,327,129
------------------- -------------------
24,432,512 24,086,897
Loans receivable 62,704,883 59,663,015
Less allowance for loan losses (1,123,700) (1,086,980)
------------------- -------------------
Loans, net 61,581,183 58,576,035
Accrued interest receivable 931,212 1,004,529
Premises, furniture & equipment, net 1,740,024 1,776,320
Other assets 950,537 857,710
------------------- -------------------
Total assets $ 97,225,524 $ 96,695,261
=================== ===================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Deposits:
Non-interest bearing $ 9,569,900 $ 9,952,976
Interest bearing 77,988,310 76,982,395
------------------- -------------------
87,558,210 86,935,371
Short-term borrowings 260,000 290,000
Accrued interest payable 546,437 509,943
Other liabilities 289,524 155,208
------------------- -------------------
Total liabilities 88,654,171 87,890,522
------------------- -------------------
SHAREHOLDERS' EQUITY:
Preferred stock, $5 par value, 3,000,000 shares authorized and unissued - -
Common stock, $5 par value, 3,000,000 shares
authorized, 300,000 shares issued and outstanding 1,500,000 1,500,000
Capital surplus 1,731,708 1,731,708
Accumulated other comprehensive income (loss) (396,583) (295,119)
Retained earnings 6,450,339 6,186,081
Treasury stock (16,803 shares in 2000 and 7,999 shares in 1999) (714,111) (317,931)
------------------- -------------------
Total shareholders' equity 8,571,353 8,804,739
------------------- -------------------
Total liabilities and shareholders' equity $ 97,225,524 $ 96,695,261
=================== ===================
</TABLE>
See notes to condensed consolidated financial statements
3
<PAGE>
COMMUNITYCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------------------
2000 1999
------------------ ------------------
<S> <C> <C>
Interest income:
Loans, including fees $ 1,410,661 $ 1,239,225
Securities 358,276 220,566
Other interest income 66,641 178,710
------------------ ------------------
Total 1,835,578 1,638,501
------------------ ------------------
Interest expense:
Deposit accounts 822,698 779,724
Other interest expense 2,919 4,866
------------------ ------------------
825,617 784,590
------------------ ------------------
Net interest income 1,009,961 853,911
Provision for loan losses 75,000 95,000
------------------ ------------------
Net interest income after
provision for loan losses 934,961 758,911
------------------ ------------------
Other operating income:
Service charges 100,533 92,372
Other income 24,057 24,523
------------------ ------------------
Total 124,590 116,895
------------------ ------------------
Other operating expenses:
Salaries and benefits 222,123 210,794
Net occupancy expense 36,451 26,976
Equipment expense 60,309 57,701
Other operating expenses 147,765 129,795
------------------ ------------------
Total 466,648 425,266
------------------ ------------------
Income before taxes 592,903 450,540
Income tax provision 186,683 148,058
------------------ ------------------
Net income $ 406,220 $ 302,482
================== ==================
Earnings per share:
Weighted average common shares outstanding 284,261 298,457
Net income per common share $ 1.48 $ 1.01
</TABLE>
See notes to condensed consolidated financial statements
4
<PAGE>
COMMUNITYCORP
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
Accumulated
Common Stock Other Total
-------------------------- Capital Comprehensive Retained Treasury Shareholders'
Shares Amount Surplus Income Earnings Stock Equity
------------ ------------ ------------ ------------ -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1999 300,000 $ 1,500,000 $ 1,731,708 $ (295,119) $ 6,186,081 $(317,931) $ 8,804,739
Cash dividends declared
- $.50 per share (141,962) (141,962)
Net income
for the period 406,220 406,220
Other comprehensive
income, net of taxes (101,464) (101,464)
----------
Comprehensive Income 304,756
----------
Purchase of
Treasury Stock (396,180) (396,180)
------------ ------------ ------------ ------------ -------------- ------------ ------------
Balance,
March 31, 2000 300,000 $ 1,500,000 $ 1,731,708 $ (396,583) $ 6,450,339 $(714,111) $ 8,571,353
============ ============ ============ ============ ============ ============ ============
</TABLE>
See notes to condensed consolidated financial statements
5
<PAGE>
COMMUNITYCORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------------------
2000 1999
------------------ ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 406,220 $ 302,482
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 45,107 46,208
Provision for possible loan losses 75,000 95,000
Amortization less accretion on investments 4,654 (3,088)
Amortization of deferred loan costs 13,760 19,142
Gain on sale of premises and equipment - (18,500)
(Increase) decrease in interest receivable 73,317 (1,304)
Increase (decrease) in interest payable 36,494 5,070
(Increase) decrease in other assets (39,384) 7,700
Increase (decrease) in other liabilities 134,316 181,823
------------------ ------------------
Net cash provided by operating activities 749,484 634,533
------------------ ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase in loans to customers (3,093,908) (1,836,225)
Purchases of securities available-for-sale (800,000) (2,705,750)
Maturities of securities available-for-sale 103,375 750,361
Purchases of securities held-to-maturity - (725,000)
Maturities of securities held-to-maturity 191,449 626,332
Proceeds from disposal of premises and equipment - 18,500
Purchases of premises and equipment (8,811) (31,592)
------------------ ------------------
Net cash used by investing activities (3,607,895) (3,903,374)
------------------ ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits accounts 622,839 1,357,371
Increase (decrease) in short-term borrowings (30,000) 100,000
Dividends paid (141,962) (119,383)
Purchase of treasury stock (396,180) -
------------------ ------------------
Net cash provided by financing activities 54,697 1,337,988
------------------ ------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (2,803,714) (1,930,853)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 10,393,770 19,474,460
------------------ ------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 7,590,056 $ 17,543,607
================== ==================
Cash paid during the period for:
Income taxes $ 28,205 $ 13,030
Interest $ 789,123 $ 779,520
</TABLE>
See notes to condensed consolidated financial statements
6
<PAGE>
COMMUNITYCORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared in
accordance with the requirements for interim financial statements and,
accordingly, they are condensed and omit disclosures which would substantially
duplicate those contained in the most recent annual report to shareholders. The
financial statements as of March 31, 2000 and for the interim periods ended
March 31, 2000 and 1999 are unaudited and, in the opinion of management, include
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation. The financial information as of December 31, 1999 has
been derived from the audited financial statements as of that date. For further
information, refer to the financial statements and the notes included in
Communitycorp's 1999 Annual Report.
NOTE 2 - COMPREHENSIVE INCOME
The components of other comprehensive income and related tax effects are as
follows:
<TABLE>
<CAPTION>
Quarter Ended March 31,
----------------------------------------
2000 1999
------------------ ------------------
<S> <C> <C>
Unrealized holding gains (losses) on
available-for-sale securities $ (154,907) $ (95,865)
Reclassification adjustment for losses
(gains) in realized income - -
------------------ ------------------
Net unrealized gains (losses) (154,907) (95,865)
Tax effect 53,443 32,625
------------------ ------------------
Net-of-tax amount $ (101,464) $ (63,240)
================== ==================
</TABLE>
Accumulated other comprehensive income consists solely of the unrealized gain on
securities available for sale, net of the deferred tax effects.
7
<PAGE>
COMMUNITYCORP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
The following is a discussion of the Company's financial condition as of March
31, 2000 compared to December 31, 1999, and the results of operations for the
three months ended March 31, 2000 compared to the three months ended March 31,
1999. These comments should be read in conjunction with the Company's condensed
consolidated financial statements and accompanying footnotes appearing in this
report.
RESULTS OF OPERATIONS
NET INTEREST INCOME
For the three months ended March 31, 2000, net interest income increased
$156,050 or 18.27% over the same period in 1999. The net interest margin
realized on earning assets increased slightly from 4.04% for the three months
ended March 31, 1999 to 4.51% for the same period in 2000. The interest rate
spread increased from 3.45% at March 31, 1999 to 3.92% at March 31, 2000.
PROVISION AND ALLOWANCE FOR LOAN LOSSES
The provision for loan losses is the charge to operating earnings that
management feels is necessary to maintain the allowance for possible loan losses
at an adequate level. For the three months ended March 31, 2000, the provision
charged to expense was $75,000. This was $20,000 less than for the comparable
period in 1999. Based on present information, management believes the allowance
for loan losses is adequate at March 31, 2000 to meet presently known and
inherent risks in the loan portfolio. The allowance for loan losses is 1.79% of
total loans at March 31, 2000, as compared to 1.76% at March 31, 1999.
NON-INTEREST INCOME
Non-interest income during the three months ended March 31, 2000 was $124,590,
an increase of $7,695 or 6.58% from the comparable period in 1999. The increase
is primarily a result of an increase in service charges from $92,372 at March
31, 1999 to $100,533 at March 31, 2000. Overdraft and NSF fees increased by
$8,105 to $70,049 at March 31, 2000. This change is a result of the increase in
deposit accounts over the two periods. Deposits at March 31, 2000 were
$87,558,210 compared to $81,706,140 at March 31, 1999.
NON-INTEREST EXPENSE
Total non-interest expense for the three months ended March 31, 2000 was $41,382
or 9.73% higher than the three months ended March 31, 1999. Salaries and
employee benefits increased from $210,794 at March 31, 1999 to $222,123 for the
three months ended March 31, 2000. This increase is primarily attributable to
annual pay raises. Other operating expenses increased $17,970 or 13.84% to
$147,765 for the three months ended March 31, 2000 when compared to the same
period in 1999.
INCOME TAXES
The income tax provision for the three months ended March 31, 2000 was $186,683
as compared to $148,058 for the same period in 1999. This increase was primarily
a result of an increase in income before taxes. The effective tax rates were
31.49% and 32.86% at March 31, 2000 and 1999, respectively.
8
<PAGE>
COMMUNITYCORP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
NET INCOME
The combination of the above factors resulted in net income for the three months
ended March 31, 2000 of $406,220 as compared to $302,482 for the same period in
1999. This represents an increase of $103,738 or 34.30% from the same period in
1999.
ASSETS AND LIABILITIES
During the first three months of 2000, total assets increased $530,263 or 0.55%
when compared to December 31, 1999. The primary source of growth in assets was
the increase of $3,041,868 or 5.10% in loans receivable. Deposits increased
$622,839 or 0.72% to $87,558,210 as of March 31, 2000. This increase in deposits
was not sufficient to fund the growth of the loan portfolio during the first
quarter of 2000. To fund this growth, the Bank reduced its cash and cash
equivalents by $2,803,714 or 26.97%.
LOANS
The demand for loans continued to increase in the Walterboro marketplace during
the first three months of 2000. Net loans increased $3,005,148 or 5.13% during
the period. Balances within the major loans receivable categories as of March
31, 2000 and December 31, 1999 are as follows:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
-------------------- --------------------
<S> <C> <C>
Commercial and industrial $ 42,064,185 $ 40,503,621
Real estate 7,280,123 6,948,643
Consumer 12,849,127 10,946,282
Agricultural 181,495 152,013
Other, net 329,953 1,112,456
-------------------- --------------------
$ 62,704,883 $ 59,663,015
==================== ====================
</TABLE>
RISK ELEMENTS IN THE LOAN PORTFOLIO
The following is a summary of risk elements in the loan portfolio:
<TABLE>
<CAPTION>
March 31,
---------------------------------------------
Loans: 2000 1999
-------------------- --------------------
<S> <C> <C>
Nonaccrual loans $ 1,020,349 $ 889,859
Accruing loans more than 90 days past due $ - $ 3,000
Loans identified by the internal review mechanism:
Criticized $ 175,431 $ 177,748
Classified $ 787,735 $ 740,184
</TABLE>
Activity in the Allowance for Loan Losses is as follows:
<TABLE>
<CAPTION>
March 31,
--------------------------------------------
2000 1999
-------------------- --------------------
<S> <C> <C>
Balance, January 1, $ 1,086,980 $ 929,482
Provision for loan losses for the period 75,000 95,000
Net loans (charged off) recovered for the period (38,280) (82,133)
-------------------- --------------------
Balance, end of period $ 1,123,700 $ 942,349
==================== ====================
Gross loans outstanding, end of period $ 62,704,883 $ 53,614,604
Allowance for Loan Losses to loans outstanding 1.79% 1.76%
</TABLE>
9
<PAGE>
COMMUNITYCORP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
DEPOSITS
Total deposits increased $622,839 or .72% from December 31, 1999. Expressed in
percentages, non-interest bearing deposits decreased 3.85% and interest bearing
deposits increased 1.31%.
Balances within the major deposit categories as of March 31, 2000 and December
31, 1999 are as follows:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
-------------------- --------------------
<S> <C> <C>
Non-interest bearing demand deposits $ 9,569,900 $ 9,952,976
Interest bearing demand deposits 15,048,978 16,234,134
Savings deposits 20,908,065 19,238,515
Certificates of deposit 42,031,267 41,509,746
-------------------- --------------------
$ 87,558,210 $ 86,935,371
==================== ====================
</TABLE>
LIQUIDITY
Liquidity needs are met by the Company through scheduled maturities of loans and
investments on the asset side and through pricing policies on the liability side
for interest-bearing deposit accounts. The level of liquidity is measured by the
loan-to-total funds ratio which was at 71.40% at March 31, 2000 and 68.40% at
December 31, 1999.
Securities available-for-sale which totaled $19,299,134 at March 31, 2000, serve
as a ready source of liquidity. The Company also has lines of credit available
with correspondent banks to purchase federal funds for periods from one to seven
days. At March 31, 2000, unused lines of credit totaled $2,500,000.
CAPITAL RESOURCES
Total shareholders' equity decreased $233,386 to $8,571,353 at March 31, 2000.
The decrease is primarily attributable to negative charges to equity which
included $396,180 for the purchase of treasury stock and $141,962 for dividends
paid. These negative charges offset earnings for the period which totaled
$406,220. A decline of $101,464 in the fair value of securities
available-for-sale also contributed to the decrease in shareholders' equity.
Bank holding companies, such as the Company, and their banking subsidiaries are
required by banking regulators to meet certain minimum levels of capital
adequacy which are expressed in the form of certain ratios. Capital is separated
into Tier 1 capital (essentially common shareholders' equity less intangible
assets) and Tier 2 capital (essentially the allowance for loan losses limited to
1.25% of risk-weighted assets). The first two ratios, which are based on the
degree of credit risk in the Company's assets, provide the weighting of assets
based on assigned risk factors and include off-balance sheet items such as loan
commitments and stand-by letters of credit. The ratio of Tier 1 capital to
risk-weighted assets must be at least 4.0% and the ratio of total capital (Tier
1 capital plus Tier 2 capital) to risk-weighted assets must be at least 8.0%.
The capital leverage ratio supplements the risk-based capital guidelines. Banks
and bank holding companies are required to maintain a minimum ratio of Tier 1
capital to adjusted quarterly average total assets of 3.0%.
10
<PAGE>
COMMUNITYCORP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
CAPITAL RESOURCES -- continued
The following table summarizes the Company's risk-based capital at March 31,
2000:
<TABLE>
<CAPTION>
<S> <C>
Shareholders' equity $ 8,967,936
Less: intangibles 5,096
--------------------
Tier I capital 8,973,032
Plus: allowance for loan losses (1) 864,826
--------------------
Total capital $ 9,837,858
====================
Risk-weighted assets $ 69,186,103
====================
Risk based capital ratios
Tier 1 12.96%
Total capital 14.21%
Leverage ratio 9.24%
</TABLE>
(1) limited to 1.25% of risk-weighted assets
REGULATORY MATTERS
The management of the Company is not aware of any current recommendations by
regulatory authorities which, if they were to be implemented, would have a
material effect on liquidity, capital resources, or operations.
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 were filed during the
quarter ended March 31, 2000.
Items 1, 2, 3, 4 and 5 are not applicable.
11
<PAGE>
PART II - OTHER INFORMATION
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMMUNITYCORP
By: /s/ W. Roger Crook
-----------------------------------
W. Roger Crook
President & Chief Executive Officer
Date: May 14, 2000 By: /s/ Gwen P. Bunton
-----------------------------------
Gwen P. Bunton
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-1-2000
<PERIOD-END> MAR-31-2000
<PERIOD-TYPE> 3-MOS
<CASH> 4,200,056
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 3,390,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 19,299,134
<INVESTMENTS-CARRYING> 5,133,378
<INVESTMENTS-MARKET> 4,972,141
<LOANS> 62,704,883
<ALLOWANCE> 1,123,700
<TOTAL-ASSETS> 97,225,524
<DEPOSITS> 87,558,210
<SHORT-TERM> 260,000
<LIABILITIES-OTHER> 835,961
<LONG-TERM> 0
0
0
<COMMON> 1,500,000
<OTHER-SE> 7,071,353
<TOTAL-LIABILITIES-AND-EQUITY> 97,225,524
<INTEREST-LOAN> 1,410,661
<INTEREST-INVEST> 358,276
<INTEREST-OTHER> 66,641
<INTEREST-TOTAL> 1,835,578
<INTEREST-DEPOSIT> 822,698
<INTEREST-EXPENSE> 2,919
<INTEREST-INCOME-NET> 1,009,961
<LOAN-LOSSES> 75,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 466,648
<INCOME-PRETAX> 592,903
<INCOME-PRE-EXTRAORDINARY> 592,903
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 406,220
<EPS-BASIC> 1.48
<EPS-DILUTED> 1.48
<YIELD-ACTUAL> 4.51
<LOANS-NON> 1,020,349
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 963,166
<ALLOWANCE-OPEN> 1,086,980
<CHARGE-OFFS> 40,240
<RECOVERIES> 1,960
<ALLOWANCE-CLOSE> 1,123,700
<ALLOWANCE-DOMESTIC> 1,123,700
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
|
|