<PAGE> 1
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 AND
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1999
-------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to __________
COMMISSION FILE NUMBER: 333-10909
Forsyth Bancshares, Inc.
-----------------------------------------
(Exact name of small business issuer as specified in its charter)
Georgia 58-2231953
- ------------------------------- --------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
501 TRI-COUNTY PLAZA, HIGHWAYS 9 AND 20, CUMMING, GEORGIA 30040
(Address of principal executive offices)
(770) 886-9500
(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
PROCEEDINGS 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 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 May 1, 1999: 800,000; no par value.
Transitional Small Business Disclosure Format (Check One) Yes No X
---
<PAGE> 2
FORSYTH BANCSHARES, INC. AND SUBSIDIARY
================================================================================
INDEX
<TABLE>
<CAPTION>
PAGE
PART I. FINANCIAL INFORMATION
<S> <C> <C>
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET - MARCH 31, 1999..................................................3
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME (LOSS) - THREE MONTHS ENDED MARCH 31, 1999 AND 1998...............................4
CONSOLIDATED STATEMENTS OF CASH FLOWS - THREE
MONTHS ENDED MARCH 31, 1999 AND 1998.....................................................5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS...................................................6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.....................................7
PART II. OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...................................15
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K......................................................15
SIGNATURES.....................................................................................16
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FORSYTH BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
MARCH 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
(Dollars in Thousands)
Assets
<S> <C>
Cash and due from banks ................................. $ 1,723
Federal funds sold ...................................... 4,500
Securities available-for-sale, at fair value ............ 22,490
Securities held-to-maturity, fair value of $1,586 ....... 1,576
Loans ................................................... 28,326
Less allowance for loan losses .......................... 364
--------
Loans, net .................................... 27,962
--------
Premises and equipment .................................. 976
Other assets ............................................ 871
--------
Total assets .................................. $ 60,098
========
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing demand .......................... $ 5,353
Interest-bearing demand ............................. 12,342
Savings ............................................. 591
Time ................................................ 33,551
--------
Total deposits ................................ 51,837
Other liabilities ....................................... 306
--------
Total liabilities ............................. 52,143
--------
Commitments and contingent liabilities
Stockholders' equity
Common stock, no par value .......................... 7,960
Retained earnings ................................... 92
Accumulated other comprehensive loss ................ (97)
--------
Total stockholders' equity .................... 7,955
--------
Total liabilities and stockholders' equity .... $ 60,098
========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE> 4
FORSYTH BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME (LOSS)
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
(Dollars in Thousands,
Except Per Share Data)
1999 1998
------- ------
Interest income
<S> <C> <C>
Loans $ 675 $ 519
Taxable securities 335 260
Nontaxable securities 12 -
Federal funds sold 69 22
------- -------
Total interest income 1,091 801
------- -------
Interest expense on deposits 564 392
------- -------
Net interest income 527 409
Provision for loan losses 2 51
------- -------
Net interest income after provision for loan losses 525 358
------- -------
Other income
Service charges on deposit accounts 24 18
Other operating income 10 6
------- -------
Total other income 34 24
------- -------
Other expenses
Salaries and other employee benefits 177 173
Occupancy and equipment expenses 67 63
Other operating expenses 134 95
------- -------
Total other expenses 378 331
------- -------
Income before income taxes 181 51
Income tax expense 63 -
------- -------
Net income 118 51
------- -------
Other comprehensive loss, net of tax
Unrealized losses on securities available-for-sale
arising during period (174) (19)
------- -------
Comprehensive income (loss) $ (56) $ 32
======= =======
Basic and diluted earnings per common share $ 0.15 $ 0.06
======= =======
Cash dividends per share of common stock $ - $ -
======= =======
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE> 5
FORSYTH BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
(Dollars in Thousands)
1999 1998
--------- --------
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 118 $ 51
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 29 18
Provision for loan losses 2 51
Other operating activities (138) (149)
------- -------
Net cash provided by (used in) operating activities 11 (29)
------- -------
INVESTING ACTIVITIES
Purchases of securities available-for-sale and
held-to-maturity (4,349) (2,202)
Proceeds from maturities of securities available-for-sale
and held-to-maturity 1,481 -
Net decrease in Federal funds sold 3,680 510
Net increase in loans (788) (4,037)
Purchase of premises and equipment (62) (41)
------- -------
Net cash used in investing activities (38) (5,770)
------- -------
FINANCING ACTIVITIES
Net increase in deposits 424 7,575
------- -------
Net cash provided by financing activities 424 7,575
------- -------
Net increase in cash and due from banks 397 1,776
Cash and due from banks at beginning of period 1,326 1,787
------- -------
Cash and due from banks at end of period $ 1,723 $ 3,563
======= =======
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE> 6
FORSYTH BANCSHARES, INC. AND SUBSIDIARY
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 period.
The results of operations for the three month period ended
March 31, 1999 are not necessarily indicative of the results
to be expected for the full year.
NOTE 2. CURRENT ACCOUNTING DEVELOPMENTS
In June 1998, the Financial Accounting Standards Board issued
SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities". This statement is required to be adopted
for fiscal years beginning after June 15, 1999. However, the
statement permits early adoption as of the beginning of any
fiscal quarter after its issuance. Forsyth Bancshares, Inc.
("the Company") expects to adopt this statement effective
January 1, 2000. SFAS No. 133 requires the Company to
recognize all derivatives as either assets or liabilities in
the balance sheet at fair value. For derivatives that are not
designated as hedges, the gain or loss must be recognized in
earnings in the period of change. For derivatives that are
designated as hedges, changes in the fair value of the hedged
assets, liabilities, or firm commitments must be recognized in
earnings or recognized in other comprehensive income until the
hedged item is recognized in earnings, depending on the nature
of the hedge. The ineffective portion of a derivative's change
in fair value must be recognized in earnings immediately.
Management has not yet determined what effect the adoption of
SFAS No. 133 will have on the Company's earnings or financial
position.
There are no other recent accounting pronouncements that have
had, or are expected to have, a material effect on the
Company's financial statements.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
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
subsidiary, The Citizens Bank of Forsyth County (the "Bank"),
during the periods included in the accompanying consolidated
financial statements.
SPECIAL CAUTIONARY NOTICE REGARDING FORWARD LOOKING
STATEMENTS
Certain of the statements made herein under the caption
"Management's Discussion and Analysis of Financial Condition
and Results of Operations" ("MD&A") are forward-looking
statements for purposes of the Securities Act of 1933, as
amended (the "Securities Act") and the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and as such may
involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of the Company to be materially different from
future results, performance or achievements expressed or
implied by such forward-looking statements. Such forward
looking statements include statements using the words such as
"may," "will," "anticipate," "should," "would," "believe,"
"contemplate," "expect," "estimate," "continue," "may,"
"intend," or other similar words and expressions of the
future. Our actual results may differ significantly from the
results we discuss in these forward-looking statements.
These forward-looking statements involve risks and
uncertainties and may not be realized due to a variety of
factors, including, without limitation: the effects of future
economic conditions; governmental monetary and fiscal
policies, as well as legislative and regulatory changes; the
risks of changes in interest rates on the level and
composition of deposits, loan demand, and the values of loan
collateral, securities, and other interest-sensitive assets
and liabilities; interest rate risks; the effects of
competition from other commercial banks, thrifts, mortgage
banking firms, consumer finance companies, credit unions,
securities brokerage firms, insurance companies, money market
and other mutual funds and other financial institutions
operating in the Company's market area and elsewhere,
including institutions operating regionally, nationally, and
internationally, together with such competitors offering
banking products and services by mail, telephone, computer,
and the Internet; the possible effects of the Year 2000 issues
on the Company.
Management's current assessment and estimates with respect to
the Company's Year 2000 compliance efforts and the impact of
Year 2000 issues on the Company's business and operations have
been included in the MD&A. Various factors could cause actual
plans and results to differ materially from those contemplated
by such assessments, estimates and forward-looking statements,
many of which are beyond the control of the Company. Some of
these factors include, but are not limited to, representations
by the Company's vendors and counterparties, technological
advances, economic considerations, and consumer perceptions.
The Company's Year 2000 compliance program is an ongoing
process involving continual evaluation and may be subject to
change in response to new developments.
7
<PAGE> 8
LIQUIDITY AND CAPITAL RESOURCES
Management considers the Company's liquidity to be adequate to meet operating
and loan funding requirements at March 31, 1999. At March 31, 1999, the
liquidity ratio (i.e. cash, short-term assets and marketable assets divided by
deposits and short term liabilities) for the Bank was approximately 58% and the
loan to deposit ratio was approximately 55%. As the portfolio grows, management
will continue to monitor the liquidity of the Bank and the Company and make
adjustments as deemed necessary. Investing the Bank's available funds in loans
and other high yielding interest securities will increase the Bank's earning
potential.
Requirements by banking regulators now include the monitoring of risk-based
capital guidelines for banks and holding companies that are designed to make
capital requirements more sensitive to differences in risk profiles and account
for off balance sheet items. The Bank and the Company exceed the regulatory
minimums on capital requirements and ratios. However, as the Company and the
Bank continue to grow and the loan portfolio increases, these ratios should
adjust downward. Management will monitor these amounts and ratios on a
continuous basis. The minimum capital requirements and the actual capital ratios
for the Company and the Bank are as follows:
<TABLE>
<CAPTION>
ACTUAL
--------------------------------
THE CITIZENS
FORSYTH BANK OF
BANCSHARES FORSYTH REGULATORY
INC. COUNTY REQUIREMENT
-------------- -------------- ---------------
<S> <C> <C> <C>
Leverage capital ratios 13.39 % 11.28 % 4.00 %
Risk-based capital ratios:
Tier I capital 23.19 19.68 4.00
Total capital 24.24 20.75 8.00
</TABLE>
FINANCIAL CONDITION
Following is a summary of the Company's balance sheets for the periods
indicated:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998 INCREASE (DECREASE)
------------- --------------- --------------------------------
AMOUNT PERCENT
------------ --------------
(DOLLARS IN THOUSANDS)
----------------------------------------------------
<S> <C> <C> <C> <C>
Cash and due from banks $ 1,723 $ 1,326 $ 397 29.94 %
Federal funds sold 4,500 8,180 (3,680) (44.99)
Securities 24,066 21,460 2,606 12.14
Loans 27,962 27,175 787 2.90
Premises and equipment 976 943 33 3.50
Other assets 871 673 198 29.42
------------- --------------- ------------
$ 60,098 $ 59,757 $ 341 0.57
============= =============== ============
Deposits $ 51,837 $ 51,412 $ 425 0.83 %
Other liabilities 306 334 (28) (8.38)
Stockholders' equity 7,955 8,011 (56) (0.70)
------------- --------------- ------------
$ 60,098 $ 59,757 $ 341 0.57
============= =============== ============
</TABLE>
8
<PAGE> 9
As indicated in the above table, the Company's total assets grew only slightly
at a rate of .57%. Deposit growth of $425,000 and a shift from Federal funds
sold funded new loans of $787,000 and an increase in securities of $2,606,000.
Stockholders' equity has decreased by $56,000 due to net income of $118,000
being offset by unrealized losses on securities available-for-sale, net of tax,
of $174,000. The most significant change in the securities portfolio was
longer-term U.S. agencies and corporations which decreased in value, net of tax,
by $121,000.
9
<PAGE> 10
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
Following is a summary of the Company's operations for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------------
1999 1998 INCREASE (DECREASE)
-------- ------ ---------------------
AMOUNT PERCENT
------ -------
(DOLLARS IN THOUSANDS)
----------------------------------------------
<S> <C> <C> <C> <C>
Interest income $1,091 $ 801 $ 290 36.20 %
Interest expense 564 392 172 43.88
------ ------ ------
Net interest income 527 409 118 28.85
Provision for loan losses 2 51 (49) (96.08)
Other income 34 24 10 41.67
Other expense 378 331 47 14.20
------ ------ ------
Pretax income 181 51 130 254.90
Income taxes 63 - 63 -
------ ------ ------
Net income 118 51 67 131.37
====== ====== ======
</TABLE>
As indicated in the above table, the Company's net interest income has increased
by $118,000 during the first quarter of 1999 as compared to the same period in
1998. The Company's net interest margin decreased to 3.68% during the first
quarter of 1999 as compared to 4.16% for the previous year. The increase in net
interest income is due primarily to the increased volume of average
interest-earning assets. The decrease in the net interest margin is due to an
increase of securities and Federal funds sold as components of average
interest-earning assets.
The provision for loan losses decreased by $49,000 during the first quarter of
1999 as compared to the same period in 1998. This decrease is due primarily to
slower loan growth and $2,000 in net recoveries. The Company's reserve for loan
losses amounted to 1.28% at March 31, 1999 as compared to 1.31% at December 31,
1998. The allowance for loan losses is maintained at a level that is considered
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 repay and the underlying collateral value.
10
<PAGE> 11
Information with respect to nonaccrual, past due and restructured loans at March
31, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
MARCH 31,
---------------------------------
1999 1998
--------------- ---------------
(DOLLARS IN THOUSANDS)
---------------------------------
<S> <C> <C>
Nonaccrual loans $ 27 $ -
Loans contractually past due ninety days or more as to interest
or principal payments and still accruing - -
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 1 -
Interest income that was recorded on nonaccrual and restructured loans - -
</TABLE>
It is the policy of the Bank 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.
11
<PAGE> 12
Information regarding certain loans and allowance for loan loss data through
March 31, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------------------
1999 1998
--------------- ---------------
(DOLLARS IN THOUSANDS)
---------------------------------
<S> <C> <C>
Average amount of loans outstanding $ 27,986 $ 20,845
=============== ===============
Balance of allowance for loan losses at beginning of period $ 360 $ 235
=============== ===============
Loans charged off
Commercial and financial $ - $ -
Real estate mortgage - -
Instalment - -
--------------- ---------------
- -
--------------- ---------------
Loans recovered
Commercial and financial - -
Real estate mortgage - -
Instalment 2 -
--------------- ---------------
2 -
--------------- ---------------
Net (charge-offs) recoveries 2 -
--------------- ---------------
Additions to allowance charged to operating expense during period 2 51
--------------- ---------------
Balance of allowance for loan losses at end of period $ 364 $ 286
=============== ===============
Ratio of net loans charged off during the period to
average loans outstanding -% -%
=============== ===============
</TABLE>
Other income has increased during the first quarter of 1999 as compared to the
same period in 1998 by $10,000 due to increased service charges of $6,000 and
other miscellaneous fees of $4,000.
Other expenses increased during the first quarter of 1999 as compared to the
same period in 1998 by $47,000 due primarily to increased other operating
expenses of $39,000. The increase in other operating expenses is primarily due
to increased data processing and professional fees.
The Company's provision for income taxes was $63,000 for the first quarter of
1999, or an effective tax rate of 35.04%. Because the Company had accumulated
deficits as of March 31, 1998, no income tax provision was recorded during the
first quarter of 1998.
12
<PAGE> 13
THE YEAR 2000 ISSUE
The Year 2000 issue is the result of potential problems with computer systems or
any equipment with computer chips that use dates that have been sorted as two
digits rather than four (e.g., "99" for 1999). On January 1, 2000, any clock or
date recording mechanism, including date sensitive software, which uses only two
digits to represent the year may recognize a date using "00" as the year 1900
rather than the year 2000. This could result in system failures or
miscalculations causing disruption of operations, including, among other things,
a temporary inability to process transactions, send invoices or perform similar
tasks.
For a bank, Year 2000 problems could have a material adverse effect if interest
accruals for loans and deposits are not calculated properly. A system crash
could result in a disruption of business which in turn could cause the bank to
lose a significant portion of its customer base, either of which could result in
material adverse consequences for the Company.
At the Company, preparation for Year 2000 challenges is a top priority. The
Company has chosen to address the Year 2000 problems by forming a project team
consisting of select personnel. The project manager is the chief financial
officer, who reports to the Executive Committee and Board. The project team has
been charged with the responsibility of assessing the problem, overseeing
corrective action, as well as testing the Year 2000 readiness of all equipment,
software, and applications after upgrades have been made. The Bank's senior
management continue to oversee the extensive Year 2000 project. The project is
well underway to minimize any disruption in service to customers and to preserve
customer confidence in us. The Company has committed the people and the
resources we believe are necessary to prepare for the millennium change. The
Company has progressed through the awareness, assessment and renovation phases
and is well into the validation phase where testing is conducted and results
analyzed to confirm the changes made to bring the affected system into
compliance and that no problems surface as a result.
The Company has distinguished between critical and non critical systems.
Mission-critical systems have priority attention. These systems are: core
processing system, both hardware and software, teller processing system and
items processing. Automated new accounts and loan document preparation software,
A(TM) processing, local area network and personal computers have been designated
as mission-necessary and have also been given appropriate attention. All
personal computers and the local area network have been tested and certified by
an outside firm to be Year 2000 compliant. The Company upgraded to a new core
processing system and an outside service provider which was installed on January
22, 1999. The validation of mission critical systems has been substantially
completed.
Since the Company relies on other outside vendors for many services such as
electricity, phone service, water, gas, bond accounting, accounts payable, and
other related forms, correspondence has been sent to each of these vendors
requesting information regarding their Year 2000 readiness. Correspondence with
vendors continues to be obtained and evaluated.
Due to the critical nature of the core processing system, the Company is in the
process of developing new contingency plans to accommodate new systems recently
installed and has adopted the contingency plan of the outside provider.
Contingency plans are also in revision to accommodate disruption of service due
to power outage, natural disasters and Year 2000 issues and are expected to be
in place by June 30, 1999.
13
<PAGE> 14
After the assessment phase, the Board of Directors approved a budget of $125,000
to address the Year 2000 issues, consisting mainly of new hardware and software
systems. This budget is subject to continuous review and amendment. Management
does not expect the cost of remediation to vary significantly from the present
budget. As of March 31, 1999, approximately $50,750 of costs had been incurred
by the Company with respect to Year 2000 issues.
It is the goal of the Company to make sure that customers are protected from any
Year 2000 problems and to provide customers with accurate and timely information
about the Year 2000 problem as well as its progress towards compliance. The
Company has provided numerous informational brochures and letters to its
customers. This will be a continued concentration throughout 1999.
Loan customers could also experience business interruptions which could affect
their ability to repay debts owed to the Company resulting in adverse bank
performance. Action has been taken by the Company's senior lending officer to
evaluate the current commercial relationships and is continuing with the
assessment of each new commercial relationship. Management and the Board of the
Company realize that due to many factors, consumers may withdraw extra amounts
of money which could result in a liquidity issue for the Company. The liquidity
policy of the Company is being revised to accommodate this issue. This will be
closely monitored throughout 1999, with extra emphasis placed during the fourth
quarter.
In addition to assessing the Company's information technology system and the
risks of customer credit relationships, the Company has also assessed its
electronic equipment, such as building security, environmental systems and other
devices which contain embedded electronic circuits. With regard to these
non-information technology systems, the Company anticipates substantial, if not
complete, Year 2000 compliance no later than June 30, 1999.
The Company presently believes that, with modifications to its computer systems
and conversions to new systems, the Year 2000 issue will not pose significant
operational problems for the Company or have a material adverse effect on future
operating results. However, absolute assurance cannot be given that: (1) the
modifications and conversions will remedy all deficiencies, (2) failure of any
of the Company's systems will not have a material impact on operations, or (3)
failure of any other companies' systems with whom the Company conducts business
will not have a material impact on operations.
The costs of the Year 2000 project and the date which the Company plans to
complete the Year 2000 modifications are based upon management's best estimates,
which were derived utilizing numerous assumptions of future events including the
continued availability of certain resources, third party modification plans and
other factors. There can be no guarantee that these estimates will be achieved
and actual results could differ materially from those plans. Specific factors
that might cause such material differences include, but are not limited to, the
availability and cost of personnel trained in this area, the ability to locate
and correct all relevant computer codes, and similar uncertainties.
The Company is not aware of any known trends, events or uncertainties, other
than the effect of events as described above, 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.
14
<PAGE> 15
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
27. Financial Data Schedule, (for SEC use only).
(b) Reports on Form 8-K.
None.
15
<PAGE> 16
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.
FORSYTH BANCSHARES, INC.
(Registrant)
DATE: May 13, 1999 BY: /s/ David H. Denton
------------------- --------------------------------------------
David H. Denton, President and C.E.O.
(Principal Executive Officer)
DATE: May 13, 1999 BY: /s/ Holly R. Hunt
------------------- --------------------------------------------
Holly R. Hunt, Vice President,
Secretary and Treasurer
(Principal Financial and Accounting Officer)
16
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,723
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 4,500
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 22,490
<INVESTMENTS-CARRYING> 1,576
<INVESTMENTS-MARKET> 1,586
<LOANS> 28,326
<ALLOWANCE> 364
<TOTAL-ASSETS> 60,098
<DEPOSITS> 51,837
<SHORT-TERM> 0
<LIABILITIES-OTHER> 306
<LONG-TERM> 0
0
0
<COMMON> 7,960
<OTHER-SE> (5)
<TOTAL-LIABILITIES-AND-EQUITY> 60,098
<INTEREST-LOAN> 675
<INTEREST-INVEST> 347
<INTEREST-OTHER> 69
<INTEREST-TOTAL> 1,091
<INTEREST-DEPOSIT> 564
<INTEREST-EXPENSE> 564
<INTEREST-INCOME-NET> 527
<LOAN-LOSSES> 2
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 378
<INCOME-PRETAX> 181
<INCOME-PRE-EXTRAORDINARY> 118
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 118
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0.15
<YIELD-ACTUAL> 3.68
<LOANS-NON> 27
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 360
<CHARGE-OFFS> 0
<RECOVERIES> 2
<ALLOWANCE-CLOSE> 364
<ALLOWANCE-DOMESTIC> 364
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
