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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT
For the transition period from to
Commission File Number 0-22535
Sistersville Bancorp, Inc.
(Exact name of registrant as specified in its charter)
DELAWARE 31-1516424
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
726 Wells Street, Sistersville, WV 26175
(Address of principal executive offices)
(304) 652-3671
(Registrant's telephone number, including area code)
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 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
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date:
Class: Common Stock, par value $.10 per share
Outstanding at August 2, 1999: 567,093 shares
Transitional small business disclosure format (check one). Yes No X
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SISTERSVILLE BANCORP, INC.
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet (Unaudited) as of
June 30, 1999 and March 31, 1999 3
Consolidated Statement of Income (Unaudited)
for the Three Months ended June 30, 1999 and 1998 4
Consolidated Statement of Comprehensive Income (Unaudited)
for the Three Months ended June 30, 1999 and 1998 5
Consolidated Statement of Cash Flows (Unaudited)
for the Three Months ended June 30, 1999 and 1998 6
Notes to Unaudited Consolidated Financial Statements 7 - 8
Item 2. Management's Discussion and Analysis 8 - 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Default Upon Senior Securities 12
Item 4. Submissions of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES
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3
SISTERSVILLE BANCORP, INC.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
June 30, March 31,
1999 1999
----------- -----------
ASSETS
Cash and Cash Equivalents:
Cash and amounts due from banks $ 170,853 $ 29,823
Interest-bearing deposits with other institutions 1,450,268 1,843,976
----------- -----------
1,621,121 1,873,799
Investment Securities:
Securities held to maturity (fair value of
$303,630 and $356,980) 297,266 350,815
Securities available for sale 4,905,848 4,908,390
----------- -----------
Total investment securities 5,203,114 5,259,205
Loans receivable, (net of allowance for loan losses
of $171,500 and $172,250) 24,559,826 24,319,941
Office properties and equipment, net 948,448 487,735
Accrued interest receivable (net of reserve for
uncollected interest of $-0-and $-0-) 205,980 212,644
Other assets 85,430 34,224
----------- -----------
TOTAL ASSETS $32,623,919 $32,187,548
=========== ===========
LIABILITIES
Deposits $21,378,707 $20,847,502
Federal Home Loan Bank advance 1,000,000 1,000,000
Deferred income taxes 318,105 358,818
Accrued interest payable and other liabilities 180,160 189,656
----------- -----------
TOTAL LIABILITIES 22,876,972 22,395,976
----------- -----------
STOCKHOLDERS' EQUITY
Preferred Stock, $.10 par value;
500,000 shares authorized, none issued - -
Common Stock, $.10 par value;
2,000,000 shares authorized, 661,428 issued;
567,093 outstanding at June 30, 1999
and at March 31, 1999 66,143 66,143
Additional paid - in capital 6,180,750 6,178,859
Treasury Stock, at cost (94,335 shares at
June 30, 1999 and at March 31, 1999) (1,326,770) (1,326,770)
Retained Earnings - substantially restricted 4,886,156 4,890,911
Unearned Employee Stock Ownership Plan shares (ESOP) (406,380) (419,074)
Unearned Restricted Stock Plan shares (RSP) (266,290) (284,217)
Accumulated other comprehensive income 613,338 685,720
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 9,746,947 9,791,572
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $32,623,919 $32,187,548
=========== ===========
See accompanying notes to the unaudited consolidated financial statements.
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SISTERSVILLE BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
Three Months Ended June 30,
1999 1998
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INTEREST AND DIVIDEND INCOME
Taxable interest on loans $ 482,911 $ 501,151
Taxable interest on investments 69,204 87,476
Nontaxable interest on loans 3,757 1,925
Nontaxable interest on investments 10,279 -
Dividends on Federal Home Loan Bank Stock 3,818 3,650
Dividends on Federal Home Loan Mortgage
Corporation Stock 2,867 681
----------- -----------
Total interest and dividend income 572,836 594,883
----------- -----------
INTEREST EXPENSE
Deposits 221,473 213,329
Federal Home Loan Bank advance 13,018 -
----------- -----------
Total interest expense 234,491 213,329
----------- -----------
NET INTEREST INCOME 338,345 381,554
PROVISION FOR LOAN LOSSES 1,095 1,050
----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 337,250 380,504
NONINTEREST INCOME
Service charges 8,621 7,614
Gain on sale securities available for sale - 92,927
Other income 606 456
----------- -----------
Total noninterest income 9,227 100,997
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NONINTEREST EXPENSE
Compensation and employee benefits 128,256 213,396
Occupancy 11,375 8,916
Furniture and equipment expense 8,662 7,940
Deposit insurance premiums 3,100 3,305
Supervisory examination, audit and legal fees 18,095 25,554
Advertising and public relations 7,226 6,199
Service bureau expense 17,610 13,815
Franchise, payroll and other taxes 14,162 15,165
Other expenses 15,887 15,620
----------- -----------
Total noninterest expense 224,373 309,910
----------- -----------
Income before income taxes 122,104 171,591
INCOME TAXES 37,917 61,557
----------- -----------
NET INCOME $ 84,187 $ 110,034
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EARNINGS PER SHARE (Note 4)
Basic $ .17 $ .17
=========== ===========
Diluted $ .16 $ .19
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AVERAGE SHARES OUTSTANDING - BASIC 508,283 581,595
=========== ===========
AVERAGE SHARES OUTSTANDING - DILUTED 522,778 581,595
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See accompanying notes to the unaudited consolidated financial statements.
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SISTERSVILLE BANCORP, INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Three Months Ended June 30,
1999 1998
----------- -----------
NET INCOME $ 84,187 $ 110,034
Other comprehensive income, net of tax:
Unrealized gain (loss) on securities:
Unrealized holding gain (loss) arising
during the period (72,382) 16,637
Reclassification adjustment for gains
included in net income - (60,932)
----------- -----------
Other comprehensive income (loss) (72,382) (44,295)
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COMPREHENSIVE INCOME $ 11,805 $ 65,739
=========== ===========
See accompanying notes to the unaudited consolidated financial statements.
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SISTERSVILLE BANCORP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Three Months Ended June 30,
1999 1998
----------- -----------
OPERATING ACTIVITIES
Net income $ 84,187 $ 110,034
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and accretion, net 13,833 8,917
Gain on sale of available for sale securities - (92,927)
Provision for loan losses 1,095 1,050
Deferred federal income taxes - (34,678)
ESOP amortization 14,585 34,532
RSP amortization 17,927 -
Decrease (increase) in accrued interest
receivable and other assets (44,542) (28,478)
Increase (decrease) in accrued interest payable
and other liabilities (9,496) 110,900
----------- -----------
Net cash provided by operating activities 77,589 109,350
----------- -----------
INVESTING ACTIVITIES
Proceeds from sale of available for sale securities - 94,907
Purchase of available for sale securities (660,000) (22,400)
Proceeds from maturity of available
for sale securities 500,000 -
Principal collected on mortgage - backed securities 100,079 65,089
Net increase in loans (240,980) (525,550)
Purchases of office properties and equipment (471,630) (75,158)
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Net cash used for investing activities (772,531) (463,112)
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FINANCING ACTIVITIES
Net increase (decrease) in deposits 531,205 (413,552)
Dividends paid (88,941) (97,362)
----------- -----------
Net cash provided by/(used for)
financing activities 442,264 (510,914)
----------- -----------
Change in cash and cash equivalents (252,678) (864,676)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 1,873,799 1,566,037
----------- -----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 1,621,121 $ 701,361
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest on deposits and borrowings $ 234,373 $ 213,983
Income taxes 124,520 40,090
See accompanying notes to the unaudited consolidated financial statements.
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SISTERSVILLE BANCORP, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The consolidated financial statements of Sistersville Bancorp, Inc. (the
"Company"), include its wholly-owned subsidiary, First Federal Savings Bank
(the "Bank"). All significant intercompany balances and transactions have
been eliminated.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-QSB and, therefore, do
not necessarily include all information that would be included in audited
financial statements. The information furnished reflects all adjustments
which are, in the opinion of management, necessary for a fair statement of the
results of operations. All such adjustments are of a normal recurring nature.
The results of operations for the interim periods are not necessarily
indicative of the results to be expected for the fiscal year ended March 31,
2000.
These statements should be read in conjunction with the consolidated
statements as of and for the fiscal year ended March 31, 1999, and related
notes which are included in the Company's Annual Report on Form 10-KSB (file
no. 0-22535).
NOTE 2 - CONVERSION TO STOCK FORM OF OWNERSHIP AND FORMATION OF HOLDING
COMPANY
On December 5, 1996, the Board of Directors of First Federal Savings and Loan
Association of Sistersville (the "Association") approved a plan of conversion
(the "Plan") providing for the conversion of the Association from a
federally chartered mutual savings and loan to a federally chartered stock
savings bank and the simultaneous issuance of all of its outstanding stock to
a newly formed holding company, Sistersville Bancorp, Inc. After approval by
the regulatory authorities and the Association's members, the Conversion was
completed on June 25, 1997. As a result of the conversion, the Company was
formed and the Bank became a wholly-owned subsidiary of the Company.
In connection with the completion of the Conversion on June 25, 1997, the
Company completed the sale of 661,428 shares of stock at $10.00 per share.
From the proceeds, $66,143 was allocated to common stock based on a par value
of $.10 per share and $6,127,984, which is net of conversion costs of
$420,153, was allocated to additional paid in capital.
NOTE 3 - RECENT ACCOUNTING STANDARDS
In July 1997, the FASB issued Statement No. 130, "Reporting Comprehensive
Income." Statement No. 130 is effective for fiscal years beginning after
December 15, 1997. This statement establishes standards for reporting and
presentation of comprehensive income and its components (revenue, expenses,
gains, losses) in a full set of general purpose financial statements. It
requires that all items that are required to be recognized under accounting
standards as components of comprehensive income be reported in a financial
statement that is presented with the same prominence as other financial
statements. Statement No. 130 requires that companies (i) classify items of
other comprehensive income by their nature in a financial statement and (ii)
display the accumulated balance of other comprehensive income separately from
retained earnings and additional paid-in capital in the equity section of the
statement of financial condition. Reclassification of financial statements
for earlier periods provided for comprehensive purpose is required. The
Company current holds securities classified as available-for-sale. Under the
provisions of Statement No. 130, unrealized gains and losses on securities
classified as available-for-sale are a component of comprehensive income.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 provides accounting and
reporting standards for derivatives instruments, including certain derivative
instruments embedded in other contracts, by requiring the recognition of those
items as assets or liabilities in the statement of financial position,
recorded at fair value. SFAS No. 133 precludes a held-to-maturity security
from being designated as a hedge item. However, at the date of initial
application of SFAS No. 133, an entity is permitted to transfer any
held-to-maturity security into the available-for-sale or trading categories.
The unrealized holding gain or loss on such transferred securities shall be
reported consistent with the requirements of SFAS No. 115, "Accounting for
Certain Investment in Debt and Equity Securities." Such transfers do not
raise an issue regarding an entity's intent to hold other debt securities to
maturity in the future. SFAS No. 133 applies prospectively for all fiscal
quarters of all years beginning after June 15, 1999. Earlier adoption is
permitted for any fiscal quarter that begins after the issue date of SFAS No.
133. Management does not believe the adoption of SFAS No. 133 will have a
material impact on the Company.
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8
In October 1998, the FASB issued SFAS No. 134, "Accounting for Mortgage-Backed
Securities Retained after the Securitization of Mortgage Loans Held for Sale
by a Mortgage Banking Enterprise." SFAS No. 134 amends SFAS No. 65,
"Accounting for Certain Mortgage Banking Activities" and SFAS No. 115
"Accounting for Certain Investments in Debt and Equity Securities" to require
that after the securitization of mortgage loans held for sale, an entity
engaged in mortgage banking activities classify the resulting mortgage-backed
securities or other retained interests based on its ability and intent to sell
or hold those investments. The statement is effective for the first fiscal
quarter beginning after December 15, 1998. The adoption of SFAS No. 134 did
not have a material impact on the Company.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Comparison of Financial Condition at June 30, 1999, and March 31, 1999
- ----------------------------------------------------------------------
Total assets increased by approximately $436,000 to $32,624,000 at June 30,
1999, from $32,188,000 at March 31, 1999. Cash and cash equivalents decreased
$253,000 to $1,621,000 at June 30, 1999, from $1,874,000 at March 31, 1999.
The decrease represented the outflow of cash associated with the purchase of
available for sale securities, increase in loan production, and purchase of
office properties and equipment offset by the principal collected on
mortgage-backed securities, maturity of available for sale securities, and
increase in depositors' investment in funds. Investment securities decreased
$56,000 from $5,259,000 at March 31, 1999, to $5,203,000 at June 30, 1999.
The decrease was the result of $500,000 in matured U.S. Agency securities,
$100,000 in principal collected on mortgage-backed securities, and decrease
in the market value of available-for-sale securities in the amount of
$113,000 offset by purchase of U.S. Agency securities in the amount of
$650,000. Net loans receivable increased $240,000 from $24,320,000 at March
31, 1999, to $24,560,000 at June 30, 1999. The increase in loans was
attributable to an increase in one-to-four family residential mortgage loans.
Such increases primarily reflect the economic health of the Bank's market
area and the competitive pricing of the Bank's loan product. Office property
and equipment increased $461,000 from $488,000 at March 31, 1999, to $949,000
at June 30, 1999, which was the direct result of land purchased in
Parkersburg, West Virginia for the construction of a branch office.
Total liabilities increased $481,000 from $22,396,000 at March 31, 1999 to
$22,877,000 at June 30, 1999. The increase was the result of an increase in
deposits by $531,000 from $20,848,000 at March 31, 1999 to $21,379,000 at June
30, 1999. This increase primarily represents funds invested by depositors
because of the stability of the Bank's deposit account interest rates compared
to a reduction in deposit interest rates for alternative investment products
available. This increase was offset by the $41,000 decrease in deferred
income taxes from $359,000 at March 31, 1999 to $318,000 at June 30, 1999
which was the result of the tax effect on the decrease in the market value of
available-for-sale securities during the period.
Stockholders' equity decreased $45,000 to $9,747,000 at June 30, 1999 compared
to $9,792,000 at March 31, 1999. The decrease was attributable to the payment
of dividends in the amount of $89,000 and a $72,000 decrease in the market
value of available-for-sale securities net of deferred taxes. This decrease
was offset by net income of $84,000, allocation of shares in the ESOP
amounting to $15,000 and vesting of shares in the RSP in the amount of
$18,000.
Comparison of the Results of Operations for the Three Months Ended June 30,
- ---------------------------------------------------------------------------
1999 and 1998
- -------------
Net income decreased by $26,000, or 23.5%, from net income of $110,000 for the
three months ended June 30, 1998, to net income of $84,000 for the three
months ended June 30, 1999.
Interest and dividend income decreased $22,000, or 3.7%, to $573,000 for the
three months ended June 30, 1999, compared to $595,000 for the three months
ended June 30, 1998. The decrease in interest and dividend income was due to
the decrease in interest on loans of $16,000, or 3.3%, and a decrease in
interest on investments of $8,000, or 9.1%. The decrease in interest on loans
was due to a decline of 49 basis points in the average yield from 8.45% at
June 30, 1998 to 7.96% for the same period in 1999, offset by an increase in
the average balance of loans of $680,000 for the three months ended June 30,
1999 as compared to the same period in 1998. Interest on investments
decreased for the three months ended June 30, 1999, as compared to June 30,
1998, as a result of downward fluctuations in yields on investment securities
and by a decrease in the average balance of investments of $581,000 from $7.0
million for the three months ended June 30, 1998 to $6.4 million for the three
months ended June 30, 1999.
Interest expense increased $21,000 for the three months ended June 30, 1999 to
$234,000 as compared to $213,000 for the same period in 1998. The increase
was the direct result of interest charged in the amount of $13,000 on a $1.0
million advance from the Federal Home Loan Bank which was not outstanding
during the three month period ended June 30, 1998.
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9
Net interest income decreased $43,000, or 11.3%, from $381,000 for the three
months ended June 30, 1998, to $338,000 for the three months ended June 30,
1999. The decrease is primarily attributable to a decrease in average yield
on interest-earning assets of 37 basis points from 7.62% for the three months
ended June 30, 1998 to 7.25% for the three months ended June 30, 1999. The
Company's net yield on interest-earning assets decreased from 4.89% for the
three months ended June 30, 1998 to 4.29% for the three months ended June 30,
1999.
Management regularly performs an analysis to identify the inherent risk of
loss in its loan portfolio. This analysis includes evaluation of
concentrations of credit, past loss experience, current economic conditions,
amount and composition of the loan portfolio (including loans being
specifically monitored by management), estimated fair value of underlying
collateral, loan commitments outstanding, delinquencies, and other factors.
Based on this analysis, management established an allowance for loan losses.
The allowance for loan losses is adjusted periodically by a provision for loan
losses which is charged to operations based on management's evaluation of the
losses that may be incurred in the Bank's loan portfolio. The provision for
loan losses increased to $1,095 for the three months ended June 30, 1999, from
$1,050 for the three months ended June 30, 1998 based on management's analysis
of the reserve's adequacy.
The Bank will continue to monitor its allowance for loan losses and make
future additions to the allowance through the provision for loan losses as
economic conditions dictate. Although the Bank maintains its allowance for
loan losses at a level that it considers to be adequate to provide for the
inherent risk of loss in its loan portfolio, there can be no assurance that
future losses will not exceed estimated amounts or that additional provisions
for loan losses will not be required in future periods. In addition, the
Bank's determination as to the amount of its allowance for loan losses is
subject to review by its primary federal regulator, the Office of Thrift
Supervision ("OTS"), as part of its examination process, which may result in
the establishment of an additional allowance based upon the judgment of the
OTS after a review of the information available at the time of the OTS
examination.
Noninterest income decreased by $92,000 from $101,000 for the three months
ended June 30, 1998, to $9,000 for the three months ended June 30, 1999. The
decrease is primarily attributable to a gain on the sale of available-for-sale
securities in the 1998 period of $93,000 which was not present in the 1999
period. The remaining portion of noninterest income is comprised primarily of
service charges on deposit accounts.
Noninterest expense decreased by $86,000 from $310,000 for the three months
ended June 30, 1998, to $224,000 for the three months ended June 30, 1999.
Compensation and employee benefits decreased by $85,000 from $213,000 for the
three months ended June 30, 1998, to $128,000 for the three months ended June
30, 1999. The decrease is due to compensation costs associated with a special
one-time retirement agreements executed by four directors resulting in a
pre-tax charge of approximately $94,000 in the three month period ending
June 30, 1998. Under terms of the agreements, the four directors accepting
the offer relinquishe their positions as directors on July 2, 1998. This
decrease was offset by the vesting of Restricted Stock Plan shares in the
amount of $15,000 for the three months ended June 30, 1999. The RSP was
initiated in July, 1998, and will result in stock awarded to employees at a
rate of one-fifth per year at July 16, 1998, through 2002.
Income tax expense decreased by $24,000 from $62,000 for the three months
ended June 30, 1998 to $38,000 for the three months ended June 30, 1999. The
decrease is due to a decrease in pre-tax income.
Year 2000
- ---------
Rapid and accurate data processing is essential to the Bank's operations.
Many computer programs that can only distinguish the final two digits of the
year entered (a common programming practice in earlier years) are expected to
read entries for the Year 2000 as the year 1900 or as zero and incorrectly
attempt to compute payment, interest, delinquency, and other data. The Bank
has been evaluating both information technology (computer systems) and
non-information technology systems (e.g., vault timers and electronic door
locks). Based upon such evaluations, management has determined that the Bank
has Year 2000 risk in three areas: (1) Bank's own computers (2) Computers of
others used by the Bank's borrowers, and (3) Computers of others who provide
the Bank with data processing.
BANK'S OWN COMPUTERS. The Bank has upgraded its computer system to address
the Year 2000 risk. The Bank does not expect to have material additional
costs to address this risk. The Bank has successfully completed testing of
its computer system for Year 2000 compliance. The upgrade costs did not have
a material impact on the Company's consolidated financial position or results
of operations.
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10
COMPUTERS OF OTHERS USED BY THE BANK'S BORROWERS. The Bank has evaluated most
of its borrowers and does not believe the Year 2000 problem should, on an
aggregate basis, impact their ability to make payments to the Bank. The Bank
believes that most of its residential borrowers are not dependent on their
home computers for income and that none of their commercial borrowers are so
large that a Year 2000 problem would render them unable to collect revenue or
rent and, in turn, be unable to continue to make loan payments to the Bank.
The Bank does not expect any material costs to address this risk area and
believes they are Year 2000 compliant in this risk area.
COMPUTERS OF OTHERS WHO PROVIDE THE BANK WITH DATA PROCESSING. Should the
computers of third party data processing providers prove to be non-compliant
with the Year 2000, the Bank would likely experience significant delays,
mistakes, or failures. These delays, mistakes, or failures could have a
significant impact on the Bank's financial condition and results of operation.
The third party service bureau which provides most of the Bank's data
processing has advised the Bank that it expects to be fully compliant before
the Year 2000. Testing of the data processing provided by this service bureau
was completed in February, 1999, whereby various Year 2000 date scenarios were
input, and transactional processing was completed satisfactorily. Other data
processing providers, used by the Bank to a much lesser extent, have advised
the Bank that Year 2000 testing and compliance has been successfully
completed.
CONTINGENCY PLAN. The Bank is monitoring its service bureau to evaluate
whether the bureau's data processing system will fail and is being provided
with periodic updates on the status of testing and upgrades being made by the
service bureau. If the Bank service bureau fails, the Bank will attempt to
locate an alternative service bureau that is Year 2000 compliant. If the Bank
is unsuccessful, the Bank will calculate loan and deposit balances and
interest using manual ledgers. If this labor intensive approach is necessary,
management and employees will become much less efficient. However, the Bank
believes that it would be able to operate in this manner indefinitely, until
its existing service bureau, or their replacement, is able to again provide
data processing services. If very few financial institution service bureaus
were operating in the Year 2000, the Bank's replacement costs, assuming the
Bank could negotiate an agreement, could be material.
Liquidity and Capital Resources
- -------------------------------
The Bank's primary sources of funds are deposits, amortization and prepayment
of loans, maturities of investment securities, and funds provided from
operations. While scheduled loan repayments are a relatively predictable
source of funds, deposit flows and loan prepayments are greatly influenced by
general interest rates, economic conditions, and competition. In addition,
the Bank invests excess funds in overnight deposits which provide liquidity to
meet lending requirements.
The Bank has other sources of liquidity if a need for additional funds arises.
Additional sources of liquidity include funds available from the Federal Home
Loan Bank ("FHLB") of Pittsburgh amounting to $20.6 million. As of June 30,
1999, the Bank had $1 million in outstanding advances from the FHLB.
As of June 30, 1999, the Bank had $1,083,000 in outstanding mortgage and
construction loan commitments. Management believes that it has adequate
sources to meet the actual funding requirements.
Management monitors the Bank's tangible, core, and risk-based capital ratios
in order to assess compliance with OTS regulations. At June 30, 1999, the
Bank exceeded the minimum capital ratios requirements imposed by the OTS.
At June 30, 1999, the Bank's capital ratios were as follows:
Bank
Requirement Actual
----------- ------
Tangible capital 1.50% 26.41%
Core capital 4.00% 26.41%
Risk-based capital 8.00% 52.83%
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11
Risk Elements
- -------------
The table below presents information concerning nonperforming assets including
nonaccrual loans, renegotiated loans, loans 90 days or more past due, other
real estate loans, and repossessed assets. A loan is classified as nonaccrual
when, in the opinion of management, there are serious doubts about
collectibility of interest and principal. At the time the accrual of interest
is discontinued, future income is recognized only when cash is received.
Renegotiated loans are those loans which terms have been renegotiated to
provide a reduction or deferral of principal or interest as a result of the
deterioration of the borrower.
June 30, March 31,
1999 1999
--------- ---------
(dollars in thousands)
Loans on nonaccrual basis $ $ 2
Loans past due 90 days or more - -
Renegotiated loans - -
--------- ---------
Total nonperforming loans - 2
--------- ---------
Other real estate - -
Repossessed assets - -
--------- ---------
Total nonperforming assets $ - $ 2
========= =========
Nonperforming loans as a percent of total loans - 0.01%
========= =========
Nonperforming assets as a percent of total assets - 0.01%
========= =========
Allowance for loan losses to nonperforming loans - 8612.50%
========= =========
Management monitors impaired loans on a continual basis. As of June 30, 1999,
the Company had no impaired loans.
During the three months ended June 30, 1999, loans increased $241,000 and
nonperforming loans decreased $2,000 while the allowance for loan losses
decreased $750 for the same period. The percentage of allowance for loan losses
to loans outstanding remained .7% during this time period. The collateral
requirements on such loans reduce the risk of potential losses to an acceptable
level in management's opinion.
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12
PART II. OTHER INFORMATION
Item 1. Legal proceedings
The registrant was not engaged in any material pending legal proceedings as
of the date of this Report. From time to time, the Bank is a party to legal
proceedings within the normal course of business wherein it enforces its
security interest in loans made by it, and other matters of a like kind.
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
Financial Data Schedule
<PAGE>
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused the report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SISTERSVILLE BANCORP, INC.
Date: August 2, 1999 By: /s/ Stanley M. Kiser
-------------------------------------
Stanley M. Kiser
President and Chief Executive Officer
(Duly Authorized Officer)
Date: August 2, 1999 By: /s/ Stanley M. Kiser
-------------------------------------
Stanley M. Kiser
President and Chief Executive Officer
(Principal Executive and Financial Officer)
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