UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
{ X } Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Quarterly Period Ended March 31, 1998 or
{ } Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Transition period from ____________ to
___________
Commission File Number: 0-23605
-------
CAVALRY BANCORP, INC.
--------------------------------
(exact name of registrant as specified in its charter)
Tennessee 62-1721072
- -------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) I.D. Number)
114 West College Street, Murfreesboro, Tennessee 37130
------------------------------------------------ -----------------
(Address of principal executive offices) (Zip Code)
(615) 893-1234
-----------------------
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 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 latest practicable date.
Common Stock Issued and Outstanding: 7,538,250 as of May 6, 1998.
<PAGE>
CAVALRY BANCORP, INC.
Table of Contents
Part I. Financial Information Page
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets at March 31, 1998
And December 31, 1997 1
Consolidated Statements of Income for the Three Month
Periods Ended March 31, 1998 and 1997 2
Consolidated Statements of Cash Flows for the Three Month
Periods Ended March 31, 1998 and 1997 3-4
Notes to consolidated Financial Statements 5-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-11
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
Part II. Other Information 12-13
Signatures 14
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CAVALRY BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, except per share data)
(Unaudited)
At At
March 31, December 31,
ASSETS 1998 1997
-------------- --------
Cash $ 12,463 $ 10,695
Interest-bearing deposits with
other financial institutions 77,301 26,963
--------- -------
Cash and cash equivalents 89,764 37,658
Investment available-for-sale (note 3) 10,051 10,077
Investment securities held to maturity (note 3) 5,642 1,700
Mortgage-backed securities held to maturity (note 4) 1,166 1,301
Loans held for sale, at estimated fair value (note 5) 8,782 4,855
Loans receivable, net 221,552 212,979
Accrued interest receivable 2,058 1,724
Office properties and equipment, net 8,245 8,072
Federal Home Loan Bank of Cincinnati stock - 1,660 1,631
at cost
Other assets 1,934 2,132
--------- ---------
$ 350,854 $ 282,129
========= =========
LIABILITIES AND EQUITY
LIABILITIES:
Deposits $246,687 248,267
Accrued interest payable 320 328
Advance payments by borrowers for property
taxes and insurance 571 295
Other liabilities and accrued expenses 3,573 2,792
--------- --------
Total liabilities 251,151 251,682
--------- --------
STOCKHOLDERS' EQUITY:
Preferred Stock
250,000 shares, no par value
per share, authorized; none
issued and outstanding - -
Common Stock
49,750,000 shares, no par value per share,
authorized; 7,538,250 issued and outstanding 73,901 NA
Retained earnings 31,833 30,452
Unallocated ESOP Shares (6,031) NA
Unrealized loss on investment securities
Available-for-sale, net of taxes - (5)
-------- --------
Total Stockholders' Equity 99,703 30,447
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $350,854 $282,129
======== ========
See accompanying notes to consolidated financial statements.
1
<PAGE>
CAVALRY BANCORP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended
March 31,
-----------------------
1998 1997
------ -----
Interest and dividend income:
First mortgage loans $ 2,949 2,962
Other loans 2,332 1,801
Investment securities 197 153
Deposits with other financial institutions 934 173
Mortgage-backed securities held to maturity 22 24
------ -----
Total interest and dividend income 6,434 5,113
------ ------
Interest expense on deposits 2,653 2,172
------ ------
Net interest income 3,781 2,941
------ ------
Provision for loan losses 54 75
------ ------
Net interest income after provision
for loan losses 3,727 2,866
------ ------
Noninterest income:
Servicing income 107 138
Gain on sale of loans 567 135
Gain on sale of office properties
and equipment 42 -
Deposit servicing fees and charges 332 268
Trust service fees 163 137
Other operating income 67 68
------ ------
Total noninterest income 1,278 746
------ ------
Noninterest expenses:
Compensation, payroll taxes and
fringe benefits 1,597 1,224
Occupancy expense 143 125
Supplies, communications and other
office expenses 168 131
Federal insurance premiums 37 7
Advertising expense 45 53
Equipment and service bureau expense 562 438
Other operating expenses 242 176
------ ------
Total noninterest expenses 2,794 2,154
Earnings before income tax expense 2,211 1,458
------ ------
Income tax expense 830 564
------ ------
Net earnings 1,381 894
====== ======
Basic earnings per share $0.20 N/A
====== ======
Weighted average shares outstanding (1) 6,935,190
(1) Cavalry Bancorp's initial public offering closed on March 16, 1998. For
purposes of earnings per share calculations, shares issued on March 16, 1998
have been assumed to be outstanding as of January 1, 1998.
See accompanying notes to consolidated financial statements.
2
<PAGE>
CAVALRY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Three Months Ended
March 31,
----------------------
1998 1997
Operating activities: ------ ------
Net earnings $1,381 894
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Provision for loan losses 54 75
Gain on sales of loans, net (567) (135)
Gain on sale of office properties
and equipment (42) -
Depreciation and amortization on 306 237
Office properties and equipment
Net amortization (accretion) of
mortgage-backed securities premiums, net 37 -
Amortization of deferred loan
origination fees (279) (248)
Loan fees collected 305 263
Proceeds from sales of loans 13,176 14,531
Origination of loans held for sale (16,536) (12,901)
(Increase) decrease in accrued
interest receivable (334) (110)
Decrease (increase) in other assets 195 56
Increase (decrease) in accrued
interest payable (8) 24
Stock dividends on Federal Home
Loan Bank stock (29) -
(Decrease) increase in accrued expenses
and other liabilities 80 (177)
(Decrease) increase in income
taxes payable 702 501
------ ------
Net cash provided by Operating activities (1,559) 3,010
------- ------
Investing activities:
Decrease (increase) in loans
receivable, net (8,654) (3,831)
Principal payments on mortgage
backed securities held to maturity 130 17
Proceeds from the sales of office
properties and equipment 203 -
Purchase of investment securities
held to maturity (4,940) -
Proceeds from maturities of investment securities 1,000 1,000
Purchase of office properties and equipment (639) (1,016)
------- -------
Net cash used in investing activities (12,900) (3,830)
------- -------
3
<PAGE>
Financing activities:
Net (decrease) increase in deposits (1,582) 9,690
Issuance of common stock 69,352 -
Expenses of stock offering (1,481) -
Net increase in advance
payments by borrowers for
property taxes and insurance 276 301
------- ------
Net Cash provided by
financing activities 66,565 9,991
------- -------
INCREASE IN CASH AND CASH EQUIVALENTS 52,106 9,171
CASH AND EQUIVALENTS, BEGINNING OF PERIOD 37,658 19,519
-------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $89,764 28,690
======== =======
SUPPLEMENT DISCLOSURES OF CASH
FLOW INFORMATION:
Payments during the period for:
Interest 2,662 2,147
======== ========
Income taxes - -
======== ========
SUPPLEMENTAL DISCLOSURES OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Interest credited to deposits 1,121 661
======== ========
Decrease in deferred tax asset related
to unrealized gain on investments 3 -
======== ========
See accompanying notes to consolidated financial statements.
4
<PAGE>
CAVALRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
Cavalry Bancorp, Inc. (the "Company"), was organized on November 5,
1997 under Tennessee law at the direction of Cavalry Banking (the
"Bank") to acquire all of the capital stock that the Bank would issue
upon its conversion from the mutual to stock form of ownership. The
conversion was completed on March 16, 1998 through the sale and
issuance of 7,538,250 shares of common stock by the Company at a price
of $10.00 per share. Information set forth in this report relating to
periods prior to the Conversion, including consolidated financial
statements and related data, relates to Cavalry Banking and its
subsidiaries.
The accompanying consolidated financial statements of the Company have
been prepared in accordance with instructions to Form 10-Q.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. 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 periods.
The results of operations for the three months ended March 31, 1998 are
not necessarily indicative of the results to be expected for the year
ending December 31, 1998. The consolidated financial statements and
notes thereto should be read in conjunction with the audited financial
statements and notes thereto for the year ended December 31, 1997.
2. Earnings Per Share
Earnings per share has been computed for the three months ended March
31, 1998 based upon weighted average common shares outstanding of
6,935,190. For the purpose of computing weighted average shares
outstanding for the three months ended March 31, 1998, shares issued in
the Conversion on March 16, 1998 were assumed to have been outstanding
since January 1, 1998. Earnings per share for the three month ended
March 31, 1997 is not presented as there was no common stock issued or
outstanding.
Statement of Financial Accounting Standards No. 128, Earnings Per
Share, established new standards for computing and presenting earnings
per share. The standard is effective for annual and interim periods
ending after December 15, 1997. This standard had no impact on the
computation of the Company's earnings per share upon adoption.
5
<PAGE>
3. Investment Securities Held to Maturity and Investment Securities
Available-for-Sale:
The amortized cost and estimated fair values of investment securities
held to maturity and available-for-sale at March 31, 1998 and December
31, 1997.
Investment securities held to maturity:
March 31, 1998
------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---------------------------------------------
U.S. Treasury securities and
Obligations of U.S.
Government agencies $5,642 - 1 5,641
====== ===== ===== ======
December 31, 1997
------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---------------------------------------------
U.S. Treasury securities and
Obligations of U.S.
Government agencies $1,700 1 1 1,700
====== ===== ===== ======
Investment securities available-for-sale:
March 31, 1998
------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---------------------------------------------
U.S. Treasury securities and
Obligations of U.S.
Government agencies $10,051 - - 10,051
======= ===== ===== ======
December 31, 1997
------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---------------------------------------------
U.S. Treasury securities and
Obligations of U.S.
Government agencies $10,085 - 8 10,077
======== ===== ===== ======
6
<PAGE>
4. Mortgage-backed Securities Held to Maturity:
March 31, 1998
------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---------------------------------------------
Mortgage-backed securities:
FHLMC $291 4 - 295
FNMA 875 8 3 880
----- ---- ---- -----
Total mortgage backed
securities held to maturity $1,166 12 3 1,175
======= ==== ==== ======
December 31, 1997
------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---------------------------------------------
Mortgage-backed securities:
FHLMC $420 6 - 426
FNMA 881 9 4 886
----- ---- ---- -----
Total mortgage backed
securities held to maturity $1,301 15 4 1,312
======= ==== ==== ======
5. Loans Held-for-Sale, Net
Loans held for sale, net are summarized as follows:
March 1998 December 1997
---------- -------------
One-to-four family loans $8,782 4,855
------- ------
Total loans held for sale, net $8,782 4,855
------ ------
The Bank originates most fixed rate loans for immediate sale to the
Federal Home Loan Mortgage Corporation (FHLMC) or other investors.
Generally, the sale of such loans is arranged at the time the loan
application is received through commitments.
7
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Comparison of Financial Condition at March 31, 1998 and December 31, 1997
Total assets were $350.9 million at March 31, 1998 and $282.1 million
at December 31, 1997, an increase of $68.8 million or 24.4%. This
increase resulted primarily from the proceeds of the initial public
offering of stock which was completed on March 16, 1998. As a result
of this offering, the Company realized an increase in cash of
approximately $67.8 million. These funds were invested in interest
bearing deposits and short-term investments. Cash and cash equivalents
increased $52.1 million while total investments increased $3.9 million.
Mortgage-backed securities decreased $135,000 as a result of
prepayments. Loans held for sale increased $3.9 million. The
variances resulted primarily from timing differences in the funding of
loans. Loans receivable, net increased from $213.0 million at December
31, 1997 to $221.6 million at March 31, 1998. Consumer, commercial, and
commercial real estate increased $15.5 million as a result of
additional loan officers, general market conditions and more aggressive
pricing. These gains were offset by declines in construction, land,
multifamily, and one-to-four family mortgage loans. The declines in
one-to-four family mortgage loans were primarily a result of refinancing
activity.
Deposit accounts decreased $1.6 million from December 31, 1997 to March
31, 1998. Certificates of deposit decreased $11.9 million primarily as
a result of withdrawals to fund stock purchases. This decline was
offset by a $10.3 million increase in transaction and other savings
accounts primarily as a result of active solicitation of these types of
accounts.
Stockholders' equity increased by $69.3 million from December 31, 1997
to March 31, 1998, as a result net proceeds received in the conversion
of $67.9 million and net income of $1.4 million for the three month
period ending March 31, 1998.
Nonperforming assets decreased from $150,000 at December 31, 1997 to
$36,000 at March 31, 1998.
Comparison of Operating Results for the Three Months Ended March 31, 1998
and March 31, 1997.
Net Income. Net income increased to $1.4 million for the three months
ended March 31, 1998 from $894,000 for the three months ended March 31,
1997 primarily as a result of increased investment and deposit income
offset partially by an increased provision for income taxes due to
increased income before taxes. The increase in investment and deposit
income is principally the result of additional funds available for
investment in the three month period ended March 31, 1998 from the
conversion.
8
<PAGE>
Net Interest Income. Net interest income increased 25.5% to $6.4
million for the three months ended March 31, 1998 from $5.1 million for
the same period in 1997. Interest on loans increased from $4.8 million
for the period ended March 31,1997 to $5.3 million for the same period
in 1998. This was a result of average loans outstanding increasing from
$205.6 million in 1997 to $224.1 million for the same period in 1998.
The average yield also increased from 9.3% for the period ended March
31, 1997 compared to 9.4% for the same period in 1998. This increase
was a result of growth in the commercial and consumer loan portfolio.
Income on all other investments consisting of mortgage backed
securities, investments, FHLB stock, bank deposits and federal funds
increased from $350,000 for the period ended March 31, 1997 to $1.2
million for 1998. Average investments increased from $23.7 million for
the three months in 1997 to $87.0 million for the same period in 1998 as
as a result of the investment of stock subscription funds. The average
yield declined from 5.9% for the period ended March 31, 1997 to 5.3% as
a result of the conversion funds being mostly invested in overnight and
other short-term investments.
Interest Expense. Interest expense increased from $2.2 million for
the period ended March 31, 1997 to $2.7 million for the same period in
1998. Average deposits increased from $197.2 million for the period in
1997 to $262.3 million for 1998. The average cost of deposits
decreased from 4.47% in 1997 to 4.10% in 1998. This decrease was
primarily a result of the average balance in passbook savings
increasing from $15.4 million in 1997 to $48.3 million in 1998 with the
cost declining from 1.97% in 1997 to 1.92% in 1998. The increase in
average deposits was a result of the stock subscription funds.
Provision for Loan Loses. Provision for loan losses are charges to
earnings to bring the total allowance for loan losses to a level
considered by management as adequate to provide for estimated loan
losses based on management's evaluation of the collectibility of the
loan portfolio, including the nature of the portfolio, credit
concentrations, trends in historical loss experience, specific impaired
loans and economic conditions. Management also considers the level of
problem assets giving greater weight to the level of classified assets
than to the level of nonperforming assets because classified assets
include not only nonperforming assets but also performing assets that
otherwise exhibit, in management's judgement, potential credit
weaknesses.
The provision for loan losses was $54,000 for the period ending March
31, 1998 compared to $75,000 for the same period in 1997. Classified
assets increased from $1.3 million at December 31, 1997 to $1.4 million
at March 31, 1998. Management expects classified assets to increase
moderately, although no assurances can be given that this will in fact
occur. Management's expectation is based upon its anticipation of
continued loan growth, particularly in the areas of construction,
commercial real estate, commercial and consumer lending. Management
deemed the allowance for loan losses adequate at March 31, 1998.
9
<PAGE>
Noninterest Income. Noninterest income increased to $1.3 million for
the three months ended March 31, 1998 from $746,000 for the same period
in 1997. Net gain on sale of loans increased from $135,000 for the
three months ended March 31, 1997 to $567,000 for the same period in
1998. This increase was a result of increased volume, increased
pricing spreads, and overall more favorable market conditions in 1998
than in 1997. Deposit servicing fees increased from $268,000 in 1997
to $332,000 as a result of increased volume in transactional accounts
and an increased pricing structure. Trust fees also increased from
$137,000 in 1997 to $163,000 in 1998 because of more trust assets under
management and an increase in fees charged. The Bank also recorded a
pre-tax gain of $42,000 on the sale of the branch building and property
on South Tennessee Boulevard. This branch operation was relocated to a
new facility at SE Broad Street. These gains were offset by a decline
in loan servicing income from $138,000 in 1997 to $107,000 in 1998
largely as a result of increased amortization of originated servicing
rights.
Noninterest Expense. Noninterest expense was $2.8 million for the
period ending March 31, 1998 compared to $2.2 million in 1997.
Compensation and other employee benefits increased from $1.2 million at
March 31, 1997 to $1.6 million at March 1998 primarily as a result of
an increase in commission expenses and related fringe benefits.
Commission expense increased from $100,000 for the period ending March
31, 1997 compared to $278,000 for the same period in 1998 as a result
of higher production volume. Non commission related compensation also
increased from $832,000 in 1997 to $971,000 in 1998 as a result of
increased staffing to service the increased volumes in deposits and
lending and normal annual salary increases. The increases in other
categories of operating expenses generally are attributable to the
growth of the Company. The Company anticipates that other operating
expenses will continue to increase in subsequent periods as a result of
increased cost associated with operating a public company.
Income taxes. The provision for income taxes was $830,000 for the
period ended March 31, 1998 compared to $564,000 for the same period in
1997. This was a result of higher income before income taxes for the
period ended March 31, 1998.
10
<PAGE>
Liquidity and Capital Resources
The Company's primary sources of funds are customer deposits, proceeds
from principal and interest payments from and the sale of loans,
maturing securities and FHLB of Cincinnati advances. While maturities
and scheduled amortization of loans are a predictable source of funds,
deposit flows and mortgage prepayments are influenced greatly by
general interest rates, other economic conditions and competition.
Regulations of the Office of Thrift Supervision ("OTS"), the Bank's
primary regulator, require the Bank to maintain an adequate level of
liquidity to ensure the availability of sufficient funds to fund loan
originations, deposit withdrawals and to satisfy other financial
commitments. Currently, the OTS regulatory liquidity for the Bank is
the maintenance of an average daily balance of liquid assets (cash and
eligible investments) equal to at least 4% of the daily balance of net
withdrawal deposits and short-term borrowings. This liquidity
requirement is subject to periodic change. The Company and the Bank
generally maintain sufficient cash and short-term investments to meet
short-term liquidity needs. At March 31, 1998, cash and cash
equivalents totaled $89.8 million or 25.6% of total assets, and
investments available for sale totaled $10.0 million. At March 31,
1998, the Bank also maintained, but did not draw upon, a line of credit
with the FHLB of Cincinnati in the amount of $15.0 million.
As of March 31, 1998, the Bank's regulatory capital was in excess of
all applicable regulatory requirements. At March 31, 1998, under
regulations of the OTS, the Bank's tangible, core and risk-based
capital ratios were 21.7%, 21.7% and 28.8%, respectively, compared to
requirements of 1.5%, 3.0% and 8.0%, respectively.
At March 31, 1998, the Bank had loan commitments (excluding undisbursed
portions of construction loans) of approximately $3.6 million. In
addition, at March 31, 1998, the unused portion of lines of credit
extended by the Bank was approximately $6.4 million for consumer lines
of credit and $20.1 million for commercial lines of credit. Standby
letters of credit and financial guarantees are conditional commitments
issued by the Bank to guarantee the performance of a customer to a
third party. Those guarantees are primarily issued to support public
and private borrowing arrangements, including commercial paper, bond
financing, and similar transactions. Most guarantees are for a term of
one to two years. The credit risk involved in issuing letters of
credit is essentially the same as that involved in extending loan
facilities to customers. At March 31, 1998, the Bank had $6.1 million
of letters of credit outstanding.
Year 2000
Every financial institution will be posed with the Year 2000 challenge.
It is our desire to make the transition to the Year 2000 as effortless
as possible. Cavalry Banking has developed an intensive Action Plan
for addressing the concerns and risks associated with the coming
millennium. The comprehensive plan was written based on guidelines
established by the Federal Financial Institutions Examination Council's
Interagency Statement entitled "Year 2000 Project Management
Awareness." The Year 2000 Action Plan includes defined phases for
Awareness, Assessment, Renovation, Validation and Implementation.
During this quarter, the Cavalry Banking Audit Committee was assigned
responsibility for overseeing the successful completion of the Year
2000 Action Plan. The Company's various vendors, hardware and software
systems are progressing through the Renovation and Validation phases of
the Action Plan and are on track to be fully tested during the fourth
quarter of 1998.
11
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in the quantitative and qualitative
disclosures about market risks as of March 31, 1998 from that presented
in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
Part II. Other Information
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities and Use of Proceeds
Use of Proceeds: As discussed in Note 1 to Notes to Consolidated
Financial Statements under Item 1 of this Quarterly Report, the
Conversion was completed on March 16, 1998. In connection therewith:
1. The effective date of the Registration Statement on Form S-1, as
amended (File No. 333-40057) ("Registration Statement"), was
January 21, 1998.
2. The offering terminated on March 16, 1998 with the sale of all
securities registered pursuant to the Registration Statement.
3. Trident Securities, Inc., Raleigh, North Carolina, acted as
marketing agent for the Company.
4. The class of securities registered pursuant to the Registration
Statement was common stock, no par value per share. The aggregate
amount of such securities registered and sold was 7,538,250 shares
for an aggregate dollar amount of $75,382,500.
5. The total conversion offering expenses incurred by the Company were
$1.5 million, none of which were paid directly or indirectly to
directors or officers of the Company or their associates.
6. The net proceeds of the conversion offering were $73.9 million,
which were used as follows: $6.0 million to fund a loan to the
Bank's employee stock ownership plan ("ESOP") to permit the Bank's
ESOP to purchase 603,060 shares in the conversion offering; $37.0
million to acquire all of the issued and outstanding common stock
of the Bank. The remaining $30.9 million of net proceeds were
invested in short-term investment securities and overnight
deposits.
Such use of proceeds did not represent a material change in the use of
Proceeds described in the Company's Prospectus dated January 21, 1998.
Item 3. Defaults Upon Senior securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
None
12
<PAGE>
Item 6. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) Exhibits
3.1 Charter of the Registrant*
3.2 Bylaws of the Registrant*
10.1 Employment Agreement with Ed C Loughry, Jr.**
10.2 Employment Agreement with Ronald F Knight**
10.3 Severance Agreement with Hillard C. Gardner**
10.4 Severance Agreement with Ira B. Lewis**
10.5 Severance Agreement with R Dale Floyd**
10.6 Severance Agreement with M. Glenn Layne**
10.7 Severance Agreement with Joy B Jobe**
10.8 Severance Agreement with William S Jones**
10.9 Severance Agreement with David W Hopper**
10.10 Cavalry Banking Key Personnel Severance Compensation Plan**
10.11 Cavalry Banking Employee Stock Ownership Plan**
21 Subsidiaries of the Registrant**
27 Financial Data Schedule
* Incorporated herein by reference to the Registrant's Registration
Statement on Form S-1, as amended (333-40057).
** Incorporated herein by reference to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1997.
(b) Reports on Form 8-K
No Reports on Form 8-K were filed during the quarter ended March 31,
1998.
13
<PAGE>
Pursuant to the requirements of section 13 or 15(d) of the Securities
Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CAVALRY BANCORP, INC.
Date: May 6, 1998 By: /s/Ed C. Loughry, Jr.
-----------------------------
Ed C. Loughry, Jr.
President and Chief Executive
Officer
Date: May 6, 1998 By: /s/Hillard C. Gardner
-----------------------------
Hillard C. Gardner
Senior Vice President and
Chief Financial Officer
14
<PAGE>
16
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0001049535
<NAME> CAVALRY BANCORP INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 12,463
<INT-BEARING-DEPOSITS> 77,301
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 10,051
<INVESTMENTS-CARRYING> 6,808
<INVESTMENTS-MARKET> 6,816
<LOANS> 230,334
<ALLOWANCE> 2,861
<TOTAL-ASSETS> 350,854
<DEPOSITS> 246,687
<SHORT-TERM> 0
<LIABILITIES-OTHER> 4,464
<LONG-TERM> 0
0
0
<COMMON> 73,901
<OTHER-SE> 25,802
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<INTEREST-DEPOSIT> 2,653
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<EPS-PRIMARY> 0.20
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<YIELD-ACTUAL> 4.86
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</TABLE>
