<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 2000
[ ] Transition report under Section 13 or 15(d) of the Exchange Act for
the transition period from ____________ to ____________
Commission file number: 000-23991
CNB HOLDINGS, INC.
(Exact name of small business issuer as specified in its charter)
Georgia 58-2362335
(State of Incorporation) (I.R.S. Employer Identification No.)
7855 North Point Parkway
Suite 200
Alpharetta, Georgia 30022-4849
(Address of principal executive offices)
(770) 650-8262
(Issuer's telephone number, including area code)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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 [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Class Outstanding at November 10, 2000
----- ---------------------------------
Common Stock, $1.00 par value 1,000,000
Transitional Small Business Disclosure Format: Yes [ ] No [X]
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
CNB HOLDINGS, INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
---- ----
(Unaudited) (Audited)
----------- ---------
<S> <C> <C>
ASSETS
Cash and due from banks ......................................................... $ 1,425,755 $ 1,056,784
Federal funds sold .............................................................. 3,247,012 1,990,593
Investment securities:
Securities available-for-sale, at market value.................................. 10,519,702 7,530,851
Other securities ............................................................... 488,000 437,800
Loans net of allowance for loan losses
of $517,000 and $357,000........................................................ 38,586,193 26,492,806
Premises and equipment (net) .................................................... 740,662 493,302
Other assets .................................................................... 531,119 344,136
----------- -----------
TOTAL ASSETS ................................................................... $55,538,443 $38,346,272
=========== ===========
LIABILITIES
Deposits:
Non interest-bearing demand .................................................... $ 4,573,745 $ 3,061,875
Interest-bearing demand and money market........................................ 9,166,353 11,807,446
Savings ........................................................................ 19,364 5,859
Time deposits of $100,000 or more .............................................. 10,990,674 5,708,543
Other time deposits ............................................................ 18,484,766 6,198,926
----------- -----------
Total Deposits ................................................................. 43,234,902 26,782,649
Other borrowed money ............................................................ 2,964,500 2,000,000
Other liabilities ............................................................... 664,911 272,985
----------- -----------
TOTAL LIABILITIES .............................................................. 46,864,313 29,055,634
STOCKHOLDERS' EQUITY
Preferred stock, par value not stated;
10,000,000 shares authorized, no
shares issued and outstanding .................................................. -- --
Common stock, par value $1.00 per share;
10,000,000 shares authorized; 1,235,000 issued.................................. 1,235,000 1,235,000
Surplus ......................................................................... 10,170,283 10,170,283
Treasury stock, 225,103 and 139,472 shares respectively.......................... (1,893,026) (1,235,326)
Accumulated other comprehensive income (loss)-
market valuation reserve on investment
securities available-for-sale................................................... (34,065) (85,742)
Accumulated deficit.............................................................. (804,062) (793,577)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY ..................................................... 8,674,130 9,290,638
----------- -----------
TOTAL LIABILITIES AND EQUITY ................................................... $55,538,443 $38,346,272
=========== ===========
</TABLE>
See notes to the consolidated financial statements.
-2-
<PAGE>
CNB HOLDINGS, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE FOR THE
NINE-MONTH THREE-MONTH
PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income loans and leases, including fees ................................ $2,709,933 $1,401,001 $1,022,323 $573,401
Investment securities:
U.S. Treasury securities .................................................... 102,968 148,139 31,044 49,703
U.S. government agencies .................................................... 270,204 88,136 108,713 40,201
Other investments .............................................................. 19,969 15,849 3,951 2,832
Federal funds sold ............................................................. 105,320 99,017 34,155 49,075
---------- ---------- ---------- --------
Total interest income ........................................................... 3,208,394 1,752,142 1,200,186 715,212
Interest expense:
Interest bearing demand and money market .................................... 410,490 290,127 119,909 122,536
Savings ..................................................................... 245 172 98 42
Time deposits of $100,000 or more ........................................... 379,404 130,982 171,391 56,637
Other time deposits ......................................................... 545,419 165,631 266,687 74,221
Other borrowings ............................................................ 101,365 21,763 36,982 12,968
---------- ---------- ---------- --------
Total interest expense ................................................. 1,436,923 608,675 595,067 266,404
---------- ---------- ---------- --------
Net interest income ......................................................... 1,771,471 1,143,467 605,119 448,808
Provision for possible loan losses .............................................. 112,000 135,000 26,000 54,000
---------- ---------- ---------- --------
Net interest income after provision for possible loan losses ................ 1,659,471 1,008,467 579,119 394,808
Other income:
Service charges on deposit accounts ......................................... 28,061 28,112 10,530 9,609
Gains on the sale of loans and leases (net) ................................. 151,157 105,078 83,705 47,425
Gains on the sale of securities available for sale........................... -- 303 - --
Other income ................................................................ 46,466 154,912 16,727 49,781
---------- ---------- ---------- --------
Total other income ..................................................... 225,684 288,405 110,962 106,815
Other expense:
Salaries and other compensation ............................................. 858,698 623,939 307,427 234,170
Employee benefits ........................................................... 160,978 100,191 52,564 31,920
Net occupancy and equipment expense ......................................... 328,577 190,534 110,881 62,848
Professional and other outside services ..................................... 184,135 205,110 69,552 29,160
Other expense ............................................................... 363,252 305,473 126,817 115,138
---------- ---------- ---------- --------
Total other expenses ................................................... 1,895,640 1,425,247 667,241 473,236
---------- ---------- ---------- --------
Net income (loss) before income tax benefit...................................... (10,485) (128,375) 22,840 28,387
Income tax benefit.............................................................. -- -- -- --
---------- ---------- ---------- --------
Net income (loss) ............................................................... $ (10,485) $ (128,375) $ 22,840 $ 28,387
========== ========== ========== ========
Basic and diluted earnings (loss) per share ..................................... $(.01) $(.11) $.02 $.02
========== ========== ========== ========
</TABLE>
See notes to the consolidated financial statements.
-3-
<PAGE>
CNB HOLDINGS, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE FOR THE
NINE-MONTH THREE-MONTH
PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income (loss) .......................................................... 10,485) $(128,375) $ 22,840 $ 28,387
Other comprehensive income (loss), before tax:
Unrealized holding gains (losses) arising during period................. 76,449 (89,109) 70,327 35,956
Income tax benefit...................................................... (24,772) 28,745 (23,208) (12,944)
-------- --------- -------- --------
Comprehensive income (loss)................................................. $ 41,192 $(188,739) $ 69,959 $ 51,399
======== ========= ======== ========
</TABLE>
See notes to the consolidated financial statements.
-4-
<PAGE>
CNB HOLDINGS, INC.
AND SUBSIDIARY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE
NINE-MONTH
PERIOD ENDED
SEPTEMBER 30,
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss ........................................................................................ $ (10,485) $ (128,375)
Adjustments to reconcile net loss to net cash provided by and used in
operating activities:
Net (accretion) amortization of investment securities....................................... 498 12,138
Depreciation and amortization of premises and equipment..................................... 129,330 95,246
Gains on the sale of lease receivables...................................................... (151,157) (105,078)
Gains on the sale of available for sale securities.......................................... -- (303)
Provision for loan losses .................................................................. 112,000 135,000
Increase in other assets ................................................................... (211,805) (94,438)
Increase in other liabilities .............................................................. 391,926 237,540
---------- -----------
Net cash provided by and used in operating activities ................................. 260,307 151,730
Cash flows from investing activities:
Maturities of investment securities available-for-sale .......................................... 1,371,442 416,551
Purchases of investment securities available-for-sale............................................ (4,284,292) (6,463,688)
Purchases of other investments .................................................................. (50,200) (98,700)
Sales of investment securities available-for-sale................................................ -- 1,505,313
Proceeds from sale of loans and leases........................................................... 2,198,441 2,475,684
Loans originated, net of principal repayments ................................................... (14,252,671) (8,796,159)
Purchases of premises and equipment ............................................................. (376,690) (88,568)
----------- -----------
Net cash used in investing activities ...................................................... (15,393,970) (11,049,567)
Cash flows from financing activities:
Increase in other borrowings..................................................................... 964,500 1,000,000
Purchase of treasury stock....................................................................... (657,700) (1,081,805)
Increase in deposits ............................................................................ 16,452,253 13,664,546
----------- -----------
Net cash provided by financing activities .................................................. 16,759,053 13,582,741
----------- -----------
Net increase in cash and cash equivalents............................................................ 1,625,390 2,684,544
Cash and cash equivalents, beginning of period ...................................................... 3,047,377 1,433,182
----------- -----------
Cash and cash equivalents, end of period ............................................................ $ 4,672,767 $ 4,117,726
=========== ===========
</TABLE>
See notes to the consolidated financial statements.
-5-
<PAGE>
CNB HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 2000
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements for CNB
Holdings, Inc. (the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions for Form 10-QSB. Accordingly, they do not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for a fair
presentation have been included. Operating results for the nine and three month
periods ended September 30, 2000 are not necessarily indicative of the results
that may be expected for the year ended December 31, 2000. For further
information, refer to the financial statements and footnotes included in the
Company's consolidated financial statements and footnotes thereto for the year
ended December 31, 1999, included in the Company's Form 10-KSB.
The consolidated financial statements include the account of the Company and its
wholly owned subsidiary, Chattahoochee National Bank (the "Bank"), with all
significant intercompany accounts and transactions eliminated in consolidation.
NOTE 2 - EARNINGS (LOSS) PER COMMON SHARE
Earnings (loss) per share is computed by dividing net income or (loss)
available to common shareholders by the weighted average number of share
outstanding during the period, which totaled 1,040,094 shares for the nine
months and 1,016,364 for the three months ended September 30, 2000. There were
no potentially dilutive common shares at September 30, 2000.
NOTE 3 - LOANS AND LEASES RECEIVABLE
Major classifications of loans and leases are as follows in thousands
(000):
<TABLE>
<CAPTION>
SEPTEMBER 30, 2000 DECEMBER 31, 1999
------------------ -----------------
<S> <C> <C>
Commercial Loans $17,687 $14,252
Real Estate -- construction 3,077 4,464
Real Estate -- mortgage 6,546 3,895
Leasing financing 3,763 3,215
Installment Loans 8,074 1,097
------- -------
Total Loans 39,147 26,923
Less: Deferred loan fees and costs 44 25
Less: Allowance for loans and lease losses 517 405
------- -------
Loans and leases receivable, net $38,586 $26,493
======= =======
</TABLE>
NOTE 4 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Accumulated other comprehensive income (loss)-market valuation reserve on
investment securities available-for-sale is as follows
Beginning balance - January 1, 2000 $(85,742)
Current - period change 51,677
--------
Ending balance - September 30, 2000 $(34,065)
========
-6-
<PAGE>
NOTE 5 - NEW ACCOUNTING PRONOUNCEMENTS
ACCOUNTING PRONOUNCEMENTS AFFECTING FUTURE PERIODS
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 133 (SFAS 133) "Accounting for Derivative Instruments
and Hedging Activities." SFAS 133 is effective for fiscal years beginning after
June 15, 2000. Under SFAS 133, a company will recognize all free-standing
derivative instruments in the statement of financial position as either assets
or liabilities and will measure them at fair value. The difference between a
derivative's previous carrying amount and its fair value shall be reported as a
transition adjustment presented in net income or other comprehensive income, as
appropriate, in a manner similar to the cumulative effect of a change in
accounting principle. This statement also determines the accounting for the
changes in fair value of a derivative, depending on the intended use of the
derivative and resulting designation. The adoption of SFAS 133 is not expected
to have a significant impact on the consolidated financial condition or results
of operations of the Company.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain of the statements made in this Report, including matters discussed
under the caption "Management's Discussion and Analysis of Financial Condition
and Results of Operations," as well as oral statements made by CNB Holdings,
Inc. (the "Company") or its officers, directors or employees, may constitute
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. Such forward-looking statements are based on
management's beliefs, current expectations, estimates and projections about the
financial services industry, the economy and about the Company and the Bank, in
general. The words "expect," "anticipate," "intend," "plan," "believe," "seek,"
"estimate" and similar expressions are intended to identify such forward-looking
statements. Such forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties and other factors that may
cause the actual results, performance or achievements of the Company to differ
materially from any results expressed or implied by such forward-looking
statements. Such factors include, without limitation, (i) increased competition
with other financial institutions, (ii) lack of sustained growth in the
economies in the Bank's primary service areas, (iii) rapid fluctuations in
interest rates, (iv) the inability of the Bank to maintain regulatory capital
standards, (v) changes in the legislative and regulatory environment, and (vi)
problems associated with the Year 2000. Many of such factors are beyond the
Company's ability to control or predict, and readers are cautioned not to put
undue reliance on such forward-looking statements contained in this Report,
whether as a result of new information, future events or otherwise. By making
these forward-looking statements, the Company does not undertake to update them
in any manner except as may be required by its disclosure obligations in filings
it makes with the Commission under the Federal securities laws.
-7-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The Company was incorporated in Georgia on November 5, 1997 to become a
bank holding company and to own and control all of the outstanding shares of the
Bank. In a private offering and a separate public offering conducted during
1998, the Company sold and issued an aggregate of 1,235,000 shares of common
stock, par value $1.00 per share (the "Common Stock"), at $10.00 per share.
Proceeds from these stock offerings amounted to an aggregate of $11,103,625, net
of selling expenses and repayment of the organizers' expense. The Company
purchased 100% of the Bank's common stock by injecting approximately $9.6
million into the Bank's capital accounts immediately prior to the Bank's opening
on July 27, 1998.
FINANCIAL CONDITION
Management continuously monitors the financial condition of the Bank in
order to protect depositors, increase retained earnings and protect current and
future earnings. Further discussion of significant items affecting the Bank's
financial condition are discussed in detail below.
Total assets increased from $38,346,272 on December 31, 1999 to $55,538,443
on September 30, 2000, an increase of $17,921,171. This increase was due to an
increase in loans of $12,093,387, a $2,988,851 increase in securities available
for sale, a $1,256,419 increase in federal funds and a $16,452,253 increase in
deposits. Increased marketing efforts were largely responsible for this deposit
increase.
The $16,452,253 increase in deposits came from an increase of $1,511,870 in
non-interest bearing demand, an increase of $5,282,131 in time deposits of
$100,000 or more and an increase of $12,285,840 in other time deposits.
Interest-bearing demand and money market deposits decreased $2,641,093.
Allowance for Loan Losses
The allowance for loan losses as of September 30, 2000 was $517,000
compared to $357,000 as of December 31, 1999. The allowance for loan losses, as
a percentage of total gross loans, for September 30, 2000 was 1.32%, compared to
1.51% as of December 31, 1999. The increase in the allowance was prompted by
risks inherent in the loan portfolio. During the first and third quarter of
2000, reviews of the Bank's loan portfolio by an independent firm were
conducted. The purpose of these reviews was to assess the risk in the loan
portfolio and to determine the adequacy of the allowance for loan losses. The
reviews included analyses of historical performance, the level of non-conforming
and rated loans, loan volume and activity, review of loan files and
consideration of economic conditions and other pertinent information. Upon
completion and review by the Bank's Board of Directors and management, the Bank
approved the firm's reports. The Bank will continue engaging, on a biannual
basis, an independent firm to review the Bank's loan portfolio. In addition to
the independent reviews, the Bank's primary regulator, the OCC, also conducts an
annual examination of the loan portfolio. Upon completion, the OCC presents its
report of findings to the Bank's Board of Directors and management. Information
provided from the above two independent sources, together with information
provided by the management and other information known to the Bank's Board of
Directors, are utilized by the Board of Directors to monitor, on a quarterly
basis, the loan portfolio. Specifically, the Bank's Board of Directors attempts
to identify risks inherent in the loan portfolio (e.g., problem loans, potential
problem loans and loans to be charged off), assess the overall quality and
collectibility of the loan portfolio, and determine amounts of the allowance for
loan losses and the provision for loan losses to be reported based on the
results of their review.
Management considers the allowance for loan losses to be adequate and
sufficient to absorb future losses; however, there can be no assurance that
charge-offs in future periods will not exceed the allowance for loan losses or
that additional provisions of the allowance will not be required.
-8-
<PAGE>
Liquidity and Sources of Capital
Liquidity is the Company's ability to meet all deposit withdrawals
immediately, while also providing for the credit needs of customers. The
September 30, 2000 financial statements evidence a satisfactory liquidity
position as total cash and cash equivalents amounted to approximately
$4,672,767, representing 8.41% of total assets. Securities amounted to
$10,519,702, representing 18.94% of total assets; these securities provide a
secondary source of liquidity since they can be converted into cash in a timely
manner. The Company's ability to maintain and expand its deposit base and
borrowing capabilities are a source of liquidity. For the nine-month period
ended September 30, 2000, total deposits increased $16,452,253 as a result of
increased marketing efforts. Additionally, the Company has offered secure
repurchase accounts to its customers totalling $914,500. The Company's
management closely monitors and maintains appropriate levels of interest earning
assets and interest bearing liabilities so that maturities of assets are such
that adequate funds are provided to meet customer withdrawals and loan demand.
Management is not aware of any trends, demands, commitments, events or
uncertainties that will result in, or are reasonably likely to result in, the
Company's liquidity increasing or decreasing in any material way.
During 1999, the Company initiated three share repurchase programs. In May
2000, the Company approved a fourth repurchase program. Pursuant to the
programs, the Company repurchased a total of 225,103 shares of its common stock
for an average per share price of $8.41. Management believes that the repurchase
programs were a prudent use of excess liquidity that will further enhance
shareholder value.
This table below illustrates the Company's regulatory capital ratios at the
date indicated:
<TABLE>
<CAPTION>
MINIMUM
REGULATORY
SEPTEMBER 30, 2000 REQUIREMENT
------------------ -----------
<S> <C> <C>
Tier 1 Capital 22.14% 4.0%
Tier 2 Capital 1.25 --
----- ---
Total risk-based capital ratio 23.39% 8.0%
===== ===
Leverage ratio 16.28% 3.0%
===== ===
</TABLE>
RESULTS OF OPERATIONS
Nine-Month Period Ended September 30, 2000
Net loss for the nine-month period ended September 30, 2000 amounted to
$10,485, or $.01 per diluted share. The following is a brief discussion of the
more significant components of net loss during this period:
a. Net interest income represents the difference between interest received
on interest earning assets and interest paid on interest bearing
liabilities. The following presents, in a tabular form, the main
components of interest earning assets and interest bearing liabilities.
-9-
<PAGE>
<TABLE>
<CAPTION>
September 30, 2000
------------------
Interest Interest Annualized
Earning Assets/ Average Income/ Yield/
Bearing Liabilities Balance Cost Cost
------------------- ----------- --------- ----------
<S> <C> <C> <C>
Federal funds sold $ 2,420,080 $ 105,320 5.80%
Securities 8,633,140 393,141 6.07%
Loans 32,753,882 2,709,933 11.03%
----------- ----------
Total $43,807,102 $3,208,394 9.76%
=========== ==========
Deposits $34,299,928 $1,335,558 5.19%
Other borrowings 2,467,263 101,365 5.48%
----------- ----------
Total $36,767,191 $1,436,923 5.21%
=========== ---------- -----
Net interest income $1,771,471 4.55%
========== =====
Net yield on earning assets 5.39%
=====
September 30, 1999
------------------
Interest Interest Annualized
Earning Assets/ Average Income/ Yield/
Bearing Liabilities Balance Cost Cost
------------------- ----------- --------- ----------
Federal funds sold $ 2,654,560 $ 99,017 4.98%
Securities 6,434,538 252,124 5.22%
Loans 18,526,293 1,401,001 10.08%
----------- ---------- -----
Total $27,615,391 $1,752,142 8.46%
===========
Deposits $19,181,153 $ 608,675 4.23%
=========== ---------- -----
Net interest income $1,143,467 4.23%
========== =====
Net yield on earning assets 5.52%
=====
</TABLE>
b. Total other income for the nine-month period ended September 30, 2000
amounted to $225,684 compared to $288,405 for 1999. On an annualized
basis, this represents 0.61% of total assets. The Bank sold loans and
leases totaling $2,198,441 without recourse compared with $2,475,684 in
1999. The profit from these sales was $151,157 or 66.98% of total other
income compared with $105,078 and 36.43% for 1999. The service charge on
deposit accounts is relatively low, at $28,061 or 12.43% of total other
income compared with $28,112 or 9.75% for 1999. In order to attract new
banking relationships, the Bank's fee structure and charges are low when
compared to other banks. Of the $46,466 of other income or 20.59% of
total other income, $37,193 or 80.04% consists of mortgage origination
and fee income from mortgage loans, which are not added to the Bank's
loan portfolio. For 1999, of the $154,912 in other income, or 53.71% of
total other income,
-10-
<PAGE>
$109,657 related to this mortgage origination activity. Increased
mortgage rates have decreased mortgage loan activity during 2000.
c. Operating expenses for the nine-month period ended September 30, 2000
amounted to $1,895,640 compared to $1,425,247 for 1999. The largest
expense being related to salaries and employee benefits and professional
and outside services. On an annualized basis, this represents 4.55% of
total assets compared with 5.21% in 1999.
d. The Company has recorded no provision for income taxes due to
accumulated deficits incurred to date.
Three-Month Period Ended September 30, 2000
Net income for the three-month period ended September 30, 2000 amounted to
$22,840 compared to $28,387, or $.02 per diluted share for each period. The
following is a brief discussion of the more significant components of net income
during this period:
a. Net interest income represents the difference between interest received
on interest earning assets and interest paid on interest bearing
liabilities. The following presents, in a tabular form, the main
components of interest earning assets and interest bearing liabilities.
<TABLE>
<CAPTION>
September 30, 2000
------------------
Interest Interest Annualized
Earning Assets/ Average Income/ Yield/
Bearing Liabilities Balance Cost Cost
------------------- ----------- --------- ----------
<S> <C> <C> <C>
Federal funds sold $ 2,385,542 $ 34,155 5.73%
Securities 9,622,456 143,708 5.97%
Loans 36,317,749 1,022,323 11.26%
----------- ----------
Total $48,325,747 $1,200,186 9.93%
===========
Deposits $38,996,552 $ 558,085 5.72%
Other borrowings 2,277,525 36,982 6.50%
----------- ----------
Total $41,274,077 $ 595,067 5.77%
=========== ---------- -----
Net interest income $ 605,119 4.16%
========== =====
Net yield on earning assets 5.01%
=====
September 30, 1999
------------------
Interest Interest Annualized
Earning Assets/ Average Income/ Yield/
Bearing Liabilities Balance Cost Cost
------------------- ----------- ---------- ----------
Federal funds sold $ 3,731,543 $ 49,075 5.26%
Securities 6,965,446 92,736 5.33%
Loans 21,373,232 573,401 10.73%
----------- -------- -----
Total $32,070,221 $715,212 8.92%
===========
Deposits $23,705,206 $266,404 4.50%
=========== -------- -----
Net interest income $448,808 4.42%
======== =====
Net yield on earning assets 5.60%
=====
</TABLE>
-11-
<PAGE>
b. Total other income for three-month period ended September 30, 2000
amounted to $110,962 compared with $106,815 for 1999. On an annualized
basis, this represents 0.27% of total assets compared with 1.17% for
1999. The Bank sold loans and leases totaling $1,572,743 without
recourse compared to $995,230 in 1999. The profit in 2000 from these
sales was $83,705 or 75.44% of total other income compared with $47,425
or 44.40% for 1999. The service charge on deposit accounts was $10,530
or 9.49% of total other income compared with $9,609 or 9.00 for 1999.
This figure is relatively low because, in order to attract new banking
relationships, the Bank's fee structure and charges are low when
compared to other banks. Other income was $12,781 or 11.52% of total
other income compared to $49,781 or 46.60% of total other income for
1999. The majority of other income is related to mortgage origination
activities. Increased mortgage rates have decreased mortgage loan
activity during 2000, resulting in decreased mortgage origination
income.
c. Operating expenses for the three-month period ended September 30, 2000
amounted to $667,241 compared to $473,236 in 1999, with the largest
expense being related to salaries and employee benefits and professional
and outside services. On an annualized basis, this represents 4.81% of
total assets compared with 5.19% of total assets in 1999.
-12-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. The following exhibits are filed with this Report:
Exhibit No. Description
------------ -----------
27 Financial Data Schedule (for Commission use only).
(b) Reports on Form 8-K. None
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934 as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Date: November 13, 2000 By: /s/ H. N. Padget, Jr.
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H. N. Padget, Jr., President and
Chief Executive Officer
(principal executive officer)
Date: November 13, 2000 By: /s/ Danny F. Dukes
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Danny F. Dukes, Senior Vice President, Chief
Financial Officer
(principal financial and accounting officer)
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