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 JUNE 30, 2000
----------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to __________
COMMISSION FILE NUMBER: 000-24203
GB&T BANCSHARES, INC.
---------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
GEORGIA 58-2400756
------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
500 JESSE JEWELL PARKWAY, S.E.
GAINESVILLE, GEORGIA 30501
(Address of principal executive offices)
(770) 532-1212
(Issuer's telephone number)
N/A
---------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
------- ---------
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of July 7, 2000: 2,764,513 shares; $5 par value
<PAGE>
GB&T BANCSHARES, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets - June 30, 2000 (Unaudited)
and December 31, 1999................................................................................1
Consolidated Statements of Income (Unaudited)-
Three and Six Months Ended June 30, 2000 and 1999 ................................................2
Consolidated Statements of Comprehensive Income (Unaudited)-
Three and Six Months Ended June 30, 2000 and 1999.................................................3
Consolidated Statements of Stockholders' Equity (Unaudited)..........................................3
Consolidated Statements of Cash Flows (Unaudited) -
Six Months Ended June 30, 2000 and 1999 ..........................................................4
Notes to Consolidated Financial Statements (Unaudited).............................................5-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................................................8-13
Item 3. Quantitative and Qualitative Disclosures About Market Risk.....................................13
Part Ii. Other Information
Item 1. Legal Proceedings..............................................................................14
Item 2. Changes in Securities..........................................................................14
Item 3. Defaults Upon Senior Securities................................................................14
Item 4. Submission of Matters to a Vote of Security Holders............................................14
Item 5. Other Information..............................................................................14
Item 6. Exhibits and Reports On Form 8-K...............................................................14
Signatures..............................................................................................15
</TABLE>
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GB&T BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2000 AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
(Dollars in Thousands)
2000 1999
--------- ---------
Assets (unaudited)
------
<S> <C> <C>
Cash and due from banks $ 12,420 $ 10,047
Interest-bearing deposits in banks 313 1,511
Federal funds sold 100 2,532
Securities available-for-sale, at fair value 51,482 49,218
Loans 257,241 234,741
Less allowance for loan losses 3,277 2,876
--------- ---------
Loans, Net 253,964 231,865
--------- ---------
Premises and equipment 7,091 6,849
Other assets 6,503 5,927
--------- ---------
TOTAL ASSETS $ 331,873 $ 307,949
========= =========
Liabilities and Stockholders' Equity
------------------------------------
Deposits
Demand $ 34,805 $ 27,336
Interest-bearing demand 56,592 59,128
Savings 7,735 7,825
Time deposits 157,610 146,551
--------- ---------
Total deposits 256,742 240,840
Federal Home Loan Bank Advances 34,128 28,154
Other borrowings 14,873 14,030
Other liabilities 3,661 3,413
--------- ---------
TOTAL LIABILITIES 309,404 286,437
--------- ---------
Stockholders' Equity
Common Stock, par value $5; 10,000,000
shares authorized; 2,764,513 shares and
2,763,651 issued and outstanding, respectively 13,822 13,818
Capital surplus 1,142 1,137
Retained earnings 8,310 7,270
Accumulated other comprehensive
loss, net of tax (805) (713)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 22,469 21,512
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 331,873 $ 307,949
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE>
GB&T BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 2000 AND 1999 AND
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
(In Thousands, except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------ -------------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans 6,089 4,683 11,810 8,834
Taxable securities 701 551 1,379 1,076
Nontaxable securities 75 54 148 92
Federal funds sold 23 70 99 165
Interest-bearing deposits in banks 27 13 36 42
----------- ----------- ----------- -----------
Total interest income 6,915 5,371 13,472 10,209
----------- ----------- ----------- -----------
INTEREST EXPENSE
Deposits 2,847 2,212 5,496 4,398
Other borrowings 712 171 1,346 240
----------- ----------- ----------- -----------
Total interest expense 3,559 2,383 6,842 4,638
----------- ----------- ----------- -----------
NET INTEREST INCOME 3,356 2,988 6,630 5,571
Provision for loan losses 172 165 342 399
----------- ----------- ----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 3,184 2,823 6,288 5,172
----------- ----------- ----------- -----------
OTHER INCOME
Service charges on deposit accounts 345 286 597 519
MORTGAGE ORIGINATION FEES 26 50 58 134
GAIN ON SALE OF LOANS 16 -- 50 34
Loss on sale of securities -- 1 (12) 1
Other operating income 124 132 300 286
----------- ----------- ----------- -----------
TOTAL OTHER INCOME 511 469 993 974
----------- ----------- ----------- -----------
OTHER EXPENSES
Salaries and other employee benefits 1,344 1,191 2,750 2,347
Occupancy expenses 153 146 311 301
Equipment expenses 231 215 447 386
Other operating expenses 675 648 1,477 1,311
----------- ----------- ----------- -----------
TOTAL OTHER EXPENSES 2,403 2,200 4,985 4,345
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 1,292 1,092 2,296 1,801
Income tax expense 431 368 829 589
----------- ----------- ----------- -----------
NET INCOME $ 861 $ 724 $ 1,467 $ 1,212
=========== =========== =========== ===========
Earnings Per Share
Basic $ 0.31 $ 0.26 $ 0.53 $ 0.44
=========== =========== =========== ===========
Diluted $ 0.30 $ 0.25 $ 0.51 $ 0.42
=========== =========== =========== ===========
Weighted Average Shares
Basic 2,764,513 2,754,721 2,764,351 2,752,317
=========== =========== =========== ===========
Diluted 2,852,010 2,909,607 2,861,369 2,908,144
=========== =========== =========== ===========
Cash Dividends Per Common Share $ 0.07 $ 0.06 $ 0.14 $ 0.12
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 2000 AND 1999 AND
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS) THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- -----------------------
2000 1999 2000 1999
----------------------- -----------------------
<S> <C> <C> <C> <C>
Net Income 861 724 1,467 1,212
------- ------- ------- -------
Unrealized gains (losses) on securities
available-for-sale arising during period, net of tax 26 (326) (100) (448)
Reclassification adjustment for losses (gains) realized
in net income, net of tax -- (1) 8 (1)
------- ------- ------- -------
Other comprehensive income (loss) 26 (327) (92) (449)
------- ------- ------- -------
Comprehensive Income $ 887 $ 397 $ 1,375 $ 763
======= ======= ======= =======
</TABLE>
GB&T BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
Accumulated
Other Total
Common Stock Capital Retained Comprehensive Stockholders'
Shares Par Value Surplus Earnings (Loss) Equity
------ --------- ------- -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1999 2,763,651 $ 13,818,255 $ 1,137,117 $ 7,270,006 $ (713,334) $ 21,512,044
Net income 1,466,830 $ 1,466,830
Options excercised 862 4,310 5,060 $ 9,370
Dividends declared
$0.14 per share (427,751) $ (427,751)
Other comprehensive loss (91,636) $ (91,636)
------------ ------------ ------------ ------------ ------------ ------------
Balance, June 30, 2000 2,764,513 $ 13,822,565 $ 1,142,177 $ 8,309,085 $ (804,970) $ 22,468,857
============ ============ ============ ============ ============ ============
</TABLE>
3
<PAGE>
GB&T BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
(Dollars in Thousands)
-------------------------
2000 1999
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 1,467 $ 1,212
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 322 293
Provision for loan losses 342 399
Other operating activities (420) (321)
-------- --------
Net cash provided by operating activities 1,711 1,583
-------- --------
INVESTING ACTIVITIES
Purchases of securities available-for-sale (3,536) (15,867)
Proceeds from maturities of securities available-for-sale 1,272 9,599
Net decrease in interest-bearing deposits in banks 1,198 1,647
Net decrease in Federal funds sold 2,432 8,186
Net increase in loans (22,441) (31,187)
Purchase of premises and equipment (564) (382)
-------- --------
Net cash used in investing activities (21,639) (28,004)
-------- --------
FINANCING ACTIVITIES
Net increase in deposits 15,902 9,182
Net increase in FHLB advances 5,974 9,975
Net increase in other borrowings 843 5,519
Issuance of stock 9 192
Dividends paid (427) (359)
-------- --------
Net cash provided by financing activities 22,301 24,509
-------- --------
Net increase (decrease) in cash and due from banks 2,373 (1,912)
Cash and due from banks at beginning of period 10,047 10,573
-------- --------
Cash and due from banks at end of period $ 12,420 $ 8,661
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
GB&T BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with instructions for Form 10-Q. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal and recurring accruals)
considered necessary for a fair presentation have been included. The results of
operations for the three month and six month periods ended June 30, 2000 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2000. For further information, refer to the consolidated financial
statements and footnotes included in the Company's annual report on Form 10 -
KSB for the year ended December 31, 1999.
Prior period financial information has been restated for a business
combination with UB&T Financial Services Corporation (and its subsidiary,
United Bank & Trust), which was consummated on February 29, 2000 and accounted
for as a pooling of interests in conformity with generally accepted
principles.
NOTE 2. CURRENT ACCOUNTING DEVELOPMENTS
In June of 1998 the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 133, " Accounting for Derivative
Instruments and Hedging Activities." The effective date of this statement has
been deferred by Statement of Financial Accounting Standards (SFAS) No. 137,
until fiscal years beginning after June 15, 2000. However, the statement permits
early adoption as of the beginning of any fiscal quarter after its issuance. The
Company expects to adopt this statement effective January 1, 2001. SFAS No. 133
requires the Company to recognize all derivatives as either assets or
liabilities in the balance sheet at fair value. For derivatives that are not
designated as hedges, the gain or loss must be recognized in earnings in the
period of change. For derivatives that are designated as hedges, changes in the
fair value of the hedged assets, liabilities, or firm commitments must be
recognized in earnings, depending on the nature of the hedge. The ineffective
portion of a derivative's change in fair value must be recognized in earnings
immediately. Management has not yet determined what effect the adoption of SFAS
No. 133 will have on the Company's earnings or financial position.
5
<PAGE>
NOTE 3. EARNINGS PER COMMON SHARE
Presented below is a summary of the components used to calculate basic
and diluted earnings per share for the three months and six months ended June
30, 2000 and 1999.
<TABLE>
<CAPTION>
Quarters ended June 30,
----------------------------
2000 1999
---------- ----------
<S> <C> <C>
Basic Earnings Per Share:
Weighted average common shares outstanding 2,764,513 2,754,721
========== ==========
Net income $ 860,822 $ 724,427
========== ==========
Basic earnings per share $ 0.31 $ 0.26
========== ==========
Diluted Earnings Per Share:
Weighted average common shares outstanding 2,764,513 2,754,721
Net effect of the assumed exercise of stock
options based on the treasury stock method
using average market prices for the period 87,497 154,886
---------- ----------
Total weighted average common shares and
common stock equivalents outstanding 2,852,010 2,909,607
========== ==========
Net income $ 860,822 $ 724,427
========== ==========
Diluted earnings per share $ 0.30 $ 0.25
========== ==========
<CAPTION>
Six Months ended June 30,
----------------------------
2000 1999
---------- ----------
Basic Earnings Per Share:
Weighted average common shares outstanding 2,764,351 2,752,317
========== ==========
Net income $1,466,830 $1,212,137
========== ==========
Basic earnings per share $ 0.53 $ 0.44
========== ==========
Diluted Earnings Per Share:
Weighted average common shares outstanding 2,764,351 2,752,317
Net effect of the assumed exercise of stock
options based on the treasury stock method
using average market prices for the period 97,018 155,827
---------- ----------
Total weighted average common shares and
common stock equivalents outstanding 2,861,369 2,908,144
========== ==========
Net income $1,466,830 $1,212,137
========== ==========
Diluted earnings per share $ 0.51 $ 0.42
========== ==========
</TABLE>
6
<PAGE>
NOTE 4 BUSINESS COMBINATIONS
On February 29, 2000, the Company consummated its merger with UB&T Financial
Services Corporation subject to a definitive agreement dated October 14, 1999.
Under this agreement, UB&T merged with and into the Company. UB&T stockholders
received 646,505 shares of Company Stock. The combination was accounted for as a
pooling of interests.
The following unaudited data summarizes operating data of GB&T Bancshares, Inc.
and UB&T Financial Services Corporation prior to the merger.
For the period ended
February 29, 2000
(Dollars in Thousands)
GB&T UB&T
Bancshares Financial
----------- ---------
Interest income $ 3,543 $ 676
Interest Expense 1,850 291
Other income 211 71
Other expense 1,536 372
Net income 199 58
7
<PAGE>
GB&T BANCSHARES, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected the financial position and operating results of the
Company and its bank subsidiaries, Gainesville Bank & Trust and United Bank &
Trust, during the periods included in the accompanying consolidated financial
statements. On February, 29, 2000, the Company completed its merger with UB&T
Financial Services Corporation ( and its subsidiary, United Bank & Trust). The
transaction was accounted for as a pooling of interests. All prior period
financial information has been restated to reflect the merger.
Forward-Looking Statements
Some of the statements made in this quarterly report (and in other documents to
which we refer) are "forward-looking statements." When used in this document,
the words, "anticipate," "believe," "estimate," and similar expressions
generally identify forward-looking statements. These statements are based on the
beliefs, assumptions, and expectations of the Company's management, and on
information currently available to those members of management. They are
expressions of historical fact, not guarantees of future performance.
Forward-looking statements include information concerning possible or assumed
future results of operations of the Company.
Forward-looking statements involve risks, uncertainties, and assumptions, and
certain factors could cause actual results to differ from results expressed or
implied by the forward-looking statements, including:
1. economic conditions (both generally and in the markets where the
Company operates);
2. competition from other companies that provide financial services
similar to those offered by the Company;
3. government regulation and legislation;
4. changes in interest rates; and
5. unexpected changes in the financial stability and liquidity of the
Company's credit customers.
We believe these forward-looking statements are reasonable. You should not,
however, place undue reliance on these forward-looking statements, because the
future results and stockholder values of the Company may differ materially from
those expressed or implied by these forward-looking statements.
Financial Condition
The Company reported consolidated total assets of approximately $331.9 million
at June 30, 2000 and approximately $307.9 million at December 31, 1999,
representing an increase of $23.9 million or 7.8%. The Company experienced
moderate growth in total assets, loans and deposits during the six months ended
June 30, 2000. Total loans increased by $22.5 million for the six months ended
June 30, 2000. Total deposits increased $15.9 million for the six months ended
June 30, 2000. The loan to deposit ratio as of June 30, 2000 was approximately
100% up from 97% at year end, reflecting continued strong loan demand. To help
8
<PAGE>
meet the loan demand the Company obtained advances from The Federal Home Loan
Bank in the amount of $6 million. The Company continues to face increasing
competitive pressures in its growing deposit market.
Liquidity and Capital Resources
Liquidity management involves the matching of the cash flow requirements of
customers who may be either depositors desiring to withdraw funds or borrowers
needing assurance that sufficient funds will be available to meet their credit
needs and the ability of the Company to meet those needs. The Company seeks to
meet liquidity requirements primarily through management of short-term
investments, monthly amortizing loans, maturing single payment loans, and
maturities of securities and prepayments. Also the Company maintains
relationships with correspondent banks which could provide funds on short
notice. As of June 30, 2000, the Company had borrowed under Federal funds
purchase lines and securities sold under agreement to repurchase $14.0 million
compared to $14.0 million at December 31, 1999.
The liquidity and capital resources of the Company are monitored on a periodic
basis by management and State and Federal regulatory authorities. Management
reviews liquidity on a periodic basis to monitor and adjust liquidity as
necessary. Management has the ability to adjust liquidity by selling securities
available for sale, selling participations in loans generated by the Company and
accessing available funds through various borrowing arrangements. The Company's
short-term investments and available borrowing arrangements are adequate to
cover any reasonably anticipated immediate need for funds. The Company is not
aware of any events or trends likely to result in a material change in
liquidity.
The Company's liquidity ratio was 16.75% at June 30, 2000, slightly below
industry standards. Liquidity is measured by the ratio of net cash, Federal
funds sold and securities to net deposits and short-term liabilities. In the
event the banks need to generate additional liquidity funding plans would be
implemented as outlined in the liquidity policy of the banks. The subsidiary
banks have lines of credit available to meet any unforeseen liquidity needs.
Also, the Banks have a relationship with the Federal Home Loan Bank of Atlanta,
which provides funding for loan growth on an as needed basis.
As of June 30, 2000 the capital ratios at the Company and the Banks were
adequate based on regulatory minimum capital requirements. The Company and its
bank subsidiaries' actual capital amounts and ratios are presented in the
following table.
<TABLE>
<CAPTION>
FOR CAPITAL TO BE
ADEQUACY WELL
ACTUAL PURPOSES CAPITALIZED
------ -------- -----------
<S> <C> <C> <C>
As of June 30, 2000
Total Capital to Risk Weighted Assets:
Consolidated 10.25% 8% N\A
Gainesville Bank & Trust 8.70% 8% 10%
United Bank & Trust 15.77% 8% 10%
Tier I Capital to Risk Weighted Assets:
Consolidated 9.00% 4% N\A
Gainesville Bank & Trust 7.56% 4% 6%
United Bank & Trust 14.51% 4% 6%
Tier I Capital to Risk Average Assets:
Consolidated 7.17% 4% N\A
Gainesville Bank & Trust 6.28% 4% 5%
United Bank & Trust 10.57% 4% 5%
</TABLE>
9
<PAGE>
RESULTS OF OPERATIONS
The Company's profitability is determined by its ability to effectively manage
interest income and expense, to minimize loan and security losses, to generate
noninterest income, and to control operating expenses. Since interest rates are
determined by market forces and economic conditions beyond the control of the
Company, the Company's'ability to generate net interest income is dependent upon
its ability to obtain an adequate net interest spread between the rate paid on
interest-bearing liabilities and the rate earned on interest-earning assets. The
net yield on average interest-earning assets was 4.47% for the six months ended
June 30, 2000, compared to 4.91% for the same period in 1999. This 20 basis
point decrease is primarily due to competitive pressures on loan and deposit
pricing and the conclusion of a planned three year aggressive growth plan. In
the first six months of 2000 the yield on earning assets increased to 9.09% from
8.99% while the yield of interest bearing liabilities increased to 5.28% from
4.72%.
Net interest income increased $368,000 or 12.3% for the three months ended June
30, 2000 compared to the same period in 1999. The net increase consists of an
increase in interest income of $1,544,000 or 28.8% less an increase in interest
expense of $1,176,000 or 49.3% for the three month period. The increase in net
interest income is due primarily to growth in total interest-earning assets
during the three month period compared to the same prior year period. Net
interest income increased $1,059,000 or 19% for the six months ended June 30,
2000, compared to the same period in 1999. The net increase consists of an
increase in interest income of $3,263,000 or 32% less an increase in interest
expense of $2,204,000 or 47.5% for the six month period. The increase in net
interest income is due primarily to growth in total interest-earning assets
during the six month period compared to the same prior year period.
The Bank's provision for loan losses decreased by $57,000 or 14.3% during the
six months ended June 30, 2000 as compared to the same period in 1999. The
allowance for loan losses at June 30, 2000 was $3,277,000 or 1.27% of total
loans compared to 1.23% at June 30, 1999. Based on management's evaluation, the
allowance is adequate to absorb any potential loan losses at June 30, 2000.
The decrease in the provision for loan losses for the six month period ended
June 30, 2000 as compared to 1999 is based on a strong economy and a decrease in
net charge-offs. The analysis below indicates a decrease in net charge-offs for
the six months ended June 30, 2000 as compared to the same period in 1999. The
allowance for loan losses is evaluated monthly and adjusted to reflect the risk
in the portfolio.
The following table summarizes the allowance for loan losses for the six month
periods ended June 30, 2000 and 1999.
<TABLE>
<CAPTION>
2000 1999
-------- ---------
(Dollars in Thousands)
----------------------------
<S> <C> <C>
Average amount of loans outstanding $ 238,429 $ 180,683
========= =========
Allowance for loan losses balance, beginning of period $ 2,876 $ 2,132
--------- ---------
Less charge-offs
Commercial loans (1) (26)
Consumer loans (117) (123)
Total Charge-offs (118) 149)
--------- ---------
PLUS RECOVERIES
Commercial loans 136 7
Consumer loans 41 10
--------- ---------
Total recoveries 177 17
--------- ---------
NET (CHARGE-OFFS)RECOVERIES 59 (132)
--------- ---------
PLUS PROVISION FOR LOAN LOSSES 342 399
--------- ---------
ALLOWANCE FOR LOAN LOSSES BALANCE, END OF PERIOD $ 3,277 $ 2,399
========= =========
NET CHARGE-OFFS(RECOVERIES)TO AVERAGE LOANS (.02%) .07%
========= =========
</TABLE>
10
<PAGE>
The following table is a summary of nonaccrual, past due and restructured debt.
The numbers indicate increases of $1,052,000 in nonaccrual loans and increases
of $139,000 in past due loans over 90 days. The increase in nonaccrual was
primarily due to two large loans. The increase in past dues was due primarily to
one large loan. There are minimal or no losses anticipated on the two large
loans in nonaccrual and one large loan in past due loans.
<TABLE>
<CAPTION>
June 30, 2000
----------------------------------------------------------
Past Due
Nonaccural 90 Days Restructured
Loans Still Accruing Debt
---------- -------------- ------------
(Dollars in Thousands)
----------------------------------------------------------
<S> <C> <C> <C>
Real estate loans $1,116 $ 366 $ --
Commercial loans -- -- --
Consumer loans 23 65 --
------ ------ ---------
Total $1,139 $ 431 $ --
====== ====== ===========
</TABLE>
<TABLE>
<CAPTION>
June 30, 1999
-------------------------------------------------------------
Past Due
Nonaccural 90 Days Restructured
Loans Still Accruing Debt
---------- -------------- ------------
(Dollars in Thousands)
------------------------------------------------------------
<S> <C> <C> <C>
Real estate loans $ 29 $ 46 $ --
Commercial loans -- 84 --
Consumer loans 58 162 --
---- --- -----------
Total $ 87 $292 $ --
==== ==== ==========
</TABLE>
The Company's policy is to discontinue the accrual of interest income when, in
the opinion of management, collection of such interest becomes doubtful. This
status is determined when; (1) there is a significant deterioration in the
financial condition of the borrower and full repayment of principal and interest
11
<PAGE>
is not expected; and (2) the principal or interest is more than 90 days past
due, unless the loan is both well-secured and in the process of collection.
Accrual of interest on such loans is resumed when, in management's judgment, the
collection of interest and principal becomes probable.
Loans classified for regulatory purposes as loss, doubtful, substandard, or
special mention that have not been included in the table above do not represent
or result from trends or uncertainties which management reasonably expects will
materially impact future operating results, liquidity or capital resources.
These classified loans do not represent material credits about which management
is aware of any information which causes management to have serious doubts as to
the ability of such borrowers to comply with their loan repayment terms.
Other income for the three months ended June 30, 2000, increased by $42,000 or
9% compared to the same period in 1999. Service charges increased $59,000 and
gain on sale of loans increased by $16,000. These increases in other income were
partially offset by decreases in mortgage origination fees of $24,000. The
decline in mortgage origination fees resulted from a decline in refinancing
activity and increases in interest rates. Other income for the six months ended
June 30, 2000, increased by $19,000 or 2% compared to the same period in 1999.
Service charges increased $78,000, gain on sale of loans increased by $16,000
and other operating income increased by $14,000. These increases in other income
were offset by decreases in mortgage origination fees of $76,000.
Other expenses increased by approximately $203,000 or 9.2% for the three months
ended June 30, 2000 compared to the same period in 1999. The increase is due
primarily to an increase in salaries and employee benefits of $153,000. The
increase in salaries and employee benefits is due to the addition of nine
employees and normal increases in employee benefits. Equipment expenses
increased by $16,000 due to depreciation and maintenance of equipment purchased
for the implementation of check imaging. Other expenses increased by
approximately $640,000 or 14.8% for the six months ended June 30, 2000 compared
to the same period in 1999. The increase is due primarily to an increase in
salaries and employee benefits of $403,000. The increase in salaries and
employee benefits is due to the addition of nine employees and normal increases
in employee benefits. Equipment expenses increased by $61,000 due to
depreciation and maintenance of equipment purchased for the implementation of
check imaging. The remainder of the increase in other expenses includes $205,000
in one-time merger expenses in operating expenses.
Income tax expense increased by $240,000 for the six months ended June 30, 2000
compared to the six months ended June 30, 1999. The effective tax rate for the
six month period was 36%, compared to 33% for the same period in 1999. This
increase reflects non-deductible merger expenses related to the merger of GB&T
Bancshares and UB&T Financial Services Corporation.
Net income increased by $137,000 for the three months ended June 30, 2000
compared to the same period in 1999. The increase in net income is attributable
to growth in interest earning assets. Net income increased by $255,000 for the
six months ended June 30, 2000 compared to the same period in 1999.
The Company is not aware of any other known trends, events or uncertainties,
other than the effect of events as described above, that will have or that are
reasonably likely to have a material effect on its liquidity, capital resources
or operations. The Company is also not aware of any current recommendations by
the regulatory authorities which, if they were implemented, would have such an
effect.
12
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
GB&T Bancshares's net interest income and the fair value of its financial
instruments (interest earning assets and interest bearing liabilities) are
influenced by changes in market interest rates. GB&T actively manages its
exposure to interest rate fluctuations through policies established by its
Asset/Liability Management Committee (the "ALCO"). The ALCO meets regularly and
is responsible for approving asset/liability management policies, developing and
implementing strategies to improve balance sheet positioning and net interest
income and assessing the interest rate sensitivity of the Banks.
13
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a vote of Securities Holders
The annual meeting of the Stockholders of GB&T Bancshares, Inc. was
held on May 8, 2000. The meeting had been called pursuant to written
notice for the purpose of considering and voting upon the election of
ten directors to constitute the Board of Directors to serve until the
next annual meeting and until their successors are elected and
qualified. The results of the voting were as follows:
Election of Directors
For Against Withheld
--- ------- --------
Donald J. Carter 2,072,195 0 2,123
Dr. John W. Darden 2,072,195 0 2,123
Bennie E. Hewett 2,062,195 0 12,123
Richard A. Hunt, Jr 2,072,195 0 2,123
James L. Lester 2,072,195 0 2,123
John E. Mansfield, Sr 2,072,195 0 2,123
F. Abit Massey 2,072,195 0 2,123
Samuel L. Oliver 2,072,195 0 2,123
Alan A. Wayne 2,062,195 0 12,123
Phillip A. Wilheit 2,072,195 0 2,123
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
Initially, the Company filed a current report on Form 8-K on April 18,
2000 regarding consummation of the Acquisition of UB&T Financial
Services Corporation on March 1, 2000. Item 7 of the Form 8-K reported
that the financial statements and pro forma financial information
concerning UB&T Financial Services Corporation and GB&T Bancshares,
Inc. would be filed as soon as practicable in accordance with Item
7(a)(4) of Form 8-K. On May 12, 2000 the Company filed an amendment to
the Form 8-K referred to above to include financial information pro
forma financial information concerning concerning UB&T Financial
Services Corporation and GB&T Bancshares, Inc.
14
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SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GB&T BANCSHARES, INC.
DATE: 8/11/00 BY: /s/ Richard A. Hunt
--------------- -------------------
Richard A. Hunt
President and Chief Executive Officer
DATE: 8/11/00 BY: /s/ Gregory L. Hamby
--------------- --------------------
Gregory L. Hamby
Chief Financial Officer
