|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previous: WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND INC, 497, 2000-11-14 |
Next: LAMAR CAPITAL CORP, 10-Q, EX-27, 2000-11-14 |
For the quarterly period ended September 30, 2000 Commission file number: 000-25145
LAMAR CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Mississippi 64-0733976
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification Number)
Registrant's telephone number, including area code: 601-794-6047
NOT APPLICABLE
(name, address and fiscal year, if changed since last report)
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 (2) 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 registrant's classes of common stock, as of the
latest practicable date.
Class Outstanding as of November 10, 2000
Common stock ($.50 par value) 4,307,207 shares
PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements and Supplementary Data
Consolidated Balance Sheets -
September 30, 2000 (Unaudited) and December 31, 1999 4
Consolidated Statements of Income and Comprehensive
Income (Unaudited) -
Three Months Ended September 30, 2000 and 1999 and
Nine Months Ended September 30, 2000 and 1999 6
Consolidated Statements of Changes in Stockholders' Equity
Nine Months Ended September 30, 2000 (Unaudited) and year
ended December 31,1999 7
Consolidated Statements of Cash Flows (Unaudited) -
Nine Months Ended September 30, 2000 and 1999 8
Notes to Consolidated Financial Statements (Unaudited) 9
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk 14
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 16
ITEM 6. Exhibits and Reports on Form 8-K 17
SIGNATURES 18
In addition to historical information, this report contains statements which constitute forward-looking statementsand information which are based on management's beliefs, plans, expectations and assumptions and on information currently available to management. The words "may," "should," "expect," "anticipate," "intend," "plan," "continue," "believe," "seek," "estimate," and similar expressions used in this report that do not relate to historical facts are intended to identify forward-looking statements. These statements appear in a number of places in this report, including, but not limited to,statements found in Item 2 "Management's Discussion and Analysis." All phases of the Company's operations are subject to a number of risks and uncertainties. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projects in the forward-looking statements. Among the factors that could cause actual results to differ materially are the risks and uncertainties discussed in this report, including, without limitation, the portions referenced above, and the uncertainties set forth from time to time in the Company's other public reports and filings and public statements, many of which are beyond the control of the Company, and any of which, or a combination of which, could materially affect the results of the Company's operations and whether forward-looking statements made by the Company ultimately prove to be accurate.
ITEM 1. FINANCIAL STATEMENTS
LAMAR CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
SEPTEMBER 30, DECEMBER 31,
2000 1999
----------- --------------
(UNAUDITED)
ASSETS
Cash and due from banks $ 13,999 $14,195
Federal funds sold 6,890 17,680
---------- ----------
Cash and cash equivalents 20,889 31,875
Securities available for sale (amortized cost -
$100,250 in 2000 and $98,438 in 1999) 95,445 91,848
Securities held to maturity (fair value -
$43,926 in 2000 and $32,861 in 1999) 44,572 34,211
Loans:
Real Estate:
Residential 73,046 73,121
Construction 6,619 10,743
Commercial 36,334 34,559
Consumer 59,564 69,542
Commercial 52,740 49,554
---------- ----------
228,303 237,519
Unearned income (1,448) (2,116)
Allowance for loan losses (4,458) (4,270)
---------- ----------
Net loans 222,397 231,133
Accrued interest receivable 3,488 3,901
Premises and equipment 11,303 10,450
Federal Home Loan Bank stock 3,830 3,596
Other assets 5,393 5,736
---------- ----------
Total assets $ 407,317 $ 412,750
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Non-interest bearing $ 32,339 $ 33,637
Interest bearing:
Demand 81,892 84,875
Savings 10,003 9,448
Time deposits less than $100,000 126,923 126,123
Time deposits more than $100,000 48,945 54,381
---------- ----------
Total deposits 300,102 308,464
Interest payable 1,155 947
Other liabilities 866 1,437
Other borrowed funds 70,000 70,000
---------- ----------
Total liabilities 372,123 380,848
STOCKHOLDERS' EQUITY
Common stock, $ .50 par value, 50,000,000 2,158 2,158
shares authorized, 4,314,707 shares
issued and outstanding at September 30, 2000
and 4,315,707 shares issued and outstanding
at December 31, 1999
Treasury stock, 1,000 shares and none at September (8) --
30, 2000 and December 31, 2000, respectively
Paid-in capital 17,513 17,513
Retained earnings 18,543 16,364
Accumulated other comprehensive loss (3,012) (4,133)
---------- ----------
Total stockholders' equity 35,194 31,902
---------- ----------
Total liabilities and stockholders'
equity $ 407,317 $ 412,750
========== ==========
See accompanying notes.
LAMAR CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
---- ---- ---- ----
Interest income:
Loans, including fees $ 5,684 $ 5,622 $ 17,007 $ 16,118
Federal funds sold 106 118 331 314
Interest on securities:
Taxable 1,778 1,590 5,354 4,478
Non-taxable 422 443 1,282 1,309
-------- -------- -------- --------
2,200 2,033 6,636 5,787
-------- -------- -------- --------
Total interest income 7,990 7,773 23,974 22,219
Interest expense:
Deposits 3,751 3,503 10,928 10,294
Other borrowed funds 894 825 2,668 2,087
-------- -------- -------- --------
Total interest expense 4,645 4,328 13,596 12,381
-------- -------- -------- --------
Net interest income 3,345 3,445 10,378 9,838
Provision for loan losses 431 415 1,098 804
Net interest income after -------- ------- -------- --------
provision for loan losses 2,914 3,030 9,280 9,034
Other income:
Service charges on deposit
accounts 593 577 1,714 1,533
Gain on sale of securities
available for sale -- -- -- 6
Other fees and operating income 423 364 1,053 1,087
-------- -------- -------- --------
Total other income 1,016 941 2,767 2,626
Other expense:
Salaries and employee benefits 1,516 1,446 4,450 4,090
Occupancy expense 216 188 663 534
Furniture and equipment expense 314 306 880 836
Other operating expense 783 692 2,276 1,934
-------- -------- -------- --------
Total other expense 2,829 2,632 8,269 7,394
-------- -------- -------- --------
Income before income taxes 1,101 1,339 3,778 4,266
Income tax expense 244 355 951 1,130
-------- -------- -------- --------
Net income 857 984 2,827 3,136
Other comprehensive income (loss),
net of income taxes:
Change in unrealized gain (loss)
on securities available for sale 657 (677) 1,121 (2,964)
Reclassification of realized amount -- -- -- (4)
-------- -------- -------- --------
Net unrealized gain (loss)
recognized in comprehensive
income 657 (677) 1,121 (2,968)
-------- -------- -------- --------
Comprehensive income $ 1,514 $ 307 $ 3,948 $ 168
======== ======== ======== ========
Earnings per share - basic and
dilutive $ .20 $ .23 $ .66 $ .73
======== ======== ======== ========
Weighted average shares outstanding -
basic and dilutive 4,315 4,316 4,316 4,308
======== ======== ======== ========
See accompanying notes
LAMAR CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)
ACCUMULATED
OTHER TOTAL
COMMON STOCK PAID-IN RETAINED COMPREHENSIVE TREASURY STOCK STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS INCOME (LOSS) SHARES AMOUNT EQUITY
---------------- ------- -------- ------------- -------------------- -------------
Balance at
December 31, 1998 4,130,707 $2,065 $15,885 $12,970 $411 -- $ -- $31,331
Net income for 1999 4,171 4,171
Dividend ($.18 per share) (777) (777)
Sale of common stock 185,000 93 1,628 1,721
Change in unrealized
gain (loss), net
of income taxes,
on securities
available for sale (4,544) (4,544)
--------- ----- ------ ------ ------- ------- ------ -------
Balance at
December 31, 1999 4,315,707 2,158 17,513 16,364 (4,133) -- -- 31,902
Net income for
nine months ended
September 30, 2000 2,827 2,827
Dividend ($.15 per share) (648) (648)
Purchases of treasury stock (1,000) 1,000 (8) (8)
Change in unrealized
gain (loss), net
of income taxes,
on securities
available for sale 1,121 1,121
Balance at
September 30, 2000 --------- ------- ------- ------- -------- ----- ----- ---------
(Unaudited) 4,314,707 $2,158 $17,513 $18,543 $(3,012) 1,000 $(8) $ 35,194
========= ======= ======= ======= ======== ===== ===== =========
See accompanying notes.
LAMAR CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
------------------
2000 1999
------ -------
Operating activities
Net income $ 2,827 $ 3,136
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 1,098 804
Provision for losses on other real estate 32 16
Depreciation and amortization expense 722 690
Amortization of securities premiums 117 160
Accretion of securities discounts (301) (36)
Gain on sale of securities available for sale - (6)
Loss of sales of other real estate 14 6
(Increase) decrease in interest receivable 413 (446)
Increase in interest payable 208 217
(Increase) decrease in other assets (89) (182)
Increase (decrease) in other liabilities (571) 314
-------- -------
Net cash provided by operating activities 4,470 4,673
Investing activities
Securities held to maturity:
Proceeds from calls, maturities, and
principal reductions 5,083 1,300
Purchase of securities (16,062) (2,465)
Securities available for sale:
Proceeds from calls, maturities,
and principal reductions 13,338 3,325
Proceeds from sales of securities 1,500 10,498
Purchases of securities (15,848) (56,896)
Purchase of Federal Home Loan Bank stock (234) (2,712)
Net (increase) decrease in loans 6,620 (31,915)
Proceeds from sales of other real estate 740 312
Purchases of premises and equipment (1,575) (1,614)
----------- -----------
Net cash used in investing activities (6,438) (80,167)
Financing activities
Net increase (decrease) in deposits (8,362) 19,405
Borrowings from banks - 70,000
Payments on notes payable to banks - (15,000)
Purchases of treasury stock (8) -
Proceeds from sale of common stock - 1,721
Dividends paid (648) (469)
----------- -----------
Net cash provided by (used in) financing activities (9,018) 75,657
----------- -----------
Net increase (decrease) in cash and
cash equivalents (10,986) 163
Cash and cash equivalents at beginning of period 31,875 26,438
----------- -----------
Cash and cash equivalents at end of period $ 20,889 $26,601
----------- -----------
See accompanying notes.
The consolidated balance sheet at December 31, 1999 and consolidated statement of stockholders' equity for the year ended December 31, 1999 have been derived from the audited financial statements at that date. The accompanying unaudited consolidated financial statements include the accounts of Lamar Capital Corporation and subsidiaries. Intercompany profits, transactions and balances have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. 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 only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for interim periods are not necessarily indicative of the results that may be expected for the entire year. For further information, refer to the consolidated financial statements and notes thereto of Lamar Capital Corporation's 1999 Annual Report to Shareholders.
SECURITIES PORTFOLIOSIn accordance with FAS No. 115 "Accounting for Certain Investment in Debt and Equity Securities", as of September 30, 2000 the securities in the "Available for Sale" category included $4.8 million in unrealized losses. Accordingly, total securities and total stockholders' equity were decreased by $4.8 million and $3.0 million (net of taxes), respectively, at September 30, 2000 to reflect the adjustment of the securities portfolio to market.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIALFor the nine month period ended September 30, 2000, the Company's net income was $2,827,000 compared to $3,136,000 for the same period in 1999. Basic and diluted earnings per share was $0.66 in 2000 as compared to $.73 in 1999. The decrease in net income resulted primarily from an increase in the provision for loan losses and non-interest expenses offset by a slight increase in net interest income.
Total assets decreased $5.4 million from December 31, 1999 to $407.3 million at September 30, 2000. There was a decrease of $11.0 million in cash and cash equivalents and a decrease in net loans of $8.7 million that was offset by a $4.2 million increase in investment securities.
For quarter ended September 30, 2000, the Company's net income was $857,000 as compared to $984,000 for the same quarter in 1999. Basic and diluted earnings per share was $.020 in 2000 as compared to $0.23 for the same quarter in 1999. This decrease is primarily due to increases in non-interest expenses and a decline in net interest income.
RESULTS OF OPERATIONSNet interest income is income produced by interest earning assets reduced by the interest expense associated with the funding of those assets. Changes in the mix of these interest-earning assets and interest-bearing liabilities and their yields and rates contribute to the levels of net interest income realized and have an impact on earnings.
During the nine month period ended September 30, 2000, net interest income increased 2.7% over the comparable period in 1999. The increase in 2000 is attributable to an increase in the Company's average interest-earning assets of 6.1%, primarily in the loan and investment securities portfolios. Interest-bearing liabilities increased 7.3% for the same periods primarily from increases in other borrowed funds and time deposits.
The Company's net interest margin was 3.65% for the nine month period ended September 30, 2000 compared to 3.67% for the same period in 1999. The decrease in net interest margin resulted from slightly larger increases in the Company's average interest-bearing liabilities over its interest-earning assets. An increase in yield on interest-earning assets of .14% was offset by an increase in the cost of interest-bearing liabilities of .12%. The net interest margin may be affected by the interest rate environment and changes in the earning asset mix and deposit fund mix.
During the quarter ended September 30, 2000, net interest income decreased 3.8% over the comparable period in 1999. The decrease in 2000 is attributable primarily to an increase in the Company's cost of average interest-bearing liabilities. The Company's average interest-earning assets increased by 1.3%, primarily in the investment securities portfolios. Interest-bearing liabilities increased 1.3% for the same periods, primarily from increases in other borrowed funds and time deposits.
The Company's net interest margin was 3.56% for the quarter ended September 30, 2000 compared to 3.71% for the same period in 1999. The decrease in net interest margin resulted from an increase in the cost of interest-bearing liabilities of . 32% partially offset by an increase in yield on interest-earning assets of .12%.
ALLOWANCE AND PROVISION FOR LOAN LOSSESThe allowance for loan losses is regularly evaluated by management and approved by the Board of Directors and is maintained at a level believed to be adequate to absorb future loan losses in the Company's portfolio. The provision for loan losses is determined in part using an internal watch list developed by a review of essentially all loans by management.
The Company's allowance for loan losses increased $188,000 to $4.5 million at September 30, 2000 from $4.3 million at December 31, 1999. The Company's allowance for loan losses to total loans increased from 1.8% at December 31, 1999 to 2.0% at September 30, 2000.
NON-INTEREST INCOMEFor the nine month period ended September 30, 2000, non-interest income was $2.8 million compared to $2.6 million for the same period in 1999, an increase of 5.4%. This increase was primarily due to increases in service charges on deposit accounts.
For the quarter ended September 30, 2000, non-interest income was $1.0 million compared to $941,000 for the same period in 1999, an increase of 8.0%. This increase was primarily due to the increases in service charges on deposit accounts.
NON-INTEREST EXPENSEFor the nine month period ended September 30, 2000, non-interest expense was $8.3 million compared to $7.4 million for the same period in 1999, a 11.8% increase. This increase is primarily attributable to the staffing and operations of two new banking branches. Non-interest expense levels are often measured using an effeciency ratio. The effeciency ratio measures the level of expense required to generate one dollar of revenue. At September 30, 2000, the Company's efficiency ratio was 62.90% as compared to 59.32% at September 30, 1999.
For the quarter ended September 30, 2000, non-interest expense was $2.8 million compared to $2.6 million for the same quarter in 1999, a 7.5% increase. The increase in non-interest expenses for the quarter ended September 30, 2000 compared to quarter ended September 30, 1999 is primarily attributable to the staffing and operations of two new banking branches. For the quarter ended September 30, 2000, the Company's efficiency ratio was 64.87% as compared to 60.00% for the same quarter in 1999.
FINANCIAL CONDITIONThe Company maintains sufficient liquidity to fund loan demand, deposit withdrawals and debt repayments. Liquidity is managed by retaining sufficient liquid assets in the form of cash and cash equivalents and core deposits to meet such demand. The Company also realizes funding and cash flows from the investment securities portfolio and pay downs from the loan portfolio. In addition, the Company has funds available to address liquidity needs under a line of credit, federal funds lines, the retail deposit market, and additional FHLB borrowings.
The Company's objectives include preserving an adequate liquidity position. Asset/liability management is designed to ensure safety and soundness, maintain liquidity and regulatory capital standards, and achieve an acceptable net interest margin. The Company continues to experience strong loan demand and management continues to monitor interest rate and liquidity risks while implementing appropriate funding and balance sheet strategies.
CAPITALThe Company maintains risk-based capital levels well in excess of the minimum guidelines adopted by the Federal Reserve Board for bank holding companies. The Company's tier 1 capital and total risk-based capital ratios at September 30, 2000 were 15.55% and 16.81%, respectively. This compares to a tier 1 capital ratio of 14.65% and total risk-based capital ratio of 15.90% at December 31, 1999. The Company's leverage ratio was 9.18% at September 30, 2000 compared to 9.55% at December 31, 1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKAsset/liability management control is designed to ensure safety and soundness, maintain liquidity and regulatory capital standards, and achieve acceptable net interest income. Management considers interest rate risk to be the Company's most significant market risk. Interest rate risk is the exposure to adverse changes in the net interest income as a result of market fluctuations in interest rates.
Management regularly monitors interest rate risk in relation to prospective market and business conditions. The Company's Board of Directors sets policy guidelines establishing maximum limits on the Company's interest rate risk exposure. Management monitors and adjusts exposure to interest rate fluctuations as influenced by the Company's loan, investment and deposit portfolios.
The Company uses an earnings simulation model to analyze net interest income sensitivity. Potential changes in market interest rates and their subsequent effect on interest income are then evaluated. The model projects the effect of instantaneous movements in interest rates of 200 basis points. Assumptions based on the historical behavior of the Company’s deposit rates and balances in relation to changes in interest rates are also incorporated into the model. These assumptions are inherently uncertain, and as a result, the model cannot precisely measure net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes, as well as changes in market conditions and the application of various management strategies.
Interest rate risk management focuses on maintaining acceptable net interest income within policy limits approved by the Board of Directors. The Company's Board of Directors monitors and manages interest rate risk to maintain an acceptable level of change to net interest income resulting from market interest rate changes. The Company's interest rate risk policy, as approved by the Board of Directors, is stated in terms of change in net interest income given a 200 basis point immediate and sustained increase or decrease in market interest rates. The current limits approved by the Board of Directors are plus or minus 10% of net interest income for a 200 basis point movement.
No changes from legal proceedings reported in Form 10-K from December 31, 1999.
Exhibit (27) Selected financial data.
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BY: /s/ Robert W. Roseberry
-----------------------------------
ROBERT W. ROSEBERRY
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)
DATE: NOVEMBER 13, 2000
BY: /s/ Donna T. Rutland
------------------------------------
DONNA T. RUTLAND
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL OFFICER AND
PRINCIPAL ACCOUNTING OFFICER)
DATE: NOVEMBER 13, 2000
|
|