SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE) FORM 10-QSB
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
----
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
-----
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM _________TO_________
Commission File Number 000-26905
RHBT FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
South Carolina 58-2482426
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
315 EAST MAIN STREET
ROCK HILL, SC 29731
(Address of principal executive
offices, including zip code)
(803) 324-2500
(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 (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 issuer's classes of
common stock as of the date of this filing.
1,720,938 SHARES OF COMMON STOCK, $.01 PAR VALUE
PAGE 1 OF 16
EXHIBIT INDEX ON PAGE 2
<PAGE>
RHBT FINANCIAL CORPORATION
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page No.
- ------------------------------
Item 1 Financial Statements (Unaudited)
<S> <C> <C>
Condensed Consolidated Balance Sheets - March 31, 2000 and December 31, 1999..........................................3
Condensed Consolidated Statements of Income - Three months ended March 31, 2000 and 1999 .............................4
Condensed Consolidated Statement of Shareholders' Equity
and Comprehensive Income - Three months ended March 31, 2000......................................................5
Condensed Consolidated Statements of Cash Flows - Three months ended March 31, 2000 and 1999..........................6
Notes to Condensed Consolidated Financial Statements..................................................................7
Item 2. Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations.................8-13
PART II. OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K..................................................................................13-14
(a) Exhibits.........................................................................................................16
(b) Reports on Form 8-K..............................................................................................14
</TABLE>
2
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<TABLE>
<CAPTION>
RHBT FINANCIAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, December 31,
2000 1999
------------------- -------------------
<S> <C> <C>
ASSETS
Cash and cash equivalents:
Cash and due from banks $ 2,779,111 $ 3,680,173
Federal funds sold and securities
purchased under agreements to resell 21,785,000 16,425,000
------------------- -------------------
24,564,111 20,105,173
Securities available-for-sale 6,655,458 7,832,559
Loans receivable 133,012,437 118,709,167
Less allowance for loan losses (1,388,946) (1,226,442)
------------------- -------------------
Loans, net 131,623,491 117,482,725
Accrued interest receivable 985,289 825,111
Premises and equipment, net 1,678,406 1,672,998
Other assets 1,273,032 1,529,614
------------------- -------------------
Total assets $ 166,779,787 $ 149,448,180
=================== ===================
LIABILITIES
Deposits:
Non-interest bearing $ 7,973,786 $ 6,555,078
Interest bearing 36,521,351 34,659,500
Savings 4,876,592 4,426,598
Time deposits $100,000 and over 38,506,530 29,434,939
Other time deposits 45,973,202 32,749,958
------------------- -------------------
133,851,461 107,826,073
Securities sold under agreement to repurchase 7,565,000 9,105,000
Federal funds purchased - 5,000,000
Advances from the Federal Home Loan Bank 7,000,000 10,000,000
Accrued interest payable 646,234 483,114
Other liabilities 312,359 120,539
------------------- -------------------
Total liabilities 149,375,054 132,534,726
------------------- -------------------
SHAREHOLDERS' EQUITY
Common stock, $.01 par value; 10,000,000 shares
authorized, 1,720,938 shares issued and outstanding 17,208 17,208
Capital surplus 15,383,930 15,383,930
Retained earnings 2,066,614 1,564,652
Accumulated other comprehensive income (loss) (63,019) (52,336)
------------------- -------------------
Total shareholders' equity 17,404,733 16,913,454
------------------- -------------------
Total liabilities and shareholders' equity $ 166,779,787 $ 149,448,180
=================== ===================
See notes to condensed financial statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
RHBT FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended
March 31,
----------------------------------------
2000 1999
------------------ ------------------
<S> <C> <C>
INTEREST INCOME
Loans, including fees $ 3,068,626 $ 1,708,647
Investment securities, taxable 111,044 104,236
Federal funds sold and securities
purchased under agreements to resell 310,124 256,840
------------------ ------------------
Total 3,489,794 2,069,723
------------------ ------------------
INTEREST EXPENSE
Deposit accounts 1,630,111 934,845
Securities sold under agreements to repurchase 87,370 125,479
Advances from the Federal Home Loan Bank 95,321 -
------------------ ------------------
Total 1,812,802 1,060,324
------------------ ------------------
NET INTEREST INCOME 1,676,992 1,009,399
Provision for loan losses 164,000 81,000
------------------ ------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 1,512,992 928,399
------------------ ------------------
OTHER INCOME
Service charges on deposit accounts 75,859 41,395
Other charges, commissions and fees 47,424 26,743
Income from fiduciary activities 79,446 30,139
------------------ ------------------
Total 202,729 98,277
------------------ ------------------
OTHER EXPENSE
Salaries and employee benefits 363,435 261,227
Occupancy expense 153,149 94,792
Advertising and marketing expense 17,026 27,831
Other operating expenses 384,951 242,453
------------------ ------------------
Total 918,561 626,303
------------------ ------------------
INCOME BEFORE INCOME TAXES 797,160 400,373
Income tax expense 295,198 148,000
------------------ ------------------
NET INCOME $ 501,962 $ 252,373
================== ==================
Basic net income per share $ .29 $ .15
Diluted net income per share .29 .15
See notes to condensed financial statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
RHBT FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(UNAUDITED)
Accumulated
Common Stock Other
------------ Capital Retained Comprehensive
Shares Amount Surplus Earnings Income Total
------ ------ ------- -------- ------ -----
<S> <C> <C> <C> <C> <C> <C>
BALANCE,
DECEMBER 31, 1999 1,720,938 $ 17,208 $ 15,383,930 $ 1,564,652 $ (52,336) $ 16,913,454
Net income
for the period 501,962 501,962
Other comprehensive income,
net of tax of $6,274 (10,683) (10,683)
------------
Comprehensive income 491,279
------------ ------------ ------------- ------------ ------------- ------------
BALANCE,
MARCH 31, 2000 1,720,938 $ 17,208 $ 15,383,930 $ 2,066,614 $ (63,019) $ 17,404,733
============ ============ ============= ============ ============= ============
See notes to condensed financial statements.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
RHBT FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
----------------------------------------
2000 1999
------------------ ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 501,962 $ 252,373
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 61,081 39,412
Provision for loan losses 164,000 81,000
Accretion and premium amortization (201) 8,174
Amortization of net loan fees and costs 13,013 13,138
Amortization of organizational costs 4,758 4,758
(Increase) decrease in interest receivable (160,178) 34,809
Increase in interest payable 163,120 10,986
Decrease in other assets 108,098 17,449
Increase in other liabilities 191,820 32,493
------------------ ------------------
Net cash provided by operating activities 1,047,473 494,592
------------------ ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities available-for-sale (989,655) (3,818,404)
Maturities of securities available-for-sale 2,150,000 3,900,000
Net increase in loans made to customers (14,317,779) (10,356,219)
Purchases of premises and equipment (66,489) (151,102)
(Purchase) sale of Federal Home Loan Bank Stock 150,000 (163,800)
------------------ ------------------
Net cash used by investing activities (13,073,923) (10,589,525)
------------------ ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand deposits, interest
bearing transaction accounts and savings accounts 3,730,553 10,929,973
Net increase in certificates of deposit and other time deposits 22,294,835 6,035,384
Net increase (decrease) in securities sold under agreements to repurchase (6,540,000) 25,000
Repayments of advances from the Federal Home Loan Bank (3,000,000) -
------------------ ------------------
Net cash provided by financing activities 16,485,388 16,990,357
------------------ ------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 4,458,938 6,895,424
CASH AND CASH EQUIVALENTS, BEGINNING 20,105,173 27,996,891
------------------ ------------------
CASH AND CASH EQUIVALENTS, ENDING $ 24,564,111 $ 34,892,315
================== ==================
Cash paid during the period for:
Income taxes $ 143,126 $ 116,033
Interest $ 1,649,682 $ 1,049,338
See notes to condensed financial statements.
</TABLE>
6
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RHBT FINANCIAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared in
accordance with the requirements for interim financial statements and,
accordingly, they are condensed and omit disclosures which would substantially
duplicate those contained in the most recent annual report to shareholders. The
financial statements as of March 31, 2000 and for the interim periods ended
March 31, 2000 and 1999 are unaudited and, in the opinion of management, include
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation. The financial information as of December 31, 1999 has
been derived from the audited financial statements as of that date. For further
information, refer to the financial statements and the notes included in RHBT
Financial Corporation's 1999 Annual Report.
NOTE 2 - COMPREHENSIVE INCOME
Comprehensive income includes net income and other comprehensive income which is
defined as non-owner related transactions in equity. The following table sets
forth the amounts of other comprehensive income included inequity along with the
related tax effect for the three-month period ended March 31, 2000.
<TABLE>
<CAPTION>
Pre-tax (Expense) Net of tax
FOR THE THREE MONTHS ENDED MARCH 31, 2000: Amount Benefit Amount
------------------- ------------------- ----------------
<S> <C> <C> <C>
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising
during the period $ (16,957) $ 6,274 $ (10,683)
Plus: reclassification adjustment for gains (losses)
realized in net income - - -
------------------- ------------------- ----------------
Net unrealized gains (losses) on securities (16,957) 6,274 (10,683)
------------------- ------------------- ----------------
Other comprehensive income $ (16,957) $ 6,274 $ (10,683)
=================== =================== ================
Pre-tax (Expense) Net of tax
FOR THE THREE MONTHS ENDED MARCH 1999: Amount Benefit Amount
------------------- ------------------- -----------------
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising
during the period $ (36,993) $ 13,687 $ (23,306)
Plus: reclassification adjustment for gains (losses)
realized in net income - - -
------------------- ------------------- ----------------
Net unrealized gains (losses) on securities (36,993) 13,687 (23,306)
------------------- ------------------- ----------------
Other comprehensive income $ (36,993) $ 13,687 $ (23,306)
=================== =================== ================
</TABLE>
Accumulated other comprehensive income consists solely of the unrealized gain on
securities available for sale, net of the deferred tax effects.
7
<PAGE>
RHBT FINANCIAL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
The following is a discussion of the Company's financial condition as of March
31, 2000 compared to December 31, 1999, and the results of operations for the
three months ended March 31, 2000 compared to the three months ended March 31,
1999. These comments should be read in conjunction with the Company's condensed
financial statements and accompanying footnotes appearing in this report. This
report contains "forward-looking statements" relating to, without limitation,
future economic performance, plans and objectives of management for future
operations, and projections of revenues and other financial items that are based
on the beliefs of the Company's management, as well as assumptions made by and
information currently available to the Company's management. The words "expect,"
"estimate," "anticipate," and "believe," as well as similar expressions, are
intended to identify forward-looking statements. The Company's actual results
may differ materially from the results discussed in the forward-looking
statements, and the Company's operating performance each quarter is subject to
various risks and uncertainties that are discussed in detail in the Company's
filings with the Securities and Exchange Commission.
RESULTS OF OPERATIONS
NET INTEREST INCOME
For the three months ended March 31, 2000, net interest income increased
$667,593, or 66.1%, to $1,676,992 as compared to $1,009,399 for the same period
in 1999. The net interest margin realized on earning assets increased from 3.77%
for the three months ended March 31, 1999 to 4.24% for the same period in 2000.
The interest rate spread increased by 52 basis points from 3.01% at March 31,
1999 to 3.53% at March 31, 2000.
PROVISION AND ALLOWANCE FOR LOAN LOSSES
The provision for loan losses is the charge to operating earnings that
management believes is necessary to maintain the allowance for possible loan
losses at an adequate level. For the three months ended March 31, 2000, the
provision charged to expense was $164,000. This increase of $83,000 from the
comparable period in 1999 is a result of management's efforts to increase the
allowance for loan losses to match the growth in the loan portfolio. There are
risks inherent in making all loans, including risks with respect to the period
of time over which loans may be repaid, risks resulting from changes in economic
and industry conditions, risks inherent in dealing with individual borrowers,
and, in the case of a collateralized loan, risks resulting from uncertainties
about the future value of the collateral. The Company maintains an allowance for
loan losses based on, among other things, historical experience, an evaluation
of economic conditions, and regular reviews of delinquencies and loan portfolio
quality. Management's judgment about the adequacy of the allowance is based upon
a number of assumptions about future events which it believes to be reasonable
but which may not prove to be accurate. Thus, there is a risk that charge-offs
in future periods could exceed the allowance for loan losses or that substantial
additional increases in the allowance for loan losses could be required.
Additions to the allowance for loan losses would result in a decrease of the
Company's net income and, possibly, its capital.
NONINTEREST INCOME
Noninterest income during the three months ended March 31, 2000 was $202,729, an
increase of $104,452 from $98,277 during the comparable period in 1999. The
increase is a result of an increase in service charges from $41,395 during the
three months ending March 31, 1999 to $75,859 for the three months ending March
31, 2000. In addition, the Company's trust department continues to grow,
resulting in income of $79,446 during the three months ended March 31, 2000,
compared to $30,139 during the comparable period in 1999.
8
<PAGE>
RHBT FINANCIAL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
NONINTEREST EXPENSE
Total noninterest expense for the three months ended March 31, 2000 was
$918,561, or 46.7% higher than the $626,303 amount for the three months ended
March 31, 1999. The largest increase was in other operating expense, which
increased from $242,453 for the three months ended March 31, 1999 to $384,951
for the three months ended March 31, 2000. The increase is partially
attributable to an increase in the costs associated with data processing.
Salaries and employee benefits also increased $102,208 to $363,435 for the three
months ended March 31, 2000. This increase can be attributable to the cost of
employees to staff an additional office and annual pay raises.
INCOME TAXES
The income tax provision for three months ended March 31, 2000 was $295,198 as
compared to $148,000 for the same period in 1999. The effective tax rate was 37%
at March 31, 2000 and 1999.
NET INCOME
The combination of the above factors resulted in net income for the three months
ended March 31, 2000 of $501,962 as compared to $252,373 for the same period in
1999. This represents an increase of $249,589 or 98.9% over the same period in
1999.
ASSETS AND LIABILITIES
During the first three months of 2000, total assets increased $17,331,607, or
11.6%, when compared to December 31, 1999. The primary source of growth in
assets was loans which increased $14,303,270 during the first three months of
2000. Federal funds sold and repurchase agreements increased $5,360,000 from
December 31, 1999 to $21,785,000 at March 31, 2000. Total deposits also
increased $26,025,388, or 24.1%, from the December 31, 1999 amount of
$107,826,073. Within the deposit area, certificates of deposit increased
$22,294,835, or 35.9%, during the first three months of 2000. Federal funds
purchased of $5,000,000 at December 31, 1999 were paid off by March 31, 2000.
Advances from the Federal Home Loan Bank decreased from $10,000,000 at December
31, 1999 to $7,000,000 at March 31, 2000.
INVESTMENT SECURITIES
Investment securities decreased slightly from $7,832,559 at December 31, 1999 to
$6,655,458 at March 31, 2000. The decrease can be attributed to the maturing of
four securities during March. The funds from the securities were invested in
higher yielding loans. All of the Company's investment securities were
designated as available-for-sale at March 31, 2000.
9
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RHBT FINANCIAL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
LOANS
The Company continued its trend of growth during the first three months of 2000,
especially in the loan area. Net loans increased $14,140,766, or 12.0%, during
the period. As shown below, the main component of growth in the loan portfolio
was commercial and industrial loans which increased 26.3%, or $13,026,356, from
December 31, 1999. Also, real estate - construction loans increased $1,516,352,
or 27.9%. Balances within the major loans receivable categories as of March 31,
2000 and December 31, 1999 are as follows:
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
-------------------- --------------------
<S> <C> <C>
Real estate - construction $ 6,936,016 $ 5,419,664
Real estate - mortgage 58,117,883 57,996,758
Commercial and industrial 62,595,509 49,569,153
Consumer and other 5,363,029 5,723,592
-------------------- --------------------
$ 133,012,437 $ 118,709,167
==================== ====================
RISK ELEMENTS IN THE LOAN PORTFOLIO
The following is a summary of risk elements in the loan portfolio:
March 31,
---------------------------------------------
2000 1999
-------------------- --------------------
Loans: Nonaccrual loans $ 1,869,352 $ -
Accruing loans more than 90
days past due $ 658 $ -
Loans identified by the internal review mechanism:
Criticized $ 1,912,000 $ -
Classified $ - $ 3,251
Activity in the Allowance for Loan Losses is as follows:
March 31,
---------------------------------------------
2000 1999
-------------------- --------------------
Balance, January 1, $ 1,226,442 $ 812,174
Provision for loan losses for the period 164,000 81,000
Net loans (charged off) recovered for
the period (1,496) (1,006)
-------------------- --------------------
Balance, end of period $ 1,388,946 $ 892,168
==================== ====================
Gross loans outstanding, end of period $ 133,012,437 $ 80,319,571
Allowance for loan losses to
loans outstanding 1.04% 1.11%
</TABLE>
10
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RHBT FINANCIAL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
DEPOSITS
At March 31, 2000, total deposits increased by $26,025,388, or 24.1%, from
December 31, 1999. The largest increase was in certificates of deposit which
increased $22,294,835, or 35.9%, from December 31, 1999 to March 31, 2000.
Expressed in percentages, non-interest bearing deposits increased 21.6% and
interest bearing deposits increased 24.3%.
Balances within the major deposit categories as of March 31, 2000 and December
31, 1999 are as follows:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
-------------------- --------------------
<S> <C> <C>
Noninterest bearing demand deposits $ 7,973,786 $ 6,555,078
Interest bearing demand deposits 36,521,351 34,659,500
Savings deposits 4,876,592 4,426,598
Time deposits $100,000 and over 38,506,530 29,434,939
Other time deposits 45,973,202 32,749,958
-------------------- --------------------
$ 133,851,461 $ 107,826,073
==================== ====================
</TABLE>
ADVANCES FROM THE FEDERAL HOME LOAN BANK
At March 31, 2000, Advances from the Federal Home Loan Bank totaled $7,000,000.
This amount consists of one advance with a fixed interest rate of 6.29% and
maturity date of September 30, 2009. The option to call this advance can be
exercised in 2000.
LIQUIDITY
Liquidity needs are met by the Company through scheduled maturities of loans and
investments on the asset side and through pricing policies on the liability side
for interest-bearing deposit accounts. The level of liquidity is measured by the
loan-to-total borrowed funds ratio which was at 89.6% at March 31, 2000 and
89.9% at December 31, 1999.
Securities available-for-sale, which totaled $6,655,458 at March 31, 2000, serve
as a ready source of liquidity. The Company also has lines of credit available
with correspondent banks to purchase federal funds for periods from one to seven
days. At March 31, 2000, unused lines of credit totaled $22,600,000.
CAPITAL RESOURCES
Total shareholders' equity increased from $16,913,454 at December 31, 1999 to
$17,404,733 at March 31, 2000. The increase is due to net income for the period
of $501,962, partially offset by a negative change of $10,683 in the fair value
of securities available-for-sale.
11
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RHBT FINANCIAL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
CAPITAL RESOURCES -- continued
Bank holding companies, such as the Company, and their banking subsidiaries are
required by banking regulators to meet certain minimum levels of capital
adequacy which are expressed in the form of certain ratios. Capital is separated
into Tier 1 capital (essentially common shareholders' equity less intangible
assets) and Tier 2 capital (essentially the allowance for loan losses limited to
1.25% of risk-weighted assets). The first two ratios, which are based on the
degree of credit risk in the Company's assets, provide the weighting of assets
based on assigned risk factors and include off-balance sheet items such as loan
commitments and stand-by letters of credit. The ratio of Tier I capital to
risk-weighted assets must be at least 4.0% and the ratio of total capital (Tier
1 capital plus Tier 2 capital) to risk-weighted assets must be at least 8.0%.
The capital leverage ratio supplements the risk-based capital guidelines. Banks
and bank holding companies are required to maintain a minimum ratio of Tier 1
capital to adjusted quarterly average total assets of 3.0%.
The following table summarizes the Company's risk-based capital at March 31,
2000:
Shareholders' equity $ 17,467,752
Less: intangibles 22,205
--------------------
Tier 1 capital 17,445,547
Plus: allowance for loan losses (1) 1,388,946
--------------------
Total capital $ 18,834,493
====================
Risk-weighted assets $ 132,058,488
====================
Risk based capital ratios
Tier 1 13.21%
Total capital 14.26%
Leverage ratio 10.63%
(1) limited to 1.25% of risk-weighted assets
REGULATORY MATTERS
From time to time, various bills are introduced in the United States Congress
with respect to the regulation of financial institutions. Certain of these
proposals, if adopted, could significantly change the regulation of banks and
the financial services industry. The Company cannot predict whether any of these
proposals will be adopted or, if adopted, how these proposals would affect the
Company.
12
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RHBT FINANCIAL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
YEAR 2000
Like many financial institutions, we rely upon computers for conducting our
business and for information systems processing. Industry experts were concerned
that on January 1, 2000, some computers would not be able to interpret the new
year properly, causing computer malfunctions. While we have not experienced any
material computer malfunctions to date, there remains a risk that our computers
will be unable to read or interpret data on Year 2000-sensitive dates, including
October 10, 2000. Our regulators have issued guidelines to require compliance
with Year 2000 issues. In accordance with these guidelines, we have developed
and executed a plan to ensure that our computer and telecommunication systems do
not have these Year 2000 problems. We generally rely on software and hardware
developed by independent third parties for our information systems. We believe
that our internal systems and software, including our network connections, are
programmed to comply with Year 2000 requirements, although there is a risk they
may not be. We incurred approximately $200,000 in costs in 1999 to implement our
Year 2000 plan. Under our plan, we are continuing to monitor the situation
throughout 2000. Based on information currently available, we believe that we
will not incur significant additional expenses in connection with the Year 2000
issue.
The Year 2000 issue may also negatively affect the business of our customers,
but to date we are not aware of any material Year 2000 issues affecting them. We
include Year 2000 readiness in our lending criteria to minimize risk. However,
this will not eliminate the issue, and any financial difficulties that our
customers experience caused by Year 2000 issues could impair their ability to
repay loans to us.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
3(a) Articles of Incorporation (incorporated by reference to the
Bank's Registration Statement on Form 10-SB filed July 30,
1998).
3(b) Bylaws (incorporated by reference to the Bank's
Registration Statement on Form 10-SB filed July 30, 1998)
4 Form of Certificate of Common Stock (incorporated by
reference to the Bank's Registration Statement on Form
10-SB filed July 30, 1998).
5.1 Opinion Regarding Legality (incorporated by reference to
the Bank's Registration Statement on Form 10-SB filed July
30, 1998).
10.1 Right of First Refusal Agreement dated May 16, 1998 with
Bailey Financial Corporation and the Bank. (incorporated
by reference to the Bank's Registration Statement on Form
10-SB filed July 30, 1998).
10.2 Share Exchange Agreement dated April 6, 1998 with Bailey
Financial Corporation and the Bank. (incorporated by
reference to the Bank's Registration Statement on Form
10-SB filed July 30, 1998).
13.1. Annual Report of Shareholders for the year ended December
31, 1999 (incorporated by reference to the Company's
10-KSB, Registration File No. 000-26905 for period ended
December 31, 1999).
13
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RHBT FINANCIAL CORPORATION
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -- continued
21.1 Subsidiaries of the Company (incorporated by reference to
the Company's 10-KSB, Registration File No. 000-26905 for
period ended December 31, 1999).
27.1. Financial Data Schedule for the period ended March 31,
2000.
- --------------
* Denotes executive compensation contract or arrangement.
Reports on Form 8-K
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the
quarter ended March 31, 2000.
Items 1, 2, 3, 4 and 5 are not applicable.
14
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RHBT FINANCIAL CORPORATION
SIGNATURE
Pursuant to the requirements 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/ J.A. FERGUSON, JR.
-----------------------------------
J.A. Ferguson, Jr.
President & Chief Executive Officer
Date: May 11, 2000 By: /s/ PATRICIA M. STONE
-----------------------------------
Patricia M. Stone
Chief Financial Officer
15
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