<PAGE>
UNITED STATES
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 March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXHANGE ACT OF 1934
For the Transition Period from __________ to ___________
Commission file number 071851
Bank Corporation of Georgia
---------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-1406233
------- ----------
(State of Incorporation) (I.R.S. Employer Identification No.)
4951 Forsyth Road, Macon, Georgia 31210
----------------------------------------
(Address of principal executive offices)
(912) 757-2000
------------------------------------------------
(Issuer's telephone number, including area code)
Check whether the issuer filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange
Act after the distribution of securities under a plan confirmed
by court.
YES _____ No ____
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 XX No ___
State the number of shares outstanding of each of the
issuer's classes of common equity as of March 31, 1997:
2,284,864 shares of Common stock, $1.00 par value per share.<PAGE>
BANK CORPORATION OF GEORGIA
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1997 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-------------- -----------------
Assets
------
<S> <C> <C>
Cash and due from banks $ 32,284,816 34,027,974
Federal Funds sold 17,319,695 5,210,000
Investment securities:
Held to maturity 1,089,162 1,088,719
Available for sale 47,880,577 42,828,598
----------- -----------
Total investment securities 48,969,739 43,917,317
----------- -----------
Loans 189,321,816 190,169,408
Less: Unearned discount (587,500) (736,360)
Less: Allowance for loan losses (2,865,000) (2,849,340)
----------- -----------
Loans, net 185,869,316 186,583,708
----------- -----------
Bank premises and equipment 8,858,478 9,801,980
Accrued interest receivable 1,952,648 2,333,047
Goodwill 1,301,759 1,323,231
Other assets 5,949,087 7,057,065
----------- -----------
$ 302,505,538 290,254,322
=========== ===========
Liabilities and Stockholders' Equity
------------------------------------
Deposits:
Demand $ 46,114,503 44,709,405
Interest bearing deposits 92,968,488 79,417,686
Savings 9,044,431 9,405,878
Time 123,125,199 125,165,463
----------- -----------
Total deposits 271,252,621 258,698,432
----------- -----------
Accrued interest payable and other liabilities 2,313,338 3,333,327
Long-term debt 1,500,000 1,500,000
----------- -----------
Total liabilities 275,065,959 263,531,759
----------- -----------
Stockholders' equity:
Common stock 2,284,864 2,284,864
Capital surplus 6,170,157 6,170,157
Retained earnings 19,230,919 18,286,889
Treasury stock (111,540) (111,540)
Unearned ESOP shares (196,496) (196,496)
Unrealized gain on securities available for sale, net of tax 61,675 288,689
----------- -----------
Total Stockholders' equity 27,439,579 26,722,563
----------- -----------
$ 302,505,538 290,254,322
=========== ===========
</TABLE>
- 2 -
<PAGE>
BANK CORPORATION OF GEORGIA
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1997 AND MARCH 31, 1996
<TABLE>
<CAPTION>
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Cash and due from banks $ 32,284,816 7,626,954
Federal Funds sold 17,319,695 12,179,214
Investment securities:
Held to maturity 1,089,162 1,136,191
Available for sale 47,880,577 48,555,044
----------- -----------
Total investment securities 48,969,739 49,691,235
----------- -----------
Loans 189,321,816 188,308,301
Less: Unearned discount (587,500) (820,896)
Less: Allowance for loan losses (2,865,000) (2,679,468)
Loans, net 185,869,316 184,807,937
----------- -----------
Bank premises and equipment 8,858,478 8,729,223
Accrued interest receivable 1,952,648 2,094,097
Goodwill 1,301,759 892,878
Other Assets 5,949,087 5,321,262
----------- -----------
$ 302,505,538 271,342,800
=========== ===========
Liabilities and Stockholders' Equity
------------------------------------
Deposits:
Demand $ 46,114,503 36,048,440
Interest bearing deposits 92,968,488 64,197,441
Savings 9,044,431 10,158,246
Time 123,125,199 125,604,365
----------- -----------
Total deposits 271,252,621 236,008,492
----------- -----------
Accounts payable and accruals 2,313,338 2,271,110
Other borrowed money -- 6,100,000
Long-term debt 1,500,000 2,400,000
----------- -----------
Total liabilities 275,065,959 246,779,602
----------- -----------
Stockholders' equity:
Common stock 2,284,864 2,282,266
Capital surplus 6,170,157 6,161,387
Retained earnings 19,230,919 16,070,894
Unearned ESOP shares (196,496) (270,809)
Treasury stock (111,540) (111,540)
Unrealized gain on securities AFS 61,675 431,000
----------- -----------
Total stockholders' equity 27,439,579 24,563,198
----------- -----------
$ 302,505,538 271,342,800
=========== ===========
</TABLE>
- 3
<PAGE>
BANK CORPORATION OF GEORGIA
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1996
<TABLE>
<CAPTION>
Three Months ended:
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Interest income:
Interest and fees on loans $ 5,135,072 4,941,463
Interest on federal funds sold 126,415 170,534
Interest on investment securities 997,760 769,331
--------- ---------
Total interest income 6,259,247 5,881,328
--------- ---------
Interest expense:
Interest on NOW and money market accounts 718,235 479,152
Interest on savings and time deposits 1,720,052 1,868,528
Other borrowings 27,187 63,855
--------- ---------
Total interest expense 2,465,474 2,411,535
--------- ---------
Net interest income 3,793,773 3,469,793
Provision for loan losses 86,926 121,000
--------- ---------
Net interest income after provision for loan losses 3,706,847 3,348,793
--------- ---------
Other operating income:
Service charge on deposit accounts 360,402 359,637
Gain on sale of loans 156,534 5,739
Miscellaneous 256,144 275,124
--------- ---------
Total other operating income 773,080 640,500
--------- ---------
Other operating expenses:
Salaries and employee benefits 1,965,515 1,529,841
Occupancy and equipment 478,834 358,913
Miscellaneous 628,479 794,563
--------- ---------
Total operating expenses 3,072,828 2,683,317
--------- ---------
Earnings before income taxes and
minority interest in earnings of subsidiary 1,407,099 1,305,976
Income taxes 463,069 388,000
--------- ---------
Earnings before minority interest in earnings
of subsidiary 944,030 917,976
Minority interest in earnings of subsidiary -- 46,913
--------- ---------
Net earnings $ 944,030 871,063
========= =========
Net Earnings per share:
Primary $ 0.40 0.40
Fully diluted $ 0.39 0.40
Weighted average number of shares
Primary $ 2,388,192 2,198,338
Fully diluted $ 2,394,509 2,202,167
</TABLE>
- 4 -<PAGE>
BANK CORPORATION OF GEORGIA
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1996
<TABLE>
<CAPTION>
Three Months Ended:
March 31,1997 March 31, 1996
------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 944,030 871,063
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation 196,118 170,941
Amortization and accretion, net (23,330) (39,743)
Minority interests in earnings of subsidiary -- 46,916
Provision for loan losses 86,926 121,000
Gain on sale of premises and equipment (148,104) --
Change in:
Accrued interest receivable and other assets 1,787,810 383,262
Accrued interest payable and other liabilities (1,019,989) (710,566)
---------- ----------
Net cash flows provided by operating activities 1,823,461 842,873
---------- ----------
Cash flows from investing activities:
Proceeds from maturities of securities available for sale 2,587,103 2,312,624
Purchase of securities available for sale (7,894,161) (12,119,222)
Net change in loans 627,466 (7,184,327)
Purchase of premises and equipment (104,164) (976,616)
Proceeds from sales of premises and equipment 772,643 --
---------- ----------
Net cash flows used in investing activities (4,011,113) (17,967,541)
---------- ----------
Cash flows from financing activities:
Net increase in deposits 12,554,189 11,719,753
Repayment of other borrowings -- (100,000)
Proceeds from issuance of common stock -- 21,701
---------- ----------
Net cash flows provided by financing activities 12,554,189 11,641,454
---------- ----------
Net increase in cash and cash equivalents 10,366,537 (5,483,214)
Cash and cash equivalents at beginning of period 39,237,974 25,289,382
---------- ----------
Cash and cash equivalents at end of period $ 49,604,511 19,806,168
========== ==========
</TABLE>
- 5 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The financial statements included herein have been prepared by
Bank Corporation of Georgia (BCG), without audit, pursuant to
the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although BCG
believes that the disclosures contained herein are adequate to
make the information presented not misleading. In the opinion of
management, the information furnished in the condensed
consolidated financial statements reflects all adjustments which
are ordinary in nature and necessary to present fairly BCG's
financial position, results of operations and changes in
financial position for such interim period. These financial
statements should be read in conjunction with BCG's financial
statements and the notes thereto as of December 31, 1996,
included in BCG's annual report on Form 10KSB for the year ended
December 31, 1996. Bank Corporation of Georgia is a bank holding
company whose business is primarily conducted by its wholly-owned
banking subsidiaries First South Bank, N. A. ("FSB") and
Ameribank, N. A. ("Ameribank"). The accounting principles
followed by Bank Corporation of Georgia and its subsidiaries, and
the methods of applying those principles conform with generally
accepted accounting principles and with general practices within
the banking industry, where applicable.
During 1997, the Financial Accounting Standards Board has issued
Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" (SFAS 128). SFAS 128 supersedes APB Opinion 15. SFAS
128 simplifies current standards by eliminating the presentation
of primary EPS and requiring the presentation of basic EPS, which
includes no potential common shares and thus no dilution. The
Statement also requires entities with complex capital structures
to present basic and diluted EPS on the face of the income
statement and also eliminates the modified treasury stock method
of computing potential common shares. The Statement is effective
for financial statements issued for periods ending after December
15, 1997, including interim periods. Early application is not
permitted. On adoption, restatement of all prior-period EPS data
presented is required. Presently, BCG is unable to determine the
impact that adoption of SFAS 128 will have on the consolidated
financial statements, but management anticipates that the impact
will not be material.
- 6 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
Earnings Summary
- ----------------
Net income for the first three months of 1997 was $944,000, an
increase of $73,000 or 8.4 percent over the same period in
1996. The net income per share for the three months ended
March 31, 1997 and 1996 was $.40 and $.40, respectively. Net
interest income for the three months ended March 31, 1997
increased $324,000 or 9.3 percent over the same period in
1996. The increase is primarily due to an increase in net
interest earning assets over the same period in 1996.
The net interest margin, as a percentage of earning assets,
decreased to 5.78 percent for the first three months of 1997
as compared to 5.89 percent for the same period in 1996. Non-
interest income for the three month period ended March 31,
1997 increased $133,000 or 20.8 percent over the same period
in 1996. These increases were primarily the result of
increases in gains on sales of SBA loans and gains on sales of
other loans.
Non-interest expense increased by $390,000 in the first three
months of 1997 from the same period in 1996, an increase of
14.5 percent. Increases in salaries and employee benefits of
$436,000 or 28.5 percent and in occupancy and equipment
expense of $120,000 or 33 percent over similar periods in
1996 are related to the addition of three branches added
during 1996.
For the first three months of 1997, return on equity was 13.9
percent on an annualized basis versus 14.6 percent for the
same period a year earlier. The decline in return on equity
was related to several factors, among which were the cessation
of tax benefits related to net operating losses from Ameribank
and the costs associated with the three branch acquisitions or
openings discussed above.
Risk Elements
- -------------
The allowance for loan losses at March 31, 1997 was
$2,765,000 or 3.2 % higher than at March 31, 1996. At March
31, 1997, the allowance represented 1.46 % of total loans as
compared with 1.42 % at March 31, 1996 and 1.50% at December
31, 1996. At March 31, 1997 non-performing loans represented
.19% of total loans as compared with .38 % at December 31,
1996 and .48% at March 31, 1996. The allowance for loan
losses as a percentage of non-performing loans was 765% at
March 31, 1997 as compared with 394% at December 31, 1996 and
794% at March 31, 1996.
Capital Resources
- -----------------
Shareholders' equity of $27,439,579 at March 31, 1997
increased 2.8 percent from December 31, 1996 and 11 percent
over the same period in 1996 resulting in book value per
outstanding common of share of $12.01 compared to $11.70 at
December 31, 1996 and $10.76 at March 31, 1996. Capital for
- 7 -
<PAGE>
BCG is above regulatory requirements, with GAAP equity of 9.07
percent of total assets at March 31, 1997 compared to 9.21
percent at December 31, 1996 and 9.05 percent at March 31,
1996. The increases in shareholders' equity was primarily the
result of net earnings.
Recent Developments
- -------------------
On March 17, 1997, the Board of Directors of BCG signed a
statement of intent to merge with Century South Banks, Inc.
("Century"), a ten bank holding company headquartered in
Gainesville, Georgia. Under the terms of the statement of
intent, shareholders of BCG will receive 1.33 shares of
Century stock for each share of BCG stock they own. The Board
expects the merger, which is subject to regulatory and
shareholder approval, to be consummated in the third quarter
1997.
Set forth below are pertinent capital ratios for the Company
and the Banks as of March 31, 1997:
<TABLE>
<CAPTION>
First
South
Minimum Capital Requirements: Bank Ameribank
---------------------------- ----- ---------
<S> <C> <C>
Tier 1 Capital to Risk-
based Assets: 4.00% 12.25% 11.77%
Total Capital to Risk-
based Assets: 8.00% 12.55% 12.95%
Leverage Ratio (Tier 1
Capital to Total Assets): 8.54% 8.05%
</TABLE>
Minimum for "Well Capitalized" Banks = 8%
Minimum for "Well Capitalized" Banks = 10%
Minimum for "Well Capitalized" Banks = 6%
Liquidity and Interest Rate Sensitivity
- ---------------------------------------
Liquidity management involves the ability to meet cash flow
requirements of customers who may be depositors making
withdrawals or borrowers needing credit funding. BCG's cash
flows are generated from interest and fee income, as well as
from loan repayments, deposit acquisition, and maturities or
sales of investments. BCG's liquidity needs are provided for
primarily through short-term securities, and the maturing of
loans. Federal funds sold represent BCG's primary source of
immediate liquidity and were maintained at a level adequate
to meet immediate needs. Federal funds averaged $23,111,000
and $11,360,000 for the three months ended March 31, 1997 and
March 31,1996, respectively. Maturities in BCG's loan and investment
portfolios are monitored regularly to avoid matching short-
term deposits with long-term loans and investments. Other
assets and liabilities are also monitored to provide the
proper balance between liquidity, safety, and profitability.
This monitoring process must be continuous due to the constant
flow of cash which is inherent in a financial institution.
- 8 -<PAGE>
BCG actively manages its interest rate sensitive assets and
liabilities to reduce the impact of interest rate
fluctuations. At March 31, 1997, BCG's rate sensitive
liabilities exceeded rate sensitive assets due within one year
by $17.6 million. BCG manages its liquidity through the
volatility of its deposits and patterns in loan demand, its
current liquidity position, its ability to control funding
needs and potential sources of funds. As part of managing
liquidity, the Company monitors its loan to deposit ratio on a
daily basis. The target ratio is 75 percent. At March 31,
1997 the ratio was 70 percent.
BCG experienced a net increase in cash and cash equivalents,
its primary source of liquidity, of $10,366,537 during the
first three months of 1997. Operating activities provided
$1,823,461 of funds. Adjustments to net earnings for non-cash
expenses of depreciation, amortization, and provision for loan
losses are included in this amount as a net provision of
funds. Investing activities used $4,011,113 of funds,
primarily due to an purchases of securities available for sale
of approximately $7,894,000 offset by calls and maturities of
securities available for sale of approximately $2,587,000, as
well as proceeds from the sale of premises and equipment of
approximately $773,000. Financing activities provided
$12,554,189, from an increase in deposits during the three
month period ended March 31, 1997.
- 9 -
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Neither Bank Corporation of Georgia nor its subsidiaries is
a party to any pending legal proceedings which management
believes would have a material effect upon the operations or
financial condition of Bank Corporation of Georgia.
Item 2. Changes in Securities - Not applicable.
Item 3. Defaults Upon Senior Securities Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders -
Not applicable.
Item 5. Other Information Not applicable.
Item 6. Exhibits and Reports on Form 8K Not applicable.
(a) Exhibits. Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K. Not applicable
SIGNATURES
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.
Dated: _______________________
BANK CORPORATION OF GEORGIA
/s/ Nancy J. Carter
Nancy J. Carter
Controller
(Principal Financial Officer)
- 11 -
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000315708
<NAME> BANK CORPORATION OF GEORGIA
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 32,285
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 17,320
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 47,880
<INVESTMENTS-CARRYING> 1,089
<INVESTMENTS-MARKET> 1,076
<LOANS> 185,869
<ALLOWANCE> 2,865
<TOTAL-ASSETS> 302,506
<DEPOSITS> 271,253
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2,313
<LONG-TERM> 1,500
0
0
<COMMON> 2,285
<OTHER-SE> 25,155
<TOTAL-LIABILITIES-AND-EQUITY> 302,506
<INTEREST-LOAN> 5,135
<INTEREST-INVEST> 998
<INTEREST-OTHER> 126
<INTEREST-TOTAL> 6,259
<INTEREST-DEPOSIT> 2,438
<INTEREST-EXPENSE> 2,465
<INTEREST-INCOME-NET> 3,794
<LOAN-LOSSES> 87
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,073
<INCOME-PRETAX> 1,408
<INCOME-PRE-EXTRAORDINARY> 1,408
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 944
<EPS-PRIMARY> 0.40
<EPS-DILUTED> 0.39
<YIELD-ACTUAL> 5.78
<LOANS-NON> 349
<LOANS-PAST> 12
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,849
<CHARGE-OFFS> 115
<RECOVERIES> 44
<ALLOWANCE-CLOSE> 2,865
<ALLOWANCE-DOMESTIC> 2,865
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
