SECURITY AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarter ended June 30, 1995 Commission file number 2-71249
SOUTH BANKING COMPANY
(Exact name of registrant as specified in its charter)
Georgia 58-1418696
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
104 North Dixon Street, Alma, Georgia 31510
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (912) 632-8631
Former name, former address and former fiscal year, if changed since
last report.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 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 report(s), and (2)
has been subject to such filing requirement 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 June 30, 1995.
Common stock, $1.00 par value - 405,283 shares outstanding
SOUTH BANKING COMPANY
SOUTH BANKING COMPANY
ALMA, GEORGIA
Part I. Financial Information
Consolidated Financial Statements . . . . . . . . . . . .4 - 9
Notes to Consolidated Financial Statements . . . . . . . . 10
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . 11
Part II. Other Information . . . . . . . . . . . . . . . . . . .12 -13
SOUTH BANKING COMPANY
ALMA, GEORGIA
CONSOLIDATED STATEMENT OF CONDITION
June 30, December 31,
1995 1994
ASSETS
Cash and due from banks $ 5,304,448 $ 3,447,596
Deposits in other banks -
interest bearing $ 795,000 $ 995,000
Investment securities
Available for sale $ 4,811,661 $ 4,063,412
Held to maturity $ 4,474,105 $ 5,069,898
Georgia Bankers' stock $ 272,880 $ 272,880
Stock - Pineland Bank - at cost $ 130,463 $ -
Federal Funds Sold $ 3,365,000 $ 8,655,000
Loans $65,075,063 $57,201,948
Less: Unearned discount ( 58,803) ( 58,622)
Reserve for loan losses (1,039,287) ( 974,866)
$63,976,973 $56,168,460
Bank premises and equipment $ 3,193,288 $ 3,252,981
Other assets $ 2,602,176 $ 2,551,300
Total Assets $88,925,994 $84,476,527
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits: Demand - non-interest bearing $13,458,771 $14,751,893
Demand - interest bearing 13,710,252 15,350,308
Savings 6,636,266 7,172,540
Time 43,402,262 36,509,016
$77,207,551 $73,783,757
Borrowing 1,227,238 1,292,238
Accrued expenses and other liabilities 687,087 402,755
Total Liabilities $79,121,876 $75,478,750
The accompanying notes are an integral part of these financial statements.
SOUTH BANKING COMPANY
ALMA, GEORGIA
CONSOLIDATED STATEMENT OF CONDITION (con't)
June 30, December 31,
1995 1994
Stockholders' Equity
Common stock $1 par value; shares
authorized - 1,000,000 shares
issued and outstanding June 30,
1995 and December 31, 1994,
405,283 and 405,283, respectively $ 405,283 $ 405,283
Surplus 3,136,238 3,136,238
Undivided profits 6,269,036 5,537,253
Unrealized gain (loss) on
securities ( 6,439) ( 80,997)
Total Stockholders' Equity $ 9,804,118 $ 8,997,777
Total Liabilities and
Stockholders' Equity $88,925,994 $84,476,527
The accompanying notes are an integral part of these financial statements.
SOUTH BANKING COMPANY
ALMA, GEORGIA
CONSOLIDATED STATEMENT OF INCOME
Three Three
Months Months Six Months Six Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
1995 1994 1995 1994
Interest Income:
Interest & fees
on loans $ 1,792,977 $ 1,401,329 $ 3,445,336 $ 2,701,550
Interest on federal
funds sold 86,586 62,546 177,995 109,677
Interest on deposits
with other banks 12,324 16,955 20,147 35,763
Interest on
investment
securities:
U.S. Treasury 20,333 28,698 41,915 55,580
Mortgage backed
securities 35,795 25,163 71,920 49,878
U.S. Government
agencies 68,397 51,801 131,715 113,003
State & municipal
subdivisions 16,938 29,254 30,397 61,209
Other 9,655 - 9,655 12,880
Total Interest
Income $ 2,043,005 $ 1,615,746 $ 3,929,080 $ 3,139,540
Interest Expense:
Interests on
deposits $ 776,988 $ 513,899 $ 1,411,715 $ 1,012,023
Interest on other
borrowings 23,824 13,093 56,718 24,310
Total Interest
Expense $ 800,812 $ 526,992 $ 1,468,433 $ 1,036,333
Net Interest
Income $ 1,242,193 $ 1,088,754 $ 2,460,647 $ 2,103,207
Provision for loan
losses 16,800 16,500 33,600 28,000
Net interest income
after provision
for loan losses $ 1,225,393 $ 1,072,254 $ 2,427,047 $ 2,075,207
The accompanying notes are an integral part of these financial statements.
SOUTH BANKING COMPANY
ALMA, GEORGIA
CONSOLIDATED STATEMENT OF INCOME (con't)
Three Three
Months Months Six Months Six Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
1995 1994 1995 1994
Other Operating Income:
Service charge on
deposit accounts $ 239,870 $ 251,912 $ 473,114 $ 504,315
Commission on
insurance 17,744 27,451 32,227 36,330
Other income 41,819 36,661 217,825 70,110
Total Other
Operating Income $ 299,433 $ 316,024 $ 723,166 $ 610,755
Other Operating Expenses:
Salaries $ 456,837 $ 432,011 $ 853,684 $ 789,614
Profit sharing &
personnel expense 65,491 44,175 123,000 111,770
Occupancy expense 75,843 76,537 166,714 139,970
Furniture &
fixtures expense 88,568 62,045 192,989 112,895
Payroll taxes 22,824 27,621 51,932 53,130
Data processing - 130,863 - 220,019
Other operating
Expenses 335,801 333,418 668,875 633,632
Total Other Operating
Expenses $ 1,045,364 $ 1,106,670 $ 2,057,194 $ 2,061,030
Income before
income taxes $ 479,462 $ 281,608 $ 1,093,019 $ 624,932
Applicable income
taxes 160,092 88,160 361,236 186,032
Net Income $ 319,370 $ 193,448 $ 731,783 $ 438,900
Per share data based
on weighted average
outstanding shares
Weighted average
outstanding
shares 405,283 405,283 405,283 405,423
Net Income $ .79 $ .48 $ 1.81 $ 1.08
The accompanying notes are an integral part of these financial statements.
SOUTH BANKING COMPANY
ALMA, GEORGIA
STATEMENT OF CASH FLOWS
Six Months Six Months
Ended Ended
June 30, June 30,
1995 1994
Cash Flows From Operating Activities:
Net income $ 731,783 $ 438,900
Add expenses not requiring cash:
Provision for depreciation and
amortization 219,375 104,401
Provision for loan losses 33,600 28,000
Bond portfolio losses - -
Gain on sale of other real estate
owned 14,004 -
Increase (decrease) in taxes
payable ( 92,664) 25,163
Increase (decrease) in interest
payable 195,988 177,875
Increase (decrease) in other
liabilities 181,008 ( 19,918)
(Increase) decrease in interest
receivable ( 251,498) ( 126,994)
(Increase) decrease in prepaid
expenses ( 24,561) 16,357
(Increase) decrease in other
assets ( 206,788) ( 478,228)
Recognition of unearned loan
income 181 ( 17,072)
Net Cash Used in Operating Activities $ 800,428 $ 148,484
Cash Flows From Investing Activities:
Proceeds from maturities of
investment securities $ 1,855,353 $ 2,227,303
Purchase of investment securities (1,871,776) (1,254,721)
Net loans to customers (7,842,294) (4,601,963)
Purchase of premise and equipment ( 133,254) ( 818,549)
Proceeds from sale of premises
and equipment - -
Proceeds from other real estate owned 339,594 -
Purchase stock - Pineland Bank ( 130,463) -
Options to purchase Pineland Bank stock ( 9,530) -
Net Cash Used in Investing Activities $(7,792,370) $(4,447,930)
The accompanying notes are an integral part of these financial statements.
SOUTH BANKING COMPANY
ALMA, GEORGIA
STATEMENT OF CASH FLOWS (Con't)
Six Months Six Months
Ended Ended
June 30, June 30,
1995 1994
Cash Flows From Financing Activities:
Net increase (decrease) in demand
deposits, NOW and money market $(2,933,178) $( 604,559)
Net increase (decrease) in savings
and time deposit 6,356,972 1,927,946
Net increase (decrease) in borrowings ( 65,000) 650,000
Dividends paid -
Redemptions of company stock - ( 3,300)
Net Cash Provided (Used) From
Financing Activities $ 3,358,794 $ 1,970,087
Net Increase (Decrease) in Cash
and Cash Equivalents $(3,633,148) $(2,329,359))
Cash and Cash Equivalents at
Beginning of Year 13,097,596 13,552,011
Cash and Cash Equivalents at
End of Period $ 9,464,448 $11,222,652
The accompanying notes are an integral part of these financial statements.
SOUTH BANKING COMPANY
ALMA, GEORGIA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
The accompanying consolidated financial statements in this report
have not been audited. The statements have been prepared in accordance
with generally accepted accounting principles and general practice
within the banking industry.
On February 28, 1990, the merger of Georgia Peoples Bankshares,
Inc. into South Banking Company was completed. The purchase method of
accounting was used to record this transaction. The activity of Georgia
Peoples Bankshares, Inc. since February 28, 1990 has been consolidated
in these statements.
Effective January 1, 1993, the company adopted FASB 109 regarding
recording of deferred income taxes. Prior year statements have been
restated to reflect an adjustment required of $58,508 reduction in
deferred taxes and an increase in equity.
In the opinion of management, all adjustments for the fair
presentation of the financial position and results of operations for the
interim periods have been made.
SOUTH BANKING COMPANY
ALMA, GEORGIA
MANAGEMENT'S DISCUSSION
During the second quarter of 1994, total assets increased
$2,963,132 or 3.4%. The banks have experienced a substantial increase
in deposits due to the stabilizing of certificate rates during this
period of improved economic activity. The banks have not been
aggressively attempting to maintain certificate of deposits that are
rate sensitive; however, an increase has occurred during this quarter as
the bank continues their attempt to stop the movement of money and has
been able to maintain more of the money of core customers. The core
bank deposits have remained solid and increased slightly. The demand
for loans resulted in a net increase in loans of $5,949,871 or 10.1%.
The bank continues to scrutinize the loan portfolio and loan request to
insure quality loans. The increase in assets in 1995 of 5.3% compared
to a increase of 2.7% for 1994 is an indication of the improved economy.
Net income increased by $125,922 for the period in 1995 compared to
1994. Net interest income increased by $153,439 or 14.1%. This
increase in net interest income results from the changes in the mix of
interest earning assets and the increase in higher yielding loans.
Service charges have decreased by $12,042 or 4.8% over 1994. Other
income increased by $51,581 in 1995 over 1994 for the second quarter.
Other income has increaed substantially in 1995, as a result of
participation in the SBA loan program and as a result of services
rendered by the data processing center for nonrelated banks. The data
processing center began operations during the second quarter of 1994.
Provision for loan losses have remained at levels consistent with
prior year as the reserve for loan losses continue to be adequate for
the loan portfolio. The reserve was increased substantially in 1991 and
management feels current provision levels are adequate based on current
conditions.
Operating expense as a total decreased $61,306 or 5.5%. This
primary area of decrease is in data processing cost related to computer
conversion. The prior year had excess cost related to conversion.
The bank continues to monitor the economy and operations to insure
proper actions are taken as the economy and banking climate continue to
change.
SOUTH BANKING COMPANY
ALMA, GEORGIA
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - No change.
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits - None
(27) Financial Data Schedule
The registrant has not filed any reports on Form 8-K
during the six month period ended June 30, 1995.
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.
SOUTH BANKING COMPANY
(Registrant)
Date: By:
Valene Bennett
President
Date: By:
Paul Bennett
Vice President
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