<PAGE> 1
U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
----------------------
For quarter ended June 30, 1995 Commission file number 0-10853
----------------- -------
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
(Exact name of small business issuer as specified in its charter)
----------------------
GEORGIA 58-1458268
- ------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification no.)
40 NORTH MAIN STREET
P.O. BOX 878
STATESBORO, GEORGIA 30459
-------------------------------
(Address of Principal Executive
Offices, including Zip Code)
912-764-6611
----------------------------
(Issuer's telephone number, including area code)
NOT APPLICABLE
----------------------------
(Former name, former address
and former fiscal year, if
changed since last report)
----------------------
Check whether the issuer: (1) has 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 requirement for the past 90 days.
Yes X No
----- -----
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
COMMON STOCK, $1.00 PAR VALUE 2,661,711 SHARES AS OF JUNE 30, 1995
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<PAGE> 2
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
----------------------
(thousands of dollars)
<S> <C> <C>
ASSETS
Cash and Due From Banks $ 8,993 $ 12,019
Interest Bearing Deposits in Other Banks 14,255 13,038
Federal Funds Sold 1,750 5,675
Investment Securities:
Available for Sale (Cost of $41,292 in 1995
and $46,866 in 1994) 41,315 45,337
Held to Maturity (Estimated Market Value
of $28,569 in 1995 and $17,317 in 1994) 27,866 17,285
Loans 173,322 162,787
Less: Unearned Interest (35) (56)
Allowance for Loan Losses (3,212) (3,005)
--------- ---------
Loans, Net 170,075 159,726
--------- ---------
Interest Receivable 3,830 3,185
Premises and Equipment, Net 3,471 3,113
Other Real Estate 299 307
Other Assets 2,012 2,467
--------- ---------
TOTAL ASSETS $ 273,866 $ 262,152
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 28,898 $ 31,509
Interest Bearing:
NOW Accounts 36,051 34,511
Money Market Deposit Accounts 32,708 35,371
Savings 10,847 10,469
Time ($100,000 and above) 55,434 51,099
Other Time 72,530 65,439
--------- ---------
Total Deposits 236,468 228,398
Other Borrowed Money 5,526 4,630
Interest Payable 2,080 1,855
Other Liabilities 976 1,012
--------- ---------
Total Liabilities 245,050 235,895
--------- ---------
Shareholders' Equity (Note 3):
Common Stock, 2,661,711 Shares Issued and Outstanding 2,662 2,662
Surplus 5,265 5,268
Retained Earnings 20,874 19,336
Net Unrealized Gain/(Loss) on Investment
Securities Available for Sale 15 (1,009)
--------- ---------
Shareholders' Equity 28,816 26,257
--------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 273,866 $ 262,152
========= =========
</TABLE>
See notes to consolidated financial statements.
1
<PAGE> 3
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months Ended
June 30,
1995 1994
--------------------------
(thousands of dollars)
<S> <C> <C>
INTEREST INCOME
Loans (Including fees) $ 4,536 $ 3,654
Interest Bearing Deposits 203 10
Investments:
U.S. Treasury 459 461
U.S. Government Agencies 373 245
States and Political Subdivisions 211 176
Dividend Income 31 5
Federal Funds Sold 20 82
---------- ----------
Total Interest Income 5,833 4,633
---------- ----------
INTEREST EXPENSE
NOW Accounts 265 207
Money Market Deposits Accounts 295 260
Savings 88 77
Time Deposits ($100,000 and above) 804 501
Other Time Deposits 1,011 694
Other 101 48
---------- ----------
Total Interest Expense 2,564 1,787
---------- ----------
NET INTEREST INCOME 3,269 2,846
Provision for Loan Losses 160 170
---------- ----------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 3,109 2,676
---------- ----------
NON-INTEREST INCOME
Service Charges on Deposits 361 347
Fees for Trust Services 53 47
Other 87 128
---------- ----------
Total Non-interest Income 501 522
---------- ----------
NON-INTEREST EXPENSE
Salaries 782 757
Other Personnel Expense 270 300
Occupancy Expense, Net 151 132
Equipment Expense 208 187
Other 645 632
---------- ----------
Total Non-interest Expense 2,056 2,008
---------- ----------
INCOME BEFORE INCOME TAXES 1,554 1,190
Provision for Income Taxes 472 346
---------- ----------
NET INCOME $ 1,082 $ 844
========== ==========
EARNINGS PER COMMON SHARE (NOTE 3) $ .41 $ .32
========== ==========
DIVIDENDS PER COMMON SHARE (NOTE 3) $ .12 $ .09
========== ==========
AVERAGE NUMBER OF SHARES OUTSTANDING (NOTE 3) 2,661,825 2,661,939
========== ==========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 4
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
1995 1994
-------------------------
(thousands of dollars)
<S> <C> <C>
INTEREST INCOME
Loans (Including fees) $ 8,820 $ 7,000
Interest Bearing Deposits 438 21
Investments:
U.S. Treasury 933 853
U.S. Government Agencies 648 492
States and Political Subdivisions 421 348
Dividend Income 80 8
Federal Funds Sold 55 183
---------- ----------
Total Interest Income 11,395 8,905
---------- ----------
INTEREST EXPENSE
NOW Accounts 542 413
Money Market Deposits Accounts 588 509
Savings 169 152
Time Deposits ($100,000 and above) 1,472 987
Other Time Deposits 1,894 1,390
Other 191 57
---------- ----------
Total Interest Expense 4,856 3,508
---------- ----------
NET INTEREST INCOME 6,539 5,397
Provision for Loan Losses 313 340
---------- ----------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 6,226 5,057
---------- ----------
NON-INTEREST INCOME
Service Charges on Deposits 719 678
Fees for Trust Services 89 81
Other 150 238
---------- ----------
Total Non-interest Income 958 997
---------- ----------
NON-INTEREST EXPENSE
Salaries 1,549 1,485
Other Personnel Expense 555 565
Occupancy Expense, Net 282 266
Equipment Expense 409 360
Other 1,259 1,228
---------- ----------
Total Non-interest Expense 4,054 3,904
---------- ----------
INCOME BEFORE INCOME TAXES 3,130 2,150
Provision for Income Taxes 957 618
---------- ----------
NET INCOME $ 2,173 $ 1,532
========== ==========
EARNINGS PER COMMON SHARE (NOTE 3) $ .82 $ .58
========== ==========
DIVIDENDS PER COMMON SHARE (NOTE 3) $ .24 $ .19
========== ==========
AVERAGE NUMBER OF SHARES OUTSTANDING (NOTE 3) 2,661,880 2,661,939
========== ==========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 5
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
June 30,
1995 1994
----------------------
(thousands of dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 2,173 $ 1,532
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Provision for Depreciation 276 256
Provision for Loan Losses 313 340
(Gain) Loss on Sale of Other Real Estate 5 (16)
Gain on Call of Securities (1)
Gain on Sale of Equipment (6) (2)
Amortization of Premiums and Discounts on Securities (31) 114
Changes in Assets and Liabilities:
Increase in Interest Receivable (645) (275)
Increase in Other Assets (73) (726)
Increase (Decrease) in Interest Payable 225 (244)
Increase (Decrease) in Other Liabilities (36) 359
-------- --------
Net Cash Provided by Operating Activities 2,200 1,338
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (Increase) Decrease in Interest Bearing Deposits
in Other Banks (1,217) 349
Net Decrease in Federal Funds Sold 3,925 11,475
Available-for-Sale Securities:
Proceeds from Maturity 7,023 3,899
Purchases (310) (14,302)
Held-to-Maturity Securities:
Proceeds from Maturity 8,625 894
Purchases (20,313) (1,844)
Net Increase in Loans (10,666) (5,666)
Purchases of Premises and Equipment (635) (140)
Proceeds from Sale of Equipment 7 2
Proceeds from Sale of Other Real Estate 7
-------- --------
Net Cash Used in Investing Activities (13,554) (5,333)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase in Deposits 8,070 3,104
Net Increase in Other Borrowed Money 896 2,338
Repayment of Note Payable (100)
Dividends Paid (638) (499)
-------- --------
Net Cash Provided by Financing Activities 8,328 4,843
-------- --------
INCREASE (DECREASE) IN CASH AND DUE FROM BANKS (3,026) 848
CASH AND DUE FROM BANKS AT BEGINNING OF YEAR 12,019 8,940
-------- --------
CASH AND DUE FROM BANKS AT END OF PERIOD $ 8,993 $ 9,788
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the year for:
Interest $ 2,339 $ 3,752
Income Taxes 922 535
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
Other Real Estate Acquired through Loan Foreclosure $ 30
Loans granted to facilitate the sale of Other Real Estate 26 95
(Increase) Decrease in Net Unrealized Loss on
Investment Securities Available for Sale 1,024 (836)
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 6
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The consolidated financial statements of First Banking Company of Southeast
Georgia (the "Company") include the financial statements of First Bulloch
Bank & Trust Company and Metter Banking Company, wholly-owned subsidiaries.
Intercompany balances and transactions have been eliminated in
consolidation.
The consolidated statements contained in this report are unaudited but
reflect all adjustments, consisting only of normal recurring accruals,
which are, in the opinion of management, necessary to a fair statement of
the results for the interim period reflected. 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 applicable rules and regulations of the
Securities and Exchange Commission. The results of operations for the
interim period reported herein are not necessarily indicative of results to
be expected for the full year.
The consolidated financial statements included herein should be read in
conjunction with the financial statements and notes thereto, and the
Independent Auditors' Report included in the Company's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1994.
2. ACCOUNTING POLICIES
Reference is made to the accounting policies of the Company described in
the notes to consolidated financial statements contained in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1994. The
Company has followed those policies in preparing this report.
3. COMMON STOCK
The par value of First Banking's common stock is $1 and 5,000,000 shares
are authorized. The Banks may pay dividends to First Banking in any year up
to 50% of the previous year's net income without the approval of the
Georgia Department of Banking and Finance.
Effective May 15, 1995, the Company declared a 5-for-3 stock split of its
common stock effected in the form of a 60 percent stock dividend. All
references to number of shares and to per share amounts have been
retroactively adjusted to reflect the split.
4. EARNINGS PER SHARE
Net Income per share of common stock is based on the weighted average
number of shares of common stock outstanding during each period, after
stating for the stock split (see Note 3).
5
<PAGE> 7
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL
CONDITION AND SUMMARY OF OPERATIONS FOR THE
SIX MONTHS ENDED JUNE 30, 1995
This discussion relates to the consolidated financial condition and
results of operations of First Banking Company of Southeast Georgia (the
"Company") and its wholly-owned subsidiaries, First Bulloch Bank & Trust
Company and Metter Banking Company (the "Banks"). Since the Company has no
subsidiaries other than the Banks and no activities other than those of the
Banks, the following narrative refers to the operations of the Banks.
FINANCIAL CONDITION
The Company functions as the sole owner of two commercial banks, and its
financial condition should be examined in terms of trends in sources and uses
of funds. The Company's primary use of funds comes from loan demand. Loans
outstanding have increased $10,556,000 or 6.5% since year-end. Investment
securities and interest-bearing deposits in other banks have increased
$6,559,000 and $1,217,000, respectively, while federal funds sold have
decreased by $3,925,000 from year-end.
Total assets have increased by $11,714,000 since year-end, while total
funds (deposits plus Other Borrowed Money) have increased $8,966,000. Total
deposits have increased $8,070,000 since year-end, and Other Borrowed Money has
increased $896,000. Demand deposits have decreased $2,611,000, and savings
deposits (including NOW accounts and the liquid money market accounts) have
decreased by $745,000. Time deposits over $100,000 have increased approximately
$4,335,000, and other time deposits have increased approximately $7,091,000,
primarily as a result of an increase in rates paid on deposits.
Effective May 15, 1995, the Company declared a 5-for-3 stock split of its
common stock effected in the form of a 60 percent stock dividend. All
references to number of shares and to per share amounts have been retroactively
adjusted to reflect the split.
6
<PAGE> 8
CAPITAL RESOURCES
The Company's ratio of shareholders' equity to total assets was 10.5% at
June 30, 1995 and 10.0% at December 31, 1994. This ratio of shareholders'
equity to assets is considered adequate to support the operations of the
Company.
LIQUIDITY
The percentage of net loans to total funds was 71.6% at June 30, 1995 and
69.8% at December 31, 1994. At June 30, 1995 the Banks had $24,998,000 in Cash
and Due from Banks, Interest Bearing Deposits in Other Banks, and Federal Funds
Sold as compared with $30,732,000 at December 31, 1994. The liquidity of the
Company and the Banks is considered adequate to repay deposits and other
obligations, meet expected loan demand and pay dividends.
SUMMARY OF OPERATIONS
INTEREST INCOME
Total interest income increased $2,490,000 (27.9%) in the first six months
of 1995 as compared to the first six months of 1994 and increased $1,200,000
(25.9%) in the second quarter of 1995 as compared to the second quarter of
1994. Interest on loans increased $1,820,000 in the first six months of 1995 as
compared to the first six months of 1994 and increased $882,000 in the second
quarter of 1995 as compared to the second quarter of 1994, as a result of
higher interest rates on loans outstanding as well as an increase in the
average loan portfolio of $12,477,000. Interest on investments increased
$381,000 in the first six months of 1995 from the first six months of 1994 and
increased $187,000 in the second quarter of 1995 from the second quarter of
1994. These increases are primarily the result of higher yields within the
portfolio as well as an increase of $7,465,000 in the average carrying amount
of investments.
During the first six months of 1995, interest on federal funds sold
decreased $128,000 from the first six months of 1994 and decreased $62,000 in
the second quarter of 1995 as compared to the second quarter of 1994. Interest
on interest-bearing deposits in other banks increased $417,000 during the first
six months of 1995 from the first six months of 1994 and increased $193,000 in
the second quarter of 1995 from the second quarter of 1994. These
7
<PAGE> 9
decreases and increases were the result of a shift in short-term investments
from federal funds sold to interest bearing deposit accounts as well as an
overall increase in total funds available for short-term investment.
INTEREST EXPENSE
During the first six months of 1995, total interest expense increased
$1,348,000 (38.4%) from the first six months of 1994 and increased $777,000
(43.5%) in the second quarter of 1995 from the second quarter of 1994. Interest
on deposits increased $1,214,000 (35.2%) in the first six months of 1995 from
the first six months of 1994 and increased $724,000 (41.6%) in the second
quarter of 1995 from the second quarter of 1994. These increases are
attributable to higher interest rates paid on deposits outstanding in 1995 as
compared to 1994 as well as an increase in the average amount of interest
bearing deposits. Interest on Other Borrowed Money increased $134,000 in the
first six months of 1995 from the first six months of 1994 and increased
$53,000 in the second quarter of 1995 from the second quarter of 1994. These
increases are the result of an increase in the average balance outstanding of
Other Borrowed Money at a higher average interest rate.
PROVISIONS FOR LOAN LOSSES
Provisions for loan losses for the first six months of 1995 decreased
$27,000 from the first six months of 1994 and decreased $10,000 in the second
quarter of 1995 from the second quarter of 1994. After considering the credit
worthiness of the loan portfolios, it is the opinion of the management of the
Banks that the allowance for loan losses is adequate. At June 30, 1995 the
allowance for loan losses was 1.9% of outstanding loans less unearned interest.
NONINTEREST INCOME AND EXPENSE
Noninterest income decreased $39,000 in the first six months of 1995 from
the first six months of 1994 and decreased $21,000 in the second quarter of
1995 from the second quarter of 1994. These decreases are primarily the result
of a decrease in income from long-term mortgage loans originated for other
banks partially offset by an increase in service charge income on deposit
accounts. Noninterest expense increased $150,000 in the first six months
8
<PAGE> 10
of 1995 compared to the first six months of 1994 and increased $48,000 in the
second quarter of 1995 as compared to the second quarter of 1994. These
increases in expense resulted primarily from increases in certain costs of the
operations of the Banks.
9
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Neither the Registrant nor either of its subsidiaries is a party to, nor
is any of their property the subject of, any material pending legal
proceedings, other than ordinary routine proceedings incidental to the
business of banks, nor to the knowledge of management are any such
proceedings contemplated or threatened against the Registrant or its
subsidiaries.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
At the Company's Annual Meeting of Shareholders on April 19, 1995, the
shareholders of the Company elected the following persons as Class I
directors of the Company by the votes indicated. Subsequent to the Annual
Meeting of Shareholders, the Company has declared and issued a 60% stock
dividend effected in the form of a 3-for-5 split of its' common stock.
Therefore, all share amounts presented in this Item are on a pre-split
basis. A total of 1,178,570 shares were represented in person or by proxy
at the meeting out of a total outstanding of 1,663,712 shares.
<TABLE>
<CAPTION>
Broker
Nominee For Against Non-votes Abstentions
------- --- ------- --------- -----------
<S> <C> <C> <C> <C>
E. Raybon Anderson 1,171,905 0 0 6,665
O. B. Bell 1,151,677 0 0 26,893
A. M. Braswell, Jr. 1,176,345 0 0 2,225
W. A. Crider, Jr. 1,176,345 0 0 2,225
Dan J. Parrish, Jr. 1,176,345 0 0 2,225
</TABLE>
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: 27 -- Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K: The Registrant did not file any reports on Form
8-K during the quarter for which this report is filed.
10
<PAGE> 12
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
DATE: August 3, 1995 BY: /s/ James Eli Hodges
------------------ --------------------------------------
JAMES ELI HODGES
PRESIDENT
DATE: August 3, 1995 BY: /s/ Dwayne E. Rocker
------------------ --------------------------------------
DWAYNE E. ROCKER
SECRETARY-TREASURER
(PRINCIPAL FINANCIAL OFFICER)
11
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of First Banking Company of Southeast Georgia for the six
months ended June 30, 1995 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 8,993
<INT-BEARING-DEPOSITS> 14,255
<FED-FUNDS-SOLD> 1,750
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 41,315
<INVESTMENTS-CARRYING> 27,866
<INVESTMENTS-MARKET> 28,569
<LOANS> 173,287
<ALLOWANCE> 3,212
<TOTAL-ASSETS> 273,866
<DEPOSITS> 236,468
<SHORT-TERM> 0
<LIABILITIES-OTHER> 3,056
<LONG-TERM> 5,526
<COMMON> 2,662
0
0
<OTHER-SE> 26,154
<TOTAL-LIABILITIES-AND-EQUITY> 273,866
<INTEREST-LOAN> 8,820
<INTEREST-INVEST> 2,082
<INTEREST-OTHER> 493
<INTEREST-TOTAL> 11,395
<INTEREST-DEPOSIT> 4,665
<INTEREST-EXPENSE> 4,856
<INTEREST-INCOME-NET> 6,539
<LOAN-LOSSES> 313
<SECURITIES-GAINS> 1
<EXPENSE-OTHER> 4,054
<INCOME-PRETAX> 3,130
<INCOME-PRE-EXTRAORDINARY> 3,130
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,173
<EPS-PRIMARY> 0.82
<EPS-DILUTED> 0.82
<YIELD-ACTUAL> 5.34
<LOANS-NON> 109
<LOANS-PAST> 186
<LOANS-TROUBLED> 899
<LOANS-PROBLEM> 1,194
<ALLOWANCE-OPEN> 3,005
<CHARGE-OFFS> 137
<RECOVERIES> 31
<ALLOWANCE-CLOSE> 3,212
<ALLOWANCE-DOMESTIC> 3,212
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
