<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Mark One
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 2000; or
[_] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Transition period from __________ to ___________.
Commission File Number 0-11986
SUMMIT BANCSHARES, INC.
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 75-1694807
---------------------- ----------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
1300 Summit Avenue, Fort Worth, Texas 76102
-------------------------------------------
(Address of principal executive offices)
(817) 336-6817
---------------------------------
(Registrant's telephone number, including area code)
No Change
--------------------------------------------------------------------------------
(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 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 ___
---
The number of shares of common stock, $1.25 par value, outstanding at June 30,
2000 was 6,380,841 shares.
<PAGE>
SUMMIT BANCSHARES, INC.
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Consolidated Balance Sheets at June 30, 2000 and 1999
and at December 31, 1999 4
Consolidated Statements of Income for the Three Months
and Six Months Ended June 30, 2000 and 1999
and for the Year Ended December 31, 1999 5-6
Consolidated Statements of Changes in Shareholders'
Equity for the Six Months Ended June 30, 2000
and 1999 and for the Year Ended December 31, 1999 7
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 2000 and 1999 and for
the Year Ended December 31, 1999 8
Notes to Consolidated Financial Statements for the Six
Months Ended June 30, 2000 and 1999 and for the
Year Ended December 31, 1999 9-20
The June 30, 2000 and 1999 and the December 31, 1999 financial statements
included herein are unaudited; however, such information reflects all
adjustments (consisting solely of normal recurring adjustments), which are, in
the opinion of management of the registrant, necessary to a fair statement of
the results for the interim periods.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations for the Six Months
Ended June 30, 2000 and 1999 21-28
2
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Change in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
3
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
-----------------------------
SUMMIT BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
June 30, (Unaudited)
-------------------- December 31,
2000 1999 1999
-------- -------- --------
<S> <C> <C> <C>
ASSETS (In Thousands)
CASH AND DUE FROM BANKS - NOTE 1 $ 27,577 $ 23,117 $ 19,092
FEDERAL FUNDS SOLD & DUE FROM TIME 19,245 8,980 18,012
INVESTMENT SECURITIES - NOTE 2
Securities Available-for-Sale, at fair value 121,769 108,358 129,116
Securities Held-to-Maturity, at cost (fair value of 24,029 29,336 27,324
$23,396,000, $29,175,000, and $26,739,000
June 30, 2000 and 1999 and December 31, 1999,
respectively)
LOANS - NOTE 3 AND 11
Loans, Net of Unearned Discount 377,641 339,212 355,414
Allowance for Loan Losses (6,899) (4,895) (5,169)
-------- -------- --------
LOANS, NET 370,742 334,317 350,245
PREMISES AND EQUIPMENT - NOTE 4 8,404 8,964 8,562
ACCRUED INCOME RECEIVABLE 5,021 4,313 4,503
OTHER REAL ESTATE - NOTE 5 1,343 1,467 1,947
OTHER ASSETS 7,241 5,479 5,985
-------- -------- --------
TOTAL ASSETS $585,371 $524,331 $564,786
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS - NOTE 6
Noninterest-Bearing Demand $140,466 $128,753 $128,685
Interest-Bearing 362,755 325,145 351,861
-------- -------- --------
TOTAL DEPOSITS 503,221 453,898 480,546
SHORT TERM BORROWINGS - NOTE 7 29,052 20,340 32,091
NOTE PAYABLE - NOTE 8 -0- 250 -0-
ACCRUED INTEREST PAYABLE 752 546 576
OTHER LIABILITIES 2,313 2,367 2,864
-------- -------- --------
TOTAL LIABILITIES 535,338 477,401 516,077
-------- -------- --------
COMMITMENTS AND CONTINGENCIES - NOTE 12, 14, 16 AND 18
SHAREHOLDERS' EQUITY - NOTES 13, 15 AND 19
Common Stock - $1.25 Par Value; 20,000,000 shares
authorized; 6,380,841, 6,453,497 and 6,361,247 shares
issued and outstanding at June 30, 2000 and 1999 and
at December 31, 1999, respectively 7,976 8,067 7,952
Capital Surplus 6,643 6,428 6,469
Retained Earnings 37,179 33,529 35,474
Accumulated Other Comprehensive Income - Unrealized Loss
on Available for Sale Investment Securities, Net of Tax (1,298) (273) (1,186)
Treasury Stock at Cost (28,563 and 43,500 shares at
June 30, 2000 and 1999, respectively) (467) (821) -0-
-------- -------- --------
TOTAL SHAREHOLDERS' EQUITY 50,033 46,930 48,709
-------- -------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $585,371 $524,331 $564,786
======== ======== ========
</TABLE>
The accompanying Notes should be read with these financial statements.
4
<PAGE>
SUMMIT BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(Unaudited)
For the Six Months Ended June 30, (Unaudited)
--------------------------------- Year Ended December 31,
2000 1999 1999
-------- -------- -------
(In Thousands, Except Per Share Data)
<S> <C> <C> <C>
INTEREST INCOME
Interest and Fees on Loans $ 17,718 $ 14,546 $ 30,620
Interest and Dividends on Investment Securities:
Taxable 4,570 4,091 8,495
Exempt from Federal Income Taxes 10 19 35
Interest on Federal Funds Sold & Due From Time 403 459 1,082
-------- -------- --------
TOTAL INTEREST INCOME 22,701 19,115 40,232
-------- -------- --------
INTEREST EXPENSE
Interest on Deposits 7,813 6,094 12,837
Interest on Short Term Borrowings 721 314 926
Interest on Note Payable -0- 3 9
-------- -------- --------
TOTAL INTEREST EXPENSE 8,534 6,411 13,772
-------- -------- --------
NET INTEREST INCOME 14,167 12,704 26,460
LESS: PROVISION FOR LOAN LOSSES - NOTE 3 1,728 638 1, 001
-------- -------- --------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 12,439 12,066 25,459
-------- -------- --------
NON-INTEREST INCOME
Service Charges and Fees on Deposits 970 967 2,002
Loss on Sale of Investment Securities -0- -0- (3)
Other Income 856 966 1,881
-------- -------- --------
TOTAL NON-INTEREST INCOME 1,826 1,933 3,880
-------- -------- --------
NON-INTEREST EXPENSE
Salaries and Employee Benefits - NOTE 14 4,689 4,491 9,226
Occupancy Expense - Net 505 550 1,031
Furniture and Equipment Expense 692 590 1,202
Other Real Estate Owned Expense - Net 356 25 107
Other Expense - NOTE 9 2,200 1,760 3,658
-------- -------- --------
TOTAL NON-INTEREST EXPENSE 8,442 7,416 15,224
-------- -------- --------
INCOME BEFORE INCOME TAXES 5,823 6,583 14,115
APPLICABLE INCOME TAXES - NOTE 10 2,026 2,276 4,893
-------- -------- --------
NET INCOME $ 3,797 $ 4,307 $ 9,222
======== ======== ========
NET INCOME PER SHARE - NOTE 15
Basic $ .60 $ .67 $ 1.44
Diluted .58 .64 1.39
</TABLE>
The accompanying Notes should be read with these financial statements.
5
<PAGE>
SUMMIT BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(Unaudited)
For the Three Months Ended
June 30,
---------------------------
2000 1999
-------- --------
(In Thousands, Except Per Share Data)
<S> <C> <C>
INTEREST INCOME
Interest and Fees on Loans $ 9,037 $ 7,537
Interest and Dividends on Investment Securities:
Taxable 2,291 2,019
Exempt from Federal Income Taxes 4 9
Interest on Federal Funds Sold & Due From Time 219 156
------- -------
TOTAL INTEREST INCOME 11,551 9,721
------- -------
INTEREST EXPENSE
Interest on Deposits 4,073 3,000
Interest on Short Term Borrowings 370 154
Interest on Note Payable -0- 3
------- -------
TOTAL INTEREST EXPENSE 4,443 3,157
------- -------
NET INTEREST INCOME 7,108 6,564
LESS: PROVISION FOR LOAN LOSSES - NOTE 3 1,496 418
------- -------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 5,612 6,146
------- -------
NON-INTEREST INCOME
Service Charges and Fees on Deposits 488 489
Other Income 430 413
------- -------
TOTAL NON-INTEREST INCOME 918 902
------- -------
NON-INTEREST EXPENSE
Salaries and Employee Benefits 2,332 2,350
Occupancy Expense - Net 247 305
Furniture and Equipment Expense 354 307
Other Real Estate Owned (Income) Expense - Net 368 (2)
Other Expense 1,148 718
------- -------
TOTAL NON-INTEREST EXPENSE 4,449 3,678
------- -------
INCOME BEFORE INCOME TAXES 2,081 3,370
APPLICABLE INCOME TAXES - NOTE 10 734 1,159
------- -------
NET INCOME $ 1,347 $ 2,211
======= =======
NET INCOME PER SHARE
Basic $ .22 $ .34
Diluted .21 .33
</TABLE>
The accompanying Notes should be read with these financial statements.
6
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
AND FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
June 30, December 31,
------------------------ -------------
2000 1999 1999
-------- -------- ---------
CASH FLOW FROM OPERATING ACTIVITIES: (In Thousands)
<S> <C> <C> <C>
Net Income $ 3,797 $ 4,307 $ 9,222
-------- -------- ---------
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 526 537 1,081
Net Discount Accretion of Investment Securities (41) (17) (39)
Provision for Loan Losses 1,728 638 1,001
Deferred Income Taxes (Benefit) (713) (115) (385)
Loss on Sale of Investment Securities -0- -0- 3
Writedown of Other Real Estate 420 -0- -0-
Writedown of Other Assets -0- 1 -0-
Net Gain From Sale of Other Real Estate (77) (9) (36)
Net Gain on Sale of Premises and Equipment -0- -0- (105)
Increase in Accrued Income and Other Assets (920) (205) (33)
Increase (Decrease) in Accrued Expenses and Other Liabilities (375) (277) 250
-------- -------- ---------
Total Adjustments 548 553 1,737
-------- -------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,345 4,860 10,959
-------- -------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) Decrease in Federal Funds Sold (1,233) 29,726 20,694
Proceeds from Matured and Prepaid Investment Securities
. Held-to-Maturity 285 3,280 4,280
. Available-for-Sale 1,272 55,184 63,531
Proceeds from Sales of Investment Securities 45,929 3,997 71,214
Purchase of Investment Securities
. Held-to-Maturity -0- (6,037) (6,037)
. Available-for-Sale (36,978) (47,352) (144,026)
Loans Originated and Principal Repayments, Net (22,673) (35,368) (52,828)
Recoveries of Loans Previously Charged-Off 128 92 171
Proceeds from Sale of Premises and Equipment -0- -0- 567
Proceeds from Sale of Other Real Estate 503 49 559
Purchases of Premises and Equipment (368) (419) (1,023)
-------- -------- ---------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (13,135) 3,152 (42,898)
-------- -------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Increase (Decrease) in Demand Deposits, Savings
Accounts and Interest Bearing Transaction Accounts 2,519 (8,642) 7,488
Net Increase (Decrease) in Certificates of Deposit 20,156 (2,960) 7,558
Net Increase (Decrease) in Repurchase Agreements (3,039) 2,501 14,252
Proceeds from Note Payable -0- 250 -0-
Payments of Cash Dividends (1,276) (1,031) (2,052)
Proceeds from Stock Options Exercised 263 154 219
Purchase of Treasury Stock (1,348) (1,902) (3,169)
-------- -------- ---------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 17,275 (11,630) 24,296
-------- -------- ---------
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS 8,485 (3,618) (7,643)
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD 19,092 26,735 26,735
-------- -------- ---------
CASH AND DUE FROM BANKS AT END OF PERIOD $ 27,577 $ 23,117 $ 19,092
======== ======== =========
SUPPLEMENTAL SCHEDULE OF OPERATING AND INVESTING ACTIVITIES
Interest Paid $ 8,358 $ 6,902 $ 14,232
Income Taxes Paid 2,762 2,419 5,198
Other Real Estate Acquired in Settlement of Loans 242 1,226 2,188
</TABLE>
The accompanying Notes should be read with these financial statements.
7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUMMIT BANCSHARES, INC. AND SUBSIDIARIES
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1999 (UNAUDITED)
NOTE 1 - Summary of Significant Accounting Policies
------
The accounting and reporting policies of Summit Bancshares, Inc. (the
"Corporation") and Subsidiaries are in accordance with the generally
accepted accounting principles and the prevailing practices within the
banking industry. A summary of the more significant policies follows:
Basis of Presentation and Principles of Consolidation
-----------------------------------------------------
The consolidated financial statements of the Corporation include its
accounts and those of its wholly-owned subsidiaries, Summit National
Bank and Summit Community Bank, National Association (the "Subsidiary
Banks") and Summit Bancservices, Inc., a wholly-owned operations
subsidiary. All significant intercompany balances and transactions
have been eliminated in consolidation.
Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting periods. Actual results could differ
from those estimates.
Cash and Due From Banks
-----------------------
The Subsidiary Banks are required to maintain certain balances at the
Federal Reserve Bank based on their levels of deposits. During the
first six months of 2000 the average cash balance maintained at the
Federal Reserve Bank was $1,007,000. Compensating balances held at
correspondent banks, to minimize service charges, averaged
approximately $18,373,000 during the same period.
Investment Securities
---------------------
The Corporation has adopted Statement of Financial Accounting
Standards No. 115, Accounting for Certain Investments in Debt and
Equity Securities ("SFAS 115"). At the date of purchase, the
Corporation is required to classify debt and equity securities into
one of three categories: held-to-maturity, trading or available-for-
sale. At each reporting date, the appropriateness of the
classification is reassessed. Investments in debt securities are
classified as held-to-maturity and measured at amortized cost in the
financial statements only if management has the positive intent and
ability to hold those securities to maturity. Securities that are
bought and held principally for the purpose of selling them in the
near term are classified as trading and measured at fair value in the
financial statements with unrealized gains and losses included in
earnings. Investments not classified as either held-to-maturity or
trading are classified as available-for-sale and measured at fair
value in the financial statements with unrealized gains and losses
reported, net of tax, in a separate component of shareholders' equity
until realized.
The Corporation has the ability and intent to hold to maturity its
investment securities classified as held-to-maturity; accordingly, no
adjustment has been made for the excess, if any, of amortized cost
over market. In determining the investment category classifications at
the time of purchase of securities, management considers its
asset/liability strategy, changes in interest rates and prepayment
risk, the need to increase capital and other factors. Under certain
circumstances (including the deterioration of the issuer's
creditworthiness, a change in tax law, or statutory or regulatory
requirements), the Corporation may change the investment security
classification. In the periods reported for 2000 and 1999 the
Corporation held no securities that would have been classified as
trading securities.
All investment securities are adjusted for amortization of premiums
and accretion of discounts. Amortization of premiums and accretion of
discounts are recorded to income over the contractual maturity or
estimated life of the individual investment on the level yield method.
Gain or loss on sale of investments is based upon the specific
identification method and the gain or loss is recorded in non-interest
income. Income earned on the Corporation's investments in state and
political subdivisions is not taxable.
8
<PAGE>
NOTE 1 - Summary of Significant Accounting Policies (cont'd.)
------
Loans and Allowance for Loan Losses
-----------------------------------
Loans are stated at the principal amount outstanding less unearned
discount and the allowance for loan losses. Unearned discount on
installment loans is recognized as income over the terms of the loans
by a method approximating the interest method. Interest income on all
other loans is recognized based upon the principal amounts
outstanding, the simple interest method. Generally, loan origination
and commitment fees are recognized at the time of funding and are
considered adjustments to interest income. Related direct costs are
not separately allocated to loans but are charged to non-interest
expense in the period incurred. The net effect of not recognizing such
fees and related costs over the life of the related loan is not
considered to be material to the financial statements. The accrual of
interest on a loan is discontinued when, in the opinion of management,
there is doubt about the ability of the borrower to pay interest or
principal. Interest previously earned, but uncollected on such loans,
is written off. After loans are placed on non-accrual all payments
received are applied to principal and no interest income is recorded
until the loan is returned to accrual status or the principal has been
reduced to zero.
The Corporation has adopted Statement of Financial Accounting
Standards No. 114, "Accounting by Creditors for Impairment of a Loan,"
as amended by Statement of Financial Accounting Standards No. 118,
"Accounting by Creditors for Impairment of a Loan - Income Recognition
and Disclosure." Under this standard, the allowance for loan losses
related to loans that are identified for evaluation in accordance with
Statement No. 114 (impaired loans) is based on discounted cash flows
using the loan's initial effective rate or the fair value of the
collateral for certain collateral dependent loans.
The allowance for loan losses is comprised of amounts charged against
income in the form of a provision for loan losses as determined by
management. Management's evaluation is based on a number of factors,
including the Subsidiary Banks' loss experience in relation to
outstanding loans and the existing level of the allowance, prevailing
and prospective economic conditions, and management's continuing
review of the discounted cash flow values of impaired loans and its
evaluation of the quality of the loan portfolio. Loans are charged
against the allowance for loan losses when management believes that
the collectibility of the principal is unlikely.
The evaluation of the adequacy of loan collateral is often based upon
estimates and appraisals. Because of changing economic conditions, the
valuations determined from such estimates and appraisals may also
change. Accordingly, the Corporation may ultimately incur losses which
vary from management's current estimates. Adjustments to the allowance
for loan losses will be reported in the period such adjustments become
known or are reasonably estimable.
Premises and Equipment
----------------------
Premises and equipment are stated at cost less accumulated
depreciation and amortization. Depreciation expense is computed on the
straight-line method based upon the estimated useful lives of the
assets ranging from three to forty years. Maintenance and repairs are
charged to non-interest expenses. Renewals and betterments are added
to the asset accounts and depreciated over the periods benefited.
Depreciable assets sold or retired are removed from the asset and
related accumulated depreciation accounts and any gain or loss is
reflected in the income and expense accounts.
Other Real Estate
-----------------
Other real estate is foreclosed property held pending disposition and
is valued at the lower of its fair value or the recorded investment in
the related loan. At foreclosure, if the fair value, less estimated
costs to sell, of the real estate acquired is less than the
Corporation's recorded investment in the related loan, a writedown is
recognized through a charge to the allowance for loan losses. Any
subsequent reduction in value is recognized by a charge to income.
Operating expenses of such properties, net of related income, and
gains and losses on their disposition are included in non-interest
expense.
Federal Income Taxes
--------------------
The Corporation joins with its Subsidiaries in filing a consolidated
federal income tax return. The Subsidiaries pay to the parent a charge
equivalent to their current federal income tax based on the separate
taxable income of the Subsidiaries.
The Corporation and the Subsidiaries maintain their records for
financial reporting and income tax reporting purposes on the accrual
basis of accounting. Deferred income taxes are provided in accordance
with Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes". Deferred income taxes are provided for accumulated
temporary differences due to basic differences for assets and
liabilities for financial reporting and income tax purposes.
Realization of net deferred tax assets is dependent on generating
sufficient future taxable income. Although realization is not assured,
management believes it is more likely than not that all of the net
deferred tax assets will be realized. The amount of the net deferred
tax asset considered realizable, however, could be reduced in the near
term if estimates of future taxable income are reduced.
Cash and Cash Equivalents
-------------------------
For the purpose of presentation in the Statements of Cash Flows, cash
and cash equivalents are defined as those amounts included in the
balance sheet caption "Cash and Due from Banks."
9
<PAGE>
NOTE 1 - Summary of Significant Accounting Policies (cont'd.)
------
Reclassification
----------------
Certain reclassifications have been made to the 1999 financial
statements to conform to the 2000 presentation.
Earnings Per Common and Common Equivalent Share
-----------------------------------------------
Earnings per common and common equivalent share is calculated by
dividing net income by the weighted average number of common shares
and common share equivalents. Stock options are regarded as common
share equivalents and are therefore considered in earnings per share
calculations, if dilutive. The number of common share equivalents is
determined using the treasury stock method.
Audited Financial Statements
----------------------------
The consolidated balance sheet as of December 31, 1999, and the
consolidated statements of income, changes in shareholders' equity and
cash flows for the year ended December 31, 1999 are headed "unaudited"
in these financial statements. These statements were reported in the
Securities Exchange Commission Form 10-K as of December 31, 1999 as
"audited" but are required to be reflected in these statements as
unaudited because of the absence of an independent auditor's report.
NOTE 2 - Investment Securities
------
A summary of amortized cost and estimated fair values of investment
securities is as follows (in thousands):
<TABLE>
<CAPTION>
June 30, 2000
---------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Investment Securities - Held-to-Maturity
U.S. Treasury Securities $ 5,999 $ 10 $ -0- $ 6,009
U.S. Government Agencies
and Corporations 18,030 -0- (643) 17,387
-------- ---- ------- --------
Total Held-to-Maturity Securities 24,029 10 (643) 23,396
-------- ---- ------- --------
Investment Securities - Available-for-Sale
U.S. Treasury Securities 17,974 24 (50) 17,948
U.S. Government Agencies
and Corporations 92,238 11 (1,707) 90,542
U.S. Government Agency Mortgage
Backed Securities 11,934 10 (257) 11,687
Obligations of States and Political Subdivisions 350 -0- (2) 348
Federal Reserve and Federal Home Loan Bank Stock 1,244 -0- -0- 1,244
-------- ---- ------- --------
Total Available-for-Sale Securities 123,740 45 (2,016) 121,769
-------- ---- ------- --------
Total Investment Securities $147,769 $ 55 $(2,659) $145,165
======== ==== ======= ========
</TABLE>
In the above schedule the amortized cost of Total Held-to-Maturity
Securities of $24,029,000 and the fair value of Total Available-for-Sale
Securities of $121,769,000 are reflected in Investment Securities on the
consolidated balance sheet as of June 30, 2000 for a total of $145,798,000. A
net unrealized loss of $1,971,000 is included in the Available-for-Sale
Investment Securities balance. The unrealized loss, net of tax benefit, is
included in Shareholders' Equity.
10
<PAGE>
NOTE 2 - Investment Securities (cont'd)
------
A summary of amortized cost and estimated fair values of investment
securities is as follows (in thousands):
<TABLE>
<CAPTION>
June 30, 1999
---------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Investment Securities - Held-to-Maturity
U.S. Treasury Securities $ 8,992 $ 100 $ -0- $ 9,092
U.S. Government Agencies
and Corporations 20,055 -0- (263) 19,792
Obligations of States and Political Subdivisions 289 2 -0- 291
--------- ----- ------ ---------
Total Held-to-Maturity Securities 29,336 102 (263) 29,175
--------- ----- ------ ---------
Investment Securities - Available-for-Sale
U.S. Treasury Securities 26,020 186 (22) 26,184
U.S. Government Agencies
and Corporations 65,598 34 (572) 65,060
U.S. Government Agency Mortgage
Backed Securities 15,509 52 (95) 15,466
Obligations of States and Political Subdivisions 455 3 -0- 458
Federal Reserve and Federal Home Loan Bank Stock 1,190 -0- -0- 1,190
--------- ----- ------ ---------
Total Available-for-Sale Securities 108,772 275 (689) 108,358
--------- ----- ------ ---------
Total Investment Securities $ 138,108 $ 377 $ (952) $ 137,533
========= ===== ====== =========
</TABLE>
In the above schedule the amortized cost of Total Held-to-Maturity
Securities of $29,336,000 and the fair value of Total Available-for-Sale
Securities of $108,358,000 are reflected in Investment Securities on the
consolidated balance sheet as of June 30, 1999 for a total of $137,694,000. A
net unrealized loss of $414,000 is included in the Available-for-Sale Investment
Securities balance. The unrealized loss, net of tax benefit, is included in
Shareholders' Equity.
NOTE 3 - Loans and Allowance for Loan Losses
------
The book values of loans by major type follow (in thousands):
<TABLE>
<CAPTION>
June 30,
--------------------------- December 31,
2000 1999 1999
---- ---- ------------
<S> <C> <C> <C>
Commercial $166,919 $157,320 $156,847
Real Estate Mortgage 127,421 111,323 120,596
Real Estate Construction 49,339 37,968 43,875
Loans to Individuals 34,049 32,894 34,261
Less: Unearned Discount (87) (293) (165)
-------- -------- --------
377,641 339,212 355,414
Allowance for Loan Losses (6,899) (4,895) (5,169)
-------- -------- --------
Loans - Net $370,742 $334,317 $350,245
======== ======== ========
</TABLE>
11
<PAGE>
NOTE 3 - Loans and Allowance for Loan Losses (cont'd.)
------
Transactions in the allowance for loan losses are summarized as follows
(in thousands):
<TABLE>
<CAPTION>
Six Months Ended June 30, Year Ended
-------------------------- December 31,
2000 1999 1999
------ ------ ------------
<S> <C> <C> <C>
Balance, Beginning of Period $ 5,169 $ 4,724 $ 4,724
Provisions, Charged to Income 1,728 638 1,001
Loans Charged-Off (126) (559) (727)
Recoveries of Loans Previously
Charged-Off 128 92 171
------- ------- -------
Net Loans (Charged-Off) Recovered 2 (467) (556)
------- ------- -------
Balance, End of Period $ 6,899 $ 4,895 $ 5,169
======= ======= =======
</TABLE>
The provisions for loan losses charged to operating expenses during the
six months ended June 30, 2000 and June 30, 1999 of $1,728,000 and $638,000,
respectively, were considered adequate to maintain the allowance in accordance
with the policy discussed in Note 1. For the year ended December 31, 1999, a
provision of $1,001,000 was recorded.
At June 30, 2000, the recorded investment in loans that are considered
to be impaired under Statement of Financial Accounting Standards No. 114 was
$5,392,000 (of which $5,392,000 were on non-accrual status). The related
allowance for loan losses for these loans was $2,184,000. The average recorded
investment in impaired loans during the six months ended June 30, 2000 was
approximately $3,990,000. For this period the Corporation recognized no interest
income on these impaired loans.
NOTE 4 - Premises and Equipment
------
The investment in premises and equipment stated at cost and net of
accumulated amortization and depreciation is as follows (in thousands):
<TABLE>
<CAPTION>
June 30,
--------------------------- December 31,
2000 1999 1999
------- -------- -----------
<S> <C> <C> <C>
Land $ 2,320 $ 2,783 $ 2,320
Buildings and Improvements 7,784 7,560 7,715
Furniture & Equipment 8,034 7,600 8,003
------- ------- -------
Total Cost 18,138 17,943 18,038
Less: Accumulated Amortization and Depreciation (9,734) (8,979) (9,476)
------- ------- -------
Net Book Value $ 8,404 $ 8,964 $ 8,562
======= ======= =======
</TABLE>
NOTE 5 - Other Real Estate
------
The carrying value of other real estate is as follows (in thousands):
<TABLE>
<CAPTION>
June 30,
--------------------------- December 31,
2000 1999 1999
------- -------- -----------
<S> <C> <C> <C>
Other Real Estate $ 1,343 $ 1,467 $ 1,947
======= ======= =======
</TABLE>
There were direct writedowns of other real estate charged to income for
the six months ended June 30, 2000 of $420,000. There were no direct writedowns
of other real estate for the six months ended June 30, 1999 or for the year
ended December 31, 1999.
12
<PAGE>
NOTE 6 - Deposits
------
The book values of deposits by major type follow (in thousands):
<TABLE>
<CAPTION>
June 30,
---------------------- December 31,
2000 1999 1999
--------- --------- -------------
<S> <C> <C> <C>
Noninterest-Bearing Demand Deposits $ 140,466 $ 128,753 $ 128,685
--------- --------- ---------
Interest-Bearing Deposits:
Interest-Bearing Transaction
Accounts and Money Market Funds 160,085 156,658 154,304
Savings 83,684 80,177 98,728
Savings Certificates - Time 64,656 53,242 58,973
Certificates of Deposits $100,000 or more 53,552 34,290 39,078
Other 778 778 778
--------- --------- ---------
Total 362,755 325,145 351,861
--------- --------- ---------
Total Deposits $ 503,221 $ 453,898 $ 480,546
========= ========= =========
</TABLE>
NOTE 7 - Securities Sold Under Repurchase Agreements
------
Securities sold under repurchase agreements generally represent borrowings
with maturities ranging from one to thirty days. Information relating to these
borrowings is summarized as follows (in thousands):
<TABLE>
<CAPTION>
Six Months Ended June 30, Year Ended
------------------------- December 31,
2000 1999 1999
--------- ---------- ------------
<S> <C> <C> <C>
Securities Sold Under Repurchase Agreements:
Average $ 22,437 $ 16,806 $ 20,488
Period-End 19,052 20,340 28,091
Maximum Month-End Balance During Period 25,019 20,340 30,309
Interest Rate
Average 4.98% 3.77% 4.04%
Period-End 6.06 3.83 3.38
</TABLE>
The Corporation, through one of its subsidiaries, has available a line of
credit with the Federal Home Loan Bank of Dallas which allows the subsidiary to
borrow on a collateralized basis at a fixed term. At June 30, 2000, the
subsidiary had borrowed $10,000,000 bearing an interest rate of 6.77% and having
a maturity of September 22, 2000. Also, at December 31, 1999, the subsidiary
had borrowed $4,000,000 under the line of credit, bearing an interest rate of
5.43% and having a maturity of April 2000.
NOTE 8 - Notes Payable
------
On July 15, 1999, the Corporation obtained lines of credit from a bank under
which the Corporation may borrow $9,000,000 at prime rate. The lines of credit
are secured by stock of one of the Subsidiary Banks and mature in July 2000,
whereupon, if balances are outstanding, the lines convert to term notes having
five year terms. The Corporation will not pay a fee for any unused portion of
the lines. As of June 30, 2000, no funds had been borrowed under these lines
nor were outstanding.
13
<PAGE>
NOTE 9 - Other Non-Interest Expense
------
The significant components of other non-interest expense are as follows (in
thousands):
Six Months Ended June 30, Year Ended
-------------------------- December 31,
2000 1999 1999
------- ------- -----------
Business Development $ 360 $ 269 $ 602
Legal and Professional Fees 390 288 619
Printing and Supplies 190 196 379
Regulatory Fees and Assessments 116 91 183
Other 1,144 916 1,875
------- ------- -------
Total $ 2,200 $ 1,760 $ 3,658
======= ======= =======
NOTE 10 - Income Taxes
-------
Federal income taxes included in the consolidated balance sheets were as
follows (in thousands):
June 30,
-------------------------- December 31,
2000 1999 1999
------- ------- ------------
Current Tax Asset (Liability) $ (46) $ 38 $ (70)
Deferred Tax Asset 3,030 1,517 2,257
------- ------- -------
Total Included in Other Assets $ 2,984 $ 1,555 $ 2,187
======= ======= =======
The deferred tax asset at June 30, 2000 of $3,030,000 included $672,000
related to unrealized losses on Available-for-Sale Securities.
The components of income tax expense were as follows (in thousands):
Six Months Ended June 30, Year Ended
-------------------------- December 31,
2000 1999 1999
------- ------- ------------
Federal Income Tax Expense
Current $ 2,739 $ 2,391 $ 5,278
Deferred (benefit) (713) (115) (385)
------- ------- -------
Total Federal Income Tax Expense $ 2,026 $ 2,276 $ 4,893
======= ======= =======
Effective Tax Rates 34.8% 34.6% 34.7%
======= ======= =======
The reasons for the difference between income tax expense and the amount
computed by applying the statutory federal income tax rate to operating earnings
are as follows (in thousands):
Six Months Ended June 30, Year Ended
-------------------------- December 31,
2000 1999 1999
------- ------- ------------
Federal Income Taxes at Statutory
Rate of 34.3% $ 2,000 $ 2,258 $ 4,847
Effect of Tax Exempt Interest Income (4) (6) (12)
Non-deductible Expenses 32 25 64
Other (2) (1) (6)
------- ------- -------
Income Taxes Per Income Statement $ 2,026 $ 2,276 $ 4,893
======= ======= =======
14
<PAGE>
NOTE 10 - Income Taxes (con't)
-------
<TABLE>
<CAPTION>
Six Months Ended June 30, Year Ended
------------------------- December 31,
2000 1999 1999
------- ------- ------------
<S> <C> <C> <C>
Federal Deferred Tax Assets:
Allowance for Loan Losses $ 1,927 $ 1,221 $ 1,357
Valuation Reserves - Other Real Estate 144 1 -0-
Interest on Non-accrual Loans 214 173 189
Deferred Compensation 463 417 458
Unrealized Losses on Available-for-Sale Securities 672 141 611
Other 7 16 19
------- ------- -------
Gross Federal Deferred Tax Assets 3,427 1,969 2,634
------- ------- -------
Federal Deferred Tax Liabilities:
Depreciation and Amortization 312 297 321
Accretion 85 45 56
Other -0- 110 -0-
------- ------- -------
Gross Federal Deferred Tax Liabilities 397 452 377
------- ------- -------
Net Deferred Tax Asset $ 3,030 $ 1,517 $ 2,257
======= ======= =======
</TABLE>
NOTE 11 - Related Party Transactions
-------
The Subsidiary Banks have transactions made in the ordinary course of
business with certain of its officers, directors and their affiliates. All loans
included in such transactions are made on substantially the same terms,
including interest rate and collateral, as those prevailing at the time for
comparable transactions with other persons. Total loans outstanding to such
parties amounted to approximately $3,488,000 at December 31, 1999.
NOTE 12 - Commitments and Contingent Liabilities
-------
In the normal course of business, there are various outstanding commitments
and contingent liabilities, such as guarantees and commitments to extend credit,
which are not reflected in the financial statements. No losses are anticipated
as a result of these transactions. Commitments are most frequently extended for
real estate, commercial and industrial loans.
At June 30, 2000, outstanding documentary and standby letters of credit
totaled $3,697,000 and commitments to extend credit totaled $137,012,000.
NOTE 13 - Stock Option Plans
-------
The Corporation has two Incentive Stock Option Plans, the 1993 Plan and the
1997 Plan, ("the Plans"). Each Plan has reserved 600,000 shares (adjusted for
two-for-one stock splits in 1995 and 1997) of common stock for grants
thereunder. The Plans provide for the granting to executive management and
other key employees of Summit Bancshares, Inc. and subsidiaries incentive stock
options, as defined under the current tax law. The options under the Plans will
be exercisable for ten years from the date of grant and generally vest ratably
over a five year period. Options will be and have been granted at prices which
will not be less than 100-110% of the fair market value of the underlying common
stock at the date of grant.
The Corporation applies APB Opinion No. 25 and related Interpretations in
accounting for its plans. Since the option prices are considered to approximate
fair market value at date of grant, no compensation expense has been reported.
Had compensation cost for these plans been determined consistent with Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" the Corporation's net income and earnings per share would have
been reduced by insignificant amounts on a proforma basis for the year ended
December 31, 1999, and the six months ended June 30, 2000.
15
<PAGE>
NOTE 13 - Stock Option Plans (con't)
-------
The following is a summary of transactions during the periods presented:
Shares Under Option
-----------------------------------
Six Months
Ended Year Ended
June 30, 2000 December 31, 1999
--------------- ------------------
Outstanding, Beginning of Period 445,497 461,717
Additional Options Granted During
the Period 10,000 49,500
Forfeited During the Period (17,500) (2,400)
Exercised During the Period (71,238) (63,320)
------- -------
Outstanding, End of Period 366,759 445,497
======= =======
Options outstanding at June 30, 2000 ranged in price from $3.00 to $19.25
per share with a weighted average exercise price of $9.70 and 284,927 shares
exercisable. At June 30, 1999, there remained 490,300 shares reserved for
future grants of options under the 1997 Plan. There are no shares available for
grant under the 1993 Plan.
NOTE 14 - Employee Benefit Plans
-------
Pension Plan
------------
The Corporation had a defined benefit pension plan covering substantially
all of its employees. The benefits were based on years of service and the
employee's compensation history. The employee's compensation used in the
benefit calculation were the highest average for any five consecutive years of
employment within the employee's last ten years of employment.
Effective August 31, 1998, the accrual of benefits under this plan were
suspended. In February 1999, the Board of Directors chose to terminate the plan
effective April 15, 1999. The assets held in trust were distributed to the plan
participants in mid-1999 under terms of the plan.
During 1999 the Corporation expensed $321,000 in support of the plan.
401(k) Plan
-----------
The Corporation implemented a 401(k) plan in December 1997 covering
substantially all employees. The Corporation made no contribution to this plan
in 1999 or 1998. In 2000, the Corporation will make matching contributions to
the participant's deferrals of compensation up to 100% of the employee
contributions not to exceed 6% of the employee's annual compensation.
For the first six months of 2000, the Corporation expensed $186,000 in
support of the plan.
Management Security Plan
------------------------
In 1992, the Corporation established a Management Security Plan to provide
key employees with retirement, death or disability benefits in addition to those
provided by the Pension Plan. The expense charged to operations for such future
obligations was $94,000 and $103,000 during the first six months of 2000 and
1999, respectively, and $223,000 for the year 1999.
Other Post Retirement Benefits
------------------------------
The Corporation provides certain health care benefits for certain retired
employees who bear all costs of these benefits. These benefits are covered
under the "Consolidated Omnibus Budget Reconciliation Act" (COBRA).
16
<PAGE>
NOTE 15 - Earnings per Share
-------
The following data shows the amounts used in computing earnings per share
and the weighted average number of shares of dilutive potential common stock.
The number of shares used in the calculations reflect a two-for-one stock split
in December 1997 (dollars in thousands)
June 30,
---------------------- December 31,
2000 1999 1999
---- ---- ------------
Net income $ 3,797 $ 4,307 $ 9,222
========== ========== ==========
Weighted average number of common
shares used in Basic EPS 6,373,667 6,439,205 6,410,762
Effect of dilutive stock options 156,947 249,749 244,787
---------- ---------- ----------
Weighted number of common shares
and dilutive potential common
stock used in Diluted EPS 6,530,614 6,688,954 6,655,549
========== ========== ==========
NOTE 16 - Financial Instruments with Off-Balance Sheet Risk
-------
The Corporation is a party to financial instruments with off-balance sheet
risk in the normal course of business to meet the financing needs of its
customers. These financial instruments include loan commitments, standby
letters of credit and documentary letters of credit. The instruments involve,
to varying degrees, elements of credit and interest rate risk in excess of the
amount recognized in the financial statements.
The Corporation's exposure to credit loss in the event of non-performance by
the other party of these loan commitments and standby letters of credit is
represented by the contractual amount of those instruments. The Corporation
uses the same credit policies in making commitments and conditional obligations
as it does for on-balance sheet instruments.
The total contractual amounts of financial instruments with off-balance sheet
risk are as follows (in thousands):
June 30,
--------------------
2000 1999
-------- --------
Financial Instruments Whose
Contract Amounts Represent
Credit Risk:
Commitments to Extend Credit $137,012 $118,199
Documentary and Standby
Letters of Credit 3,697 4,032
Since many of the loan commitments may expire without being drawn upon, the
total commitment amount does not necessarily represent future cash requirements.
The Corporation evaluates each customer's credit worthiness on a case-by-case
basis. The amount of collateral obtained, if deemed necessary by the
Corporation upon extension of credit, is based on management's credit evaluation
of the counterparty. Collateral held varies but may include accounts
receivable, inventory, property, plant and equipment, owner occupied real estate
and income-producing commercial properties.
The credit risk involved in issuing letters of credit is essentially the
same as that involved in extending loan facilities to customers.
NOTE 17 - Concentrations of Credit Risk
-------
The Subsidiary Banks grant commercial, consumer and real estate loans in
their direct market which is defined as Fort Worth and its surrounding area. The
Board of Directors of each Subsidiary Bank monitors concentrations of credit by
purpose, collateral and industry at least quarterly. Certain limitations for
concentration are set by the Boards. Additional loans in excess of these limits
must have prior approval of the bank's directors' loan committee. Although its
Subsidiary Banks have diversified loan portfolios, a substantial portion of its
debtors' abilities to honor their contracts is dependent upon the strength of
the local and state economy.
17
<PAGE>
NOTE 18 - Litigation
-------
Certain of the Subsidiary Banks are involved in legal actions arising in
the ordinary course of business. It is the opinion of management, after
reviewing such actions with outside legal counsel, that the settlement of these
matters will not materially affect the Corporation's financial position.
NOTE 19 - Stock Repurchase Plan
-------
On April 18, 2000, the Board of Directors approved a stock repurchase plan.
The plan authorized management to purchase up to 322,232 shares of the
Corporation's common stock over the next twelve months through the open market
or in privately negotiated transactions in accordance with all applicable state
and federal laws and regulations.
In the six months of 2000, 80,207 shares were purchased by the Corporation
through a similar repurchase plan through the open market.
NOTE 20 - Subsequent Event
-------
On July 18, 2000, the Board of Directors of the Corporation approved a
quarterly dividend of $.10 per share to be paid on August 15, 2000 to
shareholders of record on August 1, 2000.
18
<PAGE>
NOTE 21 - Fair Values of Financial Instruments
-------
The following methods and assumptions were used by the Corporation in
estimating its fair value disclosures for financial instruments:
Cash and cash equivalents: The carrying amounts reported in the balance
sheet for cash and due from banks and federal funds sold approximate those
assets' fair values.
Investment securities (including mortgage-backed securities): Fair values
for investment securities are based on quoted market prices, where
available. If quoted market prices are not available, fair values are
based on quoted market prices of comparable instruments.
Loans: For variable-rate loans, fair values are based on carrying values.
The fair values for fixed rate loans such as mortgage loans (e.g., one-to-
four family residential) and installment loans are estimated using
discounted cash flow analysis. The carrying amount of accrued interest
receivable approximates its fair value.
Deposit liabilities: The fair value disclosed for interest bearing and
noninterest-bearing demand deposits, passbook savings, and certain types of
money market accounts are, by definition, equal to the amount payable on
demand at the reporting date or their carrying amounts. Fair values for
fixed-rate certificates of deposit are estimated using a discounted cash
flow calculation that applies interest rates currently being offered on
certificates to a schedule of aggregated expected monthly maturities on
time deposits.
Short-term borrowings: The carrying amounts of borrowings under repurchase
agreements approximate their fair values.
The estimated fair values of the Corporation's financial instruments are as
follows (in thousands):
<TABLE>
<CAPTION>
June 30,
------------------------------------------
2000 1999
------------------ --------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
------ ----- ------ -----
<S> <C> <C> <C> <C>
Financial Assets
Cash and due from banks $ 27,577 $ 27,577 $ 23,117 $ 23,117
Federal funds sold 19,245 19,245 8,980 8,980
Securities 145,798 145,165 137,694 137,533
Loans 377,641 373,696 339,212 340,327
Reserve for loan losses (6,899) (6,899) (4,895) (4,895)
Financial Liabilities
Deposits 503,221 502,835 453,898 454,166
Securities sold under repurchase
agreements 29,052 29,052 20,340 20,340
Note Payable -0- -0- 250 250
Off-balance Sheet Financial Instruments
Loan commitments 137,012 118,199
Letters of credit 3,697 4,032
</TABLE>
NOTE 22 - Comprehensive Income
-------
The Corporation has adopted Financial Accounting Standards Board ("FASB")
Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive
Income". This new standard requires an entity to report and display
comprehensive income and its components. Comprehensive income is as follows (in
thousands):
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
--------------------------------- Year Ended
2000 1999 December 31, 1999
---- ---- -----------------
<S> <C> <C> <C>
Net Income $ 3,797 $ 4,307 $ 9,222
Other Comprehensive Income:
Unrealized loss on securities
available-for-sale, net of tax (112) (833) (1,746)
------- ------- -------
Comprehensive Income $ 3,685 $ 3,474 $ 7,476
======= ======= =======
</TABLE>
19
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations
---------------------
Summary
-------
Management's Discussion and Analysis of Financial Condition and Results of
Operations of the Corporation analyzes the major elements of the Corporation's
consolidated balance sheets and statements of income. This discussion should be
read in conjunction with the consolidated financial statements and accompanying
notes .
Net income for the second quarter of 2000 was $1,347,000, or $.21 diluted
earnings per share, compared with $2,211,000, or $.33 diluted earnings per
share, for the second quarter of 1999. Net income for the first six months of
2000 was $3,797,000, or $.58 diluted earnings per share, compared with
$4,307,000, or $.64 diluted earnings per share, for the first six months of the
prior year. On a per share basis, diluted earnings per shares decreased 36.4%
over the second quarter of the prior year. Per share amounts are based on
average shares outstanding of 6,530,614 for the first six months of 2000 and
6,688,954 for the comparable period of 1999 adjusted to reflect stock options
granted.
Outstanding loans at June 30, 2000 of $ 377.6 million represented an
increase of $38.4 million, or 11.3%, over June 30,1999 and an increase of $22.2
million, or 6.3%, from December 31, 1999.
Total deposits at June 30, 2000 of $503.2 million represented an increase
of $49.3 million, or 10.9%, over June 30,1999 and an increase of $22.7 million,
or 4.7%, from December 31, 1999.
In the second quarter, net interest income increased 8.3% over the previous
year. The Provision for Loan Losses increased $1,078,000 in the quarter over the
same period of the prior year. Non-interest expense increased $771,000 or 21.0%
in the second quarter over that of the same period in the prior year and
included an increase in Other Real Estate Owned expense of $370,000.
The following table summarizes the Corporation's performance for the three
months and six months ended June 30, 2000 and 1999 (tax equivalent basis and
dollars in thousands).
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest Income $11,554 $9,725 $22,707 $19,124
Interest Expense 4,443 3,157 8,534 6,411
------- ------ ------- -------
Net Interest Income 7,111 6,568 14,173 12,713
Provision for Loan Loss 1,496 418 1,728 638
------- ------ ------- -------
Net Interest Income After
Provision for Loan Loss 5,615 6,150 12,445 12,075
Non-Interest Income 918 902 1,826 1,933
Non-Interest Expense 4,449 3,678 8,442 7,416
------- ------ ------- -------
Income Before Income Tax 2,084 3,374 5,829 6,592
Income Tax Expense 737 1,163 2,032 2,285
------- ------ ------- -------
Net Income $ 1,347 $2,211 $ 3,797 $ 4,307
======= ====== ======= =======
Net Income per Share-
Basic $ .22 $ .34 $ .60 $ .67
Diluted .21 .33 .58 .64
Return on Average Assets .95% 1.71% 1.34% 1.67%
Return on Average Stockholders' Equity 10.81% 18.89% 15.40% 18.59%
</TABLE>
20
<PAGE>
Summary of Earning Assets and Interest-Bearing Liabilities
----------------------------------------------------------
The following schedule presents average balance sheets that highlight earning
assets and interest-bearing liabilities and their related rates earned and paid
for the second quarter of 2000 and 1999 (rates on tax equivalent basis).
<TABLE>
<CAPTION>
Three Months Ended June 30,
--------------------------------------------------------------------
2000 1999
-------------------------------- ---------------------------------
Average Average Average Average
Balances Interest Yield/Rate Balances Interest Yield/Rate
--------- -------- ---------- --------- -------- -----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Earning Assets:
Federal Funds Sold & Due From Time $ 13,986 $ 219 6.30% $ 12,930 $ 156 4.84%
Investment Securities (Taxable) 147,212 2,291 6.26 138,384 2,019 5.85
Investment Securities (Tax-exempt) 350 7 7.62 745 13 7.11
Loans, Net of Unearned Discount/(1)/ 373,251 9,037 9.74 330,685 7,537 9.14
-------- ------- -------- ------
Total Earning Assets 534,799 11,554 8.69 482,744 9,725 8.08
------- ------
Non-interest Earning Assets:
Cash and Due From Banks 24,250 23,095
Other Assets 19,488 18,850
Allowance for Loan Losses (5,524) (4,720)
-------- --------
Total Assets $573,013 $519,969
======== ========
Interest-Bearing Liabilities:
Interest-Bearing Transaction
Accounts and Money Market Funds $160,178 1,538 3.86 $153,200 1,188 3.11
Savings 89,170 1,029 4.64 82,527 792 3.85
Savings Certificates 61,397 825 5.40 52,674 597 4.54
Certificates of Deposit
$100,000 or more 47,636 670 5.66 34,722 413 4.77
Other Time 778 11 5.56 778 10 5.05
Other Borrowings 26,182 370 5.69 16,569 157 3.80
-------- ------- -------- ------
Total Interest-Bearing Liabilities 385,341 4,443 4.64 340,470 3,157 3.72
------- ------
Non-interest Bearing Liabilities:
Demand Deposits 136,250 130,200
Other Liabilities 1,347 2,735
Shareholders' Equity 50,075 46,564
-------- --------
Total Liabilities and
Shareholders' Equity $573,013 $519,969
======== ========
Net Interest Income and Margin
(Tax-equivalent Basis)/(2)/ $ 7,111 5.35 $6,568 5.46
======= ======
</TABLE>
(1) Loan interest income includes fees and loan volumes include loans on non-
accrual.
(2) Presented on a tax equivalent basis ("T/E") using a federal income tax rate
of 34% in both years.
21
<PAGE>
The following schedule presents average balance sheets that highlight
earning assets and interest-bearing liabilities and their related rates earned
and paid for the six months ended June 30, 2000 and 1999 (rates on tax
equivalent basis).
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------------------------------------------------------------------
2000 1999
-------------------------------- ---------------------------------
Average Average Average Average
Balances Interest Yield/Rate Balances Interest Yield/Rate
--------- -------- ---------- --------- -------- -----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Earning Assets:
Federal Funds Sold & Due From Time $ 13,527 $ 403 6.00% $ 19,135 $ 459 4.82%
Investment Securities (Taxable) 147,807 4,570 6.22 141,868 4,091 5.82
Investment Securities (Tax-exempt) 421 16 7.45 817 28 7.08
Loans, Net of Unearned Discount/(1)/ 369,001 17,718 9.66 321,058 14,546 9.14
-------- ------- -------- -------
Total Earning Assets 530,756 22,707 8.60 482,878 19,124 7.99
------- -------
Non-interest Earning Assets:
Cash and Due From Banks 24,182 23,186
Other Assets 19,391 18,870
Allowance for Loan Losses (5,416) (4,754)
-------- --------
Total Assets $568,913 $520,180
======== ========
Interest-Bearing Liabilities:
Interest-Bearing Transaction
Accounts & Money Market Funds $160,012 2,970 3.73 $153,973 2,400 3.14
Savings 92,614 2,088 4.53 82,723 1,607 3.92
Savings Certificates 60,003 1,552 5.20 52,949 1,211 4.61
Certificates of Deposit
$100,000 or more 43,456 1,182 5.47 35,407 856 4.88
Other Time 778 21 5.47 778 20 5.13
Other Borrowings 27,832 721 5.21 16,900 317 3.78
-------- ------- -------- -------
Total Interest-Bearing Liabilities 384,695 8,534 4.46 342,730 6,411 3.77
------- -------
Non-interest Bearing Liabilities:
Demand Deposits 133,224 128,363
Other Liabilities 1,403 2,548
Shareholders' Equity 49,591 46,539
-------- --------
Total Liabilities and
Shareholders' Equity $568,913 $520,180
======== ========
Net Interest Income and Margin
(Tax-equivalent Basis)/(2)/ $14,173 5.37 $12,713 5.31
======= =======
</TABLE>
(1) Loan interest income includes fees and loan volumes include loans on non-
accrual.
(2) Presented on a tax equivalent basis ("T/E") using a federal income tax rate
of 34% in both years.
22
<PAGE>
Net Interest Income
-------------------
Net interest income (tax equivalent) for the second quarter of 2000 was $
7,111,000 which represented an increase of $543,000, or 8.3%, over the second
quarter of 1999. This increase was heavily contributed to by a 12.9% increase in
average loans for the second quarter of 2000 versus the same quarter last year.
The following table summarizes the effects of changes in interest rates,
average volumes of earning assets and interest bearing liabilities on net
interest income (tax equivalent) for the periods ended June 30, 2000 and 1999.
<TABLE>
<CAPTION>
ANALYSIS OF CHANGES IN NET INTEREST INCOME
(Dollars in Thousands)
2nd Qtr. 2000 vs. 2nd Qtr. 1999 Six Months 2000 vs. Six Months 1999
Increase (Decrease) Increase (Decrease)
Due to Changes in: Due to Changes in:
-------------------------------- -------------------------------------
Volume Rate Total Volume Rate Total
---------- -------- --------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Interest Earning Assets:
Federal Funds Sold $ 13 $ 50 $ 63 $ (277) $ 221 $ (56)
Investment Securities (Taxable) 130 142 272 181 298 479
Investment Securities (Tax-exempt) (12) 6 (6) (16) 4 (12)
Loans, Net of Unearned Discount 993 507 1,500 2,297 875 3,172
------ ------ ------- ------- ------- -------
Total Interest Income 1,124 705 1,829 2,185 1,398 3,583
------ ------ ------- ------- ------- -------
Interest-Bearing Liabilities:
Deposits 361 712 1,073 623 1,096 1,719
Other Borrowings 115 98 213 255 149 404
------ ------ ------- ------- ------- -------
Total Interest Expense 476 810 1,286 878 1,245 2,123
------ ------ ------- ------- ------- -------
Net Interest Income $ 648 $ (105) $ 543 $ 1,307 $ 153 $ 1,460
====== ====== ======= ======= ======= =======
</TABLE>
Allowance for Loan Losses and Non-Performing Assets
---------------------------------------------------
The Corporation's allowance for loan losses was $6,899,000 or 1.83% of total
loans, as of June 30, 2000 compared to $4,895,000, or 1.44% of total loans, as
of June 30,1999.
Transactions in the provision for loan losses are summarized as follows (in
thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------------
2000 1999 2000 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
Balance, Beginning of Period $ 5,440 $ 4,749 $ 5,169 $ 4,724
Provisions, Charged to Income 1,496 418 1,728 638
Loans Charged-Off (95) (325) (126) (559)
Recoveries of Loans Previously
Charged-Off 58 53 128 92
------- ------- ------- -------
Net Loans (Charged-Off)
Recovered (37) (272) 2 (467)
------- ------- ------- -------
Balance, End of Period $ 6,899 $ 4,895 $ 6,899 $ 4,895
======= ======= ======= =======
</TABLE>
For the six months ended June 30, 2000 and 1999, net charge-offs
(recoveries) were (.00)% and .14% of loans, respectively, not annualized.
23
<PAGE>
The following table summarizes the non-performing assets as of the end of
the last five quarters (in thousands).
<TABLE>
<CAPTION>
June 30, March 31, December 31, September 30, June 30,
2000 2000 1999 1999 1999
-------- --------- ------------ ------------- --------
<S> <C> <C> <C> <C> <C>
Non-Accrual Loans $5,440 $2,518 $2,450 $2,899 $2,952
Renegotiated Loans 1 2 3 -0- -0-
Other Real Estate Owned 1,343 1,945 1,947 1,494 1,467
------ ------ ------ ------ ------
Total Non-Performing Assets $6,784 $4,465 $4,400 $4,393 $4,419
====== ====== ====== ====== ======
<CAPTION>
June 30, March 31, December 31, September 30, June 30,
2000 2000 1999 1999 1999
-------- --------- ------------ ------------- --------
<S> <C> <C> <C> <C> <C>
As a Percent of:
Total Assets 1.16% .77% .78% .80% .84%
Total Loans and Other Real Estate 1.79 1.20 1.23 1.26 1.30
Loans Past Due 90 days or
More and Still Accruing $ -0- $ 105 $ -0- $ -0- $ 17
</TABLE>
Non-accrual loans to total loans were 1.44% at June 30, 2000 and non-
performing assets were 1.79% of loans and other real estate owned at the same
date.
As of June 30, 2000, the Company had two large credits that were on non-
accrual loan status and represented 90% of the Company's non-performing loans.
The first with a balance of approximately $1.5 million has been on non-accrual
status since the second quarter of 1998. The balance of this loan has been
reduced from approximately $2.1 million as the borrower has continued to make
monthly payments. These payments, principal and interest, have reduced the
balance. The second large credit was placed on non-accrual status in the second
quarter. This loan has a balance of approximately $3.4 million and some amount
of charge-off is expected on this credit before year-end.
The balance of Other Real Estate Owned as of June 30, 2000, was $1,343,000.
In the second quarter the Company wrote-down (expensed) $412,000 of one
property, added a second property with a value of $230,000 and sold a property
that had a value of $425,000. The write-down of the first property resulted in
a carrying value of approximately $1.0 million for that property. This
property, which was foreclosed in early 1999 after being constructed, had an
original value of $1.6 million and is being aggressively marketed.
The following table summarizes the relationship between non-performing
loans, criticized loans and the allowance for loan losses (dollars in
thousands).
<TABLE>
<CAPTION>
June 30, March 31, December 31, September 30, June 30,
2000 2000 1999 1999 1999
-------- --------- ------------ ------------- --------
<S> <C> <C> <C> <C> <C>
Non-Performing Loans $ 5,441 $ 2,520 $ 2,453 $2,899 $2,952
Criticized Loans 13,064 12,367 11,804 9,196 9,755
Allowance for Loan Losses 6,899 5,440 5,169 5,044 4,895
Allowance for Loan Losses
as a Percent of:
Non-Performing Loans 127% 216% 211% 174% 166%
Criticized Loans 53 44 44 55 50
</TABLE>
24
<PAGE>
Non-interest Income
-------------------
The major component of non-interest income is service charges on deposits.
Other service fees are the majority of other non-interest income.
The following table reflects the changes in non-interest income during the
periods presented (dollars in thousands).
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2000 1999 % Change 2000 1999 % Change
----- ----- --------- ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Service Charges on Deposit Accounts $ 488 $ 489 (.2)% $ 970 $ 967 .3%
Non-recurring Income 4 46 (91.3) 65 244 (73.4)
Other Non-interest Income 426 367 16.1 791 722 9.6
----- ----- ----- ------ ------ -----
Total Non-interest Income $ 918 $ 902 1.8 $1,826 $1,933 (5.5)
===== ===== ====== ======
</TABLE>
Non-recurring income is primarily interest recovered on loans charged-off
in prior years and gains on sales of assets taken in satisfaction of debt in
prior years. The increase in other non-interest income in the second quarter of
2000 is primarily due to increases in mortgage brokerage/origination fees and
fees earned on investment services to customers.
Non-interest Expense
--------------------
Non-interest expenses include all expenses other than interest expense,
provision for loan losses and income tax expense.
The following table summarizes the changes in non-interest expense during
the periods presented (dollars in thousands).
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ---------------------------
2000 1999 % Change 2000 1999 % Change
------ ------ ---------- ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Salaries & Employee Benefits $2,332 $2,350 (.8)% $4,689 $4,491 4.4%
Occupancy Expense - Net 247 305 (19.0) 505 550 (8.2)
Furniture and Equipment Expense 354 307 15.3 692 590 17.3
Other Real Estate Expense - Net 368 (2) -- 356 25 --
Other Expenses:
Business Development 184 145 26.9 360 269 33.8
Insurance - Other 25 36 (30.6) 52 71 (26.8)
Legal & Professional Fees 202 121 66.9 390 288 35.4
Taxes - Other 44 47 (6.4) 100 112 (10.7)
Postage & Courier 82 80 2.5 165 158 4.4
Printing & Supplies 90 91 (1.1) 190 196 (3.1)
Regulatory Fees & Assessments 56 45 24.4 116 91 27.5
Other Operating Expenses 465 153 203.9 827 575 43.8
------ ------ ------ ------
Total Other Expenses 1,148 718 59.9 2,200 1,760 25.0
------ ------ ------ ------
Total Non-interest Expense $4,449 $3,678 21.0 $8,442 $7,416 13.8
====== ====== ====== ======
</TABLE>
Total non-interest expense increased 21.0% in the second quarter of 2000
over 1999, reflecting increases primarily in furniture and equipment expense,
other real estate expense, business development expense, and legal and
professional expense. As a percent of average assets, non-interest expenses
were 3.18% in the second quarter of 2000 and 2.84% in the same period of 1999.
The "efficiency ratio" (non-interest expenses divided by total non-interest
income plus net interest income) was 55.88% for the second quarter of 2000.
The increase in the second quarter in Other Real Estate Expense reflects
the write-down of the carrying value of foreclosed real property and is net of
a gain on sale of another property of approximately $77,000.
The increase in furniture and fixtures primarily is a result of an increase
in equipment maintenance expense.
An increase in advertising expense and customer relations expense is
reflected in the increase in business development expenses.
Legal and Profession Fees increased in the second quarter 2000 over the
prior year because of increases in attorney fees related to credit issues and
consultant fees related to new product development.
Other Operating Expenses in the second quarter of 1999 were somewhat lower
than normal due to decreases in various miscellaneous operating expenses.
25
<PAGE>
Interest Rate Sensitivity
-------------------------
Interest rate sensitivity is the relationship between changes in market
interest rates and net interest income due to the repricing characteristics of
assets and liabilities.
The following table, commonly referred to as a "static gap report",
indicates the interest rate sensitivity position at June 30, 2000 and may not be
reflective of positions in subsequent periods (dollars in thousands):
<TABLE>
<CAPTION>
Total Repriced
Rate After
Matures or Reprices within: Sensitive 1 Year or
------------------------------------------
30 Days 31-180 181 to One Year Non-interest
or Less Days One Year or Less Sensitive Total
------------- ------------ --------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Earning Assets:
Loans $207,490 $ 21,351 $ 19,367 $248,208 $129,433 $377,641
Investment Securities 2,887 11,949 12,355 27,191 118,607 145,798
Federal Funds Sold 19,245 -0- -0- 19,245 -0- 19,245
-------- -------- -------- -------- -------- --------
Total Earning Assets 229,622 33,300 31,722 294,644 248,040 542,684
-------- -------- -------- -------- -------- --------
Interest Bearing Liabilities:
Interest-Bearing Transaction
Accounts and Savings 243,769 -0- -0- 243,769 -0- 243,769
Certificate of Deposits
>$100,000 7,221 24,760 14,345 46,326 7,226 53,552
Other Time Deposits 5,928 23,712 18,897 48,537 16,897 65,434
Short Term Borrowings 29,052 -0- -0- 29,052 -0- 29,052
-------- -------- -------- -------- -------- --------
Total Interest Bearing
Liabilities 285,970 48,472 33,242 367,684 24,123 391,807
-------- -------- -------- -------- -------- --------
Interest Sensitivity
Gap $(56,348) $(15,172) $ (1,520) $(73,040) $223,917 $150,877
======== ======== ======== ======== ======== ========
Cumulative Gap $(56,348) $(71,520) $(73,040)
======== ======== ========
Cumulative Gap to
Total Earning Assets (10.4%) (13.2%) (13.5%)
Cumulative Gap to
Total Assets (9.6%) (12.2%) (12.5%)
</TABLE>
The preceding static gap report reflects a cumulative liability sensitive
position during the one year horizon. An inherent weakness of this report is
that it ignores the relative volatility any one category may have in relation to
other categories or market rates in general. For instance, the rate paid on NOW
accounts typically moves slower than the three month T-Bill. Management
attempts to capture this relative volatility by utilizing a simulation model
with a "beta factor" adjustment which estimates the volatility of rate sensitive
assets and/or liabilities in relation to other market rates.
Beta factors are an estimation of the long term, multiple interest rate
environment relation between an individual account and market rates in general.
For instance, NOW, savings and money market accounts, which are repriceable
within 30 days will have considerably lower beta factors than variable rate
loans and most investment categories. Taking this into consideration, it is
quite possible for a bank with a negative cumulative gap to total asset ratio to
have a positive "beta adjusted" gap risk position.
As a result of applying the beta factors established by management to the
earning assets and interest bearing liabilities in the static gap report via a
simulation model, the negative cumulative gap to total assets ratio at one year
of (12.5%) was reversed to a positive 7.3% "beta adjusted" gap position.
Management feels that the "beta adjusted" gap risk technique more accurately
reflects the Corporation's gap position.
Capital
-------
The Federal Reserve Board has guidelines for capital to total assets
(leverage) and capital standards for bank holding companies. The Comptroller of
the Currency also has similar guidelines for national banks. These guidelines
require a minimum level of Tier I capital to total assets of 3 percent. A
banking organization operating at or near these levels is expected to have well-
diversified risk, excellent asset quality, high liquidity, good earnings and in
general be considered a strong banking organization. Organizations not meeting
these characteristics are expected to operate well above these minimum capital
standards. Thus, for all but the most highly rated organizations, the minimum
Tier I leverage ratio is to be 3 percent plus minimum additional cushions of at
least 100 to 200 basis points. At the discretion of the regulatory authorities,
additional capital may be required.
26
<PAGE>
Capital (con't)
-------
The Federal Reserve Board and Comptroller of the Currency also have risk-
adjusted capital adequacy guidelines. Capital under these new guidelines is
defined as Tier I and Tier II. At Summit Bancshares, Inc. the only components
of Tier I and Tier II capital are shareholders' equity and a portion of the
allowance for loan losses, respectively. The guidelines also stipulate that
four categories of risk weights (0, 20, 50 and 100 percent), primarily based on
the relative credit risk of the counterparty, be applied to the different types
of balance sheet assets. Risk weights for all off-balance sheet exposures are
determined by a two-step process whereby the face value of the off-balance sheet
item is converted to a "credit equivalent amount" and that amount is assigned to
the appropriate risk category.
The regulatory minimum ratio for total qualifying capital is 8.00% of which
4.00% must be Tier I capital. At June 30, 2000, the Corporation's Tier I
capital represented 13.19% of risk weighted assets and total qualifying capital
(Tier I and Tier II) represented 14.44 % of risk weighted assets. Both ratios
are well above current regulatory guidelines.
Also, as of June 30, 2000, the Corporation and its Subsidiary Banks met the
criteria for classification as a "well-capitalized" institution under the rules
of the Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA").
The Corporation and Subsidiary Banks' regulatory capital positions as of June
30, 2000, were as follows:
<TABLE>
<CAPTION>
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
-------------- ----------------- ------------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED:
As of June 30, 2000
Total Capital (to Risk Weighted Assets) $56,194 14.44% $31,132 8.0%
Tier I Capital (to Risk Weighted Assets) 51,331 13.19 15,566 4.0
Tier I Capital (to Average Assets) 51,331 8.96 17,187 3.0
SUMMIT NATIONAL BANK:
As of June 30, 2000
Total Capital (to Risk Weighted Assets) $22,527 14.75% $12,218 8.0% $15,273 10.0%
Tier I Capital (to Risk Weighted Assets) 20,658 13.50 6,109 4.0 9,164 6.0
Tier I Capital (to Average Assets) 20,658 8.84 6,997 3.0 11,662 5.0
SUMMIT COMMUNITY BANK, N.A.:
As of June 30, 2000
Total Capital (to Risk Weighted Assets) $29,710 12.78% $18,598 8.0% $23,247 10.0%
Tier I Capital (to Risk Weighted Assets) 26,804 11.53 9,299 4.0 13,948 6.0
Tier I Capital (to Average Assets) 26,804 7.97 10,089 3.0 16,816 5.0
</TABLE>
Forward-Looking Statements
--------------------------
The Corporation may from time to time make forward-looking statements (within
the meaning of the Private Securities Litigation Reform Act of 1995) with
respect to earnings per share, credit quality, expected Year 2000 compliance
program, corporate objectives and other financial and business matters. The
Corporation cautions the reader that these forward-looking statements are
subject to numerous assumptions, risks and uncertainties, including economic
conditions; actions taken by the Federal Reserve Board; legislative and
regulatory actions and reforms; competition; as well as other reasons, all of
which change over time. Actual results may differ materially from forward-
looking statements.
27
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Change in Securities
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
At the Corporation's annual shareholders' meeting, held on April 18,
2000, the shareholders of the Corporation:
. ratified the appointment by the Board of Directors of Stovall,
Grandey & Whatley as independent auditors of the Corporation for
its fiscal year ending December 31, 2000. The shareholder vote in
this matter was 5,585,123 for, 8,600 against, and 2 abstaining.
. elected the Board of Directors, consisting of ten (10) persons.
The following directors, constituting the entire Board of
Directors, were elected:
For Against Abstain
--------- ------- -------
D. Jerrell Farr 5,561,625 200 31,900
Elliott S. Garsek 5,561,825 31,900
Ronald J. Goldman 5,560,425 1,400 31,900
F.S. Gunn 5,561,825 31,900
Jeffrey M. Harp 5,479,393 82,432 31,900
Robert L. Herchert 5,561,625 200 31,900
William W. Meadows 5,561,825 31,900
James L. Murray 5,561,825 31,900
Philip E. Norwood 5,479,393 82,432 31,900
Byron B. Searcy 5,561,825 31,900
Item 5. Other Information
Not applicable
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 Computation of Earnings Per Common Share
27 Financial Data Schedule
(b) No Reports on Form 8-K were filed during the period ending June
30, 2000
<PAGE>
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.
SUMMIT BANCSHARES, INC.
Registrant
Date: July 27, 2000 By: /s/ Philip E. Norwood
------------- ------------------------------------
Philip E. Norwood, Chairman
Date: July 27, 2000 By: /s/ Bob G. Scott
-------------- ------------------------------------
Bob G. Scott, Executive Vice President
and Chief Operating Officer
(Chief Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit Page No.
------- --------
11 Computation of Earnings Per Common Share
27 Financial Data Schedule
