<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
----- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
----- SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------- ---------
Commission file number 0-13153
HABERSHAM BANCORP
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Georgia 58-1563165
- --------------------------------------------------------------------------------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Highway 441 N., P.O. Box 1980, Cornelia, Georgia 30531
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(706) 778-1000
- --------------------------------------------------------------------------------
(Issuer's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
1,675,255 shares, common stock, $1.00 par value, as of March 31, 1995
Page 1 of 10
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Item. 1 Financial Statements
HABERSHAM BANCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
MARCH 31, 1995 DECEMBER 31, 1994
ASSETS (Unaudited)
<S> <C> <C>
Cash and due from banks .................. $ 4,292 $ 4,451
Federal funds sold ....................... 8,900 1,020
Investment securities available for sale
(estimated cost of $32,269 at March 31,
1995 and $30,065 at December 31, 1994... 31,444 28,530
Investment securities held to maturity
(estimated market value of $20,445 at
March 31, 1995, and $21,093 at
December 31, 1994) ..................... 20,540 21,619
Loans .................................... 100,068 100,848
Less: Unearned income ................. (45) (45)
Allowance for loan losses ....... (1,696) (1,744)
-------- --------
Loans, net ........................... 98,327 99,059
-------- --------
Other assets ............................. 6,908 6,648
-------- --------
TOTAL ASSETS ......................... $170,411 $161,327
======== ========
LIABILITIES
Non-interest bearing deposits ............ $ 18,479 $ 17,100
Interest bearing deposits ................ 129,472 124,515
Short-term borrowings .................... 482 1,002
Other borrowings ......................... 3,700 1,500
Other liabilities ........................ 1,568 1,359
-------- --------
TOTAL LIABILITIES .................... 153,701 145,476
-------- --------
SHAREHOLDERS' EQUITY (Note 3)
Common stock, $1.00 par value,
10,000,000 shares authorized;
1,750,000 shares issued ................ 1,750 1,750
Additional paid-in capital ............... 2,448 2,446
Retained earnings ........................ 13,487 13,110
Unrealized loss on investment securities
available for sale ..................... (544) (1,013)
Treasury stock (at cost) ................. (431) (442)
-------- --------
TOTAL SHAREHOLDERS' EQUITY ........... 16,710 15,851
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY ............................. $170,411 $161,327
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE> 3
HABERSHAM BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(dollars in thousands, except per share amounts)
For the (Unaudited) Three-Month Periods Ended March 31, 1995 and 1994
<TABLE>
<CAPTION>
MARCH 31, 1995 MARCH 31, 1994
<S> <C> <C>
INTEREST INCOME
Loans (including fees) ..................... $ 2,536 $ 2,410
Investment securities ...................... 782 632
Other ...................................... 41 42
--------- ---------
TOTAL INTEREST INCOME ................... 3,359 3,084
INTEREST EXPENSE
Deposits ................................... 1,352 1,140
Other ...................................... 69 26
--------- ---------
TOTAL INTEREST EXPENSE .................. 1,421 1,166
NET INTEREST INCOME ........................ 1,938 1,918
Provision for loan losses .................. 7 52
--------- ---------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES ................. 1,931 1,866
Other Income ............................... 250 220
Other Expense .............................. 1,732 1,628
--------- ---------
INCOME BEFORE INCOME TAXES.................. 449 458
Applicable income taxes ................... 72 78
--------- ---------
NET INCOME ................................. 377 380
Retained earnings at beginning of period.... 13,110 11,585
--------- ---------
Retained earnings at end of period ......... $ 13,487 $ 11,965
========= =========
Per Common and Common Equivalent Share:
NET INCOME ................................. $ .22 $ .23
========= =========
WEIGHTED AVERAGE NUMBER OF COMMON AND
COMMON EQUIVALENT SHARES OUTSTANDING ....... 1,714,940 1,686,800
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
HABERSHAM BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
For the (Unaudited) Three-Month Periods Ended March 31, 1995 and 1994
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
CASH FLOWS FROM OPERATING ACTIVITIES: 1995 1994
<S> <C> <C>
Net Income ........................................ $ 377 $ 380
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for loan losses ..................... 7 52
Net (loss)gain on sale of investment securities 10 (5)
Net loss on other real estate owned ........... 60
Depreciation .................................. 132 144
Changes in assets and liabilities:
Increase in other assets ...................... (331) (169)
Increase (decrease) in other liabilities ...... 149 101
------- -------
Net cash provided by operating activities ......... 404 503
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment securities available for sale:
Proceeds from maturity ............................ 690 2,222
Proceeds from sale ................................ 491 1,618
Purchases ......................................... (3,393) (8,663)
Investment securities held to maturity:
Proceeds from maturity ............................ 1,836 1,071
Purchases ......................................... (757) (1,882)
Net decrease in loans .............................. 541 3,394
Proceeds from sale of other real estate ............ 3 29
Net additions of premises and equipment ............ (123) (52)
------- -------
Net cash used by investing activities ............. (712) (2,263)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits ............... 6,336 5,093
Net increase (decrease) in short-term borrowings .. (520) (37)
Net increase (decrease) in other borrowings ....... 2,200
Sale of treasury stock ............................ 13 18
------- --------
Net cash provided by financing activities ......... 8,029 5,074
------- -------
Increase (decrease) in cash and cash equivalents .... 7,721 3,314
CASH AND CASH EQUIVALENTS: BEGINNING OF PERIOD ...... 5,471 8,070
------- -------
CASH AND CASH EQUIVALENTS: END OF PERIOD ............ $13,192 $11,384
======= =======
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITY:
Other real estate acquired through loan foreclosures.. $ 200 $ 17
Loan made to sell other real estate .................. (16)
Unrealized loss on investment securities available
for sale ............................................ 469 264
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
HABERSHAM BANCORP
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The condensed financial 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 periods 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 periods reported herein
are not necessarily indicative of results to be expected for the full year.
The condensed consolidated financial statements included herein should be read
in conjunction with the Company's 1994 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 fiscal year ended December 31, 1994. The Company
has consistently followed those policies in preparing this report.
3. Common Stock
Effective May 15, 1995, the Company declared a 5 for 1 stock split of its
common stock effected in the form of a 400% stock dividend. In addition,
effective April 15, 1995, the Company changed the par value of its common stock
from $2.50 to $1.00 per share and increased the number of authorized shares of
common stock to 10,000,000 shares. All references to share and per share
amounts have been retroactively adjusted to reflect this split. Also
retroactively, $875,000 has been charged to Additional Paid-In Capital and
credited to Common Stock to reflect the stock split and the change in par
value.
4. Earnings Per Share
Net income per share is computed based on the weighted average number of common
and common equivalent shares outstanding during the periods.
5
<PAGE> 6
Item. 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations.
HABERSHAM BANCORP
Organization
Habersham Bancorp (the "Company") owns all of the outstanding stock of
Habersham Bank (the "Bank") and The Advantage Group, Inc. The Advantage Group,
Inc. is a non-bank subsidiary which provides certain management consulting
advice to depository institutions. Management's discussion and analysis, which
follows, relates to the Bank and The Advantage Group, Inc., as the Company does
not have any other significant separate operations.
Material Changes in Financial Condition
The Bank's total assets increased approximately $9 million during the first
quarter of 1995 as reflected in an increase in Federal Funds Sold of
approximately $8 million and an increase in Investment Securities of
approximately $1 million. This increase was funded by an increase in total
liabilities of approximately $8 million consisting of a deposit increase of
approximately $6 million and an increase in Other Borrowings of approximately
$2 million.
At March 31, 1995, loans over 90 day days past due and nonaccrual loans
totaled $704,302 or .70% of gross outstanding loans, as compared to $764,839 or
.76% at December 31, 1994. The balance of the allowance for loan losses is in
accordance with the internal calculation of the allowance for loan losses and
accounts for factors such as classified and past due loans as well as portfolio
growth and diversification. There were no significant writeoffs during the
first quarter of 1995.
Effective May 15, 1995, the Company declared a 5 for 1 stock split of its
common stock effected in the form of a 400% stock dividend. In addition,
effective April 15, 1995, the Company changed the par value of its common stock
from $2.50 to $1.00 per share and increased the number of authorized shares of
common stock to 10,000,000 shares. All references to share and per share
amounts have been retroactively adjusted to reflect this split.
Material Changes in Results of Operations
Interest income for the first quarter of 1995 increased $275,000 or 8.9%,
when compared to the first quarter of 1994. Interest income from investment
securities increased $150,000 or 23.7% due primarily to an increase of
approximately $5 million of investment securities over the first quarter of
1995. Interest income from loans increased $126,000 or 5.2% due to an increase
in loan yields to 9.38% for the first quarter of 1995 as compared to 8.78% for
the first quarter of 1994.
6
<PAGE> 7
Interest expense for the first quarter of 1995 increased $255,000 or 21.9%,
when compared to the first quarter of 1994. Interest expense on deposits
increased $212,000 or 18.6% due to an average rate offered of 4.69% compared to
an average rate of 3.41% offered during the first quarter of 1994. Other
interest expense increased $43,000 or 165.4% due to an additional Federal Home
Loan Bank Advance of $2.2 million. Total deposits increased approximately $4
million, when comparing March 31, 1995 balances to March 31, 1994 balances with
the increase primarily in demand deposit accounts.
Net interest income increased approximately $20,000 or 1%, for the first
quarter of 1995 because of the items noted above.
Other income increased $30,000 or 13.6% for the first quarter of 1995 over
the same period in 1994. This increase was due to increase in service charge
activity, trust department fees, and safe deposit box rental income.
Other expenses increased $104,000 or 6.4% for the first quarter of 1995
over the same period in 1994. This increase was due to normal increases in
employee salaries and benefits and additional expenses relating to the master
card operation of approximately $22,000 and loss on other real estate owned of
approximately $60,000.
Liquidity and Capital Resources
The Bank's liquidity policy requires that the ratio cash and certain
short-term investments to net withdrawable deposit accounts be at least 20%.
This liquidity ratio was 38.96% at March 31, 1995 and 33.15% at December 31,
1994.
At March 31, 1995, the Bank was required to have minimum Tier 1 and total
capital ratios of 4% and 8%, respectively. The Bank's actual ratios at that
date were 12.81% and 14.06%, respectively. Tier I leverage ratio at March 31,
1995 was 10.18% as compared to 9.37% at December 31, 1994. While management
believes that the current level of internal capital is sufficient for current
and foreseeable needs of the Company, capital needs are continually evaluated
by management.
7
<PAGE> 8
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
none
Item 2. Changes in securities.
none
Item 3. Defaults upon senior securities.
none
Item 4. Submission of matters to a vote of security holders.
(a) The regular annual meeting of the shareholders of the Company was
held on April 15, 1995.
(b) The business conducted at the meeting included the election of
the Board of Directors. The Directors elected at the meeting were: Thomas A.
Arrendale, Jr., Thomas A. Arrendale, III, James J. Holcomb, James A. Stapleton,
Jr., David D. Stovall, and Calvin R. Wilbanks.
At the registrant's Annual Meeting of Shareholders on April 15, 1995, the
shareholders elected directors to serve for a term of one year or until their
successors are duly qualified and elected. The following table sets forth the
number of votes cast and withheld with respect to each nominated director.
Abstentions and broker non-votes are also listed for each nominee.
<TABLE>
<CAPTION>
Name Votes For Votes Withheld Abstentions & Non-Votes
- ---- --------- -------------- -----------------------
<S> <C> <C> <C>
Thomas A. Arrendale, Jr. 285,975 94 0
Thomas A. Arrendale, III 285,975 94 0
David D. Stovall 285,975 94 0
James J. Holcomb 285,975 94 0
James A. Stapleton, Jr. 285,975 94 0
Calvin R. Wilbanks 285,975 94 0
</TABLE>
(c) The shareholders also approved an amendment to the
Company's Articles of Incorporation increasing the number of authorized shares
of common stock of the Company from 1,000,000 to 10,000,000 by the following
vote:
<TABLE>
<CAPTION>
Votes For Votes Against Abstentions
--------- ------------- -----------
<S> <C> <C>
283,323 44 2,702
</TABLE>
(d) The shareholders also approved the Habersham Bancorp Outside
Directors Stock Option Plan by the following votes:
<TABLE>
<CAPTION>
Votes For Votes Against Abstentions
--------- ------------- -----------
<S> <C> <C>
255,473 28,526 2,036
</TABLE>
(e) Deloitte & Touche was elected to serve as independent auditors
for the year ending December 31, 1995.
8
<PAGE> 9
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) none
9
<PAGE> 10
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
HABERSHAM BANCORP
-----------------
(Registrant)
Date May 9, 1995 /s/ David D. Stovall
------------------ --------------------------
President and
Chief Financial Officer
(for the Registrant and as the
Registrant's principal financial and
accounting officer)
10
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF HABERSHAM BANCORP FOR THE THREE MONTHS ENDED MARCH 31,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 4,291,578
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 8,900,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 31,444,118
<INVESTMENTS-CARRYING> 20,537,830
<INVESTMENTS-MARKET> 20,445,000
<LOANS> 100,068,523
<ALLOWANCE> 1,741,276
<TOTAL-ASSETS> 170,411,332
<DEPOSITS> 147,951,571
<SHORT-TERM> 481,613
<LIABILITIES-OTHER> 4,669,544
<LONG-TERM> 0
<COMMON> 0
0
1,750,000
<OTHER-SE> 14,959,703
<TOTAL-LIABILITIES-AND-EQUITY> 170,411,332
<INTEREST-LOAN> 2,536,268
<INTEREST-INVEST> 782,012
<INTEREST-OTHER> 40,989
<INTEREST-TOTAL> 3,359,269
<INTEREST-DEPOSIT> 1,352,576
<INTEREST-EXPENSE> 1,421,355
<INTEREST-INCOME-NET> 448,190
<LOAN-LOSSES> 6,766
<SECURITIES-GAINS> (9,622)
<EXPENSE-OTHER> 1,722,958
<INCOME-PRETAX> 448,190
<INCOME-PRE-EXTRAORDINARY> 448,190
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 376,551
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
<YIELD-ACTUAL> 4.70
<LOANS-NON> 507,450
<LOANS-PAST> 196,852
<LOANS-TROUBLED> 1,291,237
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,744,335
<CHARGE-OFFS> 63,115
<RECOVERIES> 7,981
<ALLOWANCE-CLOSE> 1,675,964
<ALLOWANCE-DOMESTIC> 1,695,967
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
