SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarter ended June 30, 1995
Commission file number 2-94245-LA
BILTMORE BANK CORP.
(Exact name of registrant as specified in its charter)
ARIZONA 86-0490147 012112
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2425 East Camelback, Suite 100, Phoenix, Arizona 85016
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 381-6800
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
None
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
------ ------
16,522,530 shares of common stock are outstanding at June 30, 1995.
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Page
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Part I Financial Information
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets as of
June 30, 1995 and December 31, 1994 1
Consolidated Statements of Income
for the six months ended
June 30, 1995 and June 30, 1994 2
Consolidated Statement of Shareholders'
Equity for the six months ended
June 30, 1995 3
Consolidated Statements of Cash Flows
for the six months ended
June 30, 1995 and June 30, 1994 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 6
Part II Other Information 7-8
Part III Signatures 9-10
<PAGE>
Part I Item 1. Financial Statements
BILTMORE BANK CORP.
CONSOLIDATED BALANCE SHEETS
ASSETS
(000's Omitted)
June 30, December 31,
1995 1994
--------- ------------
CASH AND DUE FROM BANKS $ 6,200 $ 7,932
FEDERAL FUNDS SOLD 6,115 5,628
--------- ---------
TOTAL CASH AND CASH EQUIVALENTS $ 12,315 $ 13,560
INVESTMENT SECURITIES AVAILABLE FOR SALE 30,782 36,443
Shown at Market Value
LOANS, less allowance for credit losses
of $2,396 and $2,423 at 6/30/95 and 87,451 86,863
12/31/94, respectively
ACCRUED INTEREST RECEIVABLE AND
OTHER ASSETS 2,119 2,698
PREMISES AND EQUIPMENT, net 1,684 1,605
GOODWILL 1,601 1,676
--------- ---------
$ 135,952 $ 142,845
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
DEPOSITS:
Demand-
Noninterest-bearing $ 24,840 $ 27,262
Interest-bearing 30,739 39,968
Time certificates of deposit,
$100,000 and over 14,896 14,090
Other time certificates and
individual retirement accounts 31,973 29,077
Savings 19,007 18,831
--------- ---------
121,455 129,228
ACCRUED INTEREST PAYABLE 202 219
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE 847 603
OTHER LIABILITIES 364 949
--------- ---------
122,868 130,999
SHAREHOLDERS' EQUITY:
Preferred stock, no par value:
Authorized and unissued, 10,000,000 shares -- --
Common stock, no par value (stated value $.50)
Authorized, 25,000,000 shares; issued and
outstanding, 16,522,530 shares 8,261 8,261
Additional paid-in capital 4,415 4,415
Undivided Profits 547 215
Equity in Investments (139) (1,045)
--------- ---------
13,084 11,846
--------- ---------
$ 135,952 $ 142,845
========= =========
See notes to consolidated financial statements.
<PAGE>
BILTMORE BANK CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Six months ended June 30,
1995 1994
------------ ------------
INTEREST INCOME:
Interest and fees on loans $ 3,966,298 $ 2,901,338
Other interest income 1,117,447 1,102,844
------------ ------------
Total interest income 5,083,745 4,004,182
INTEREST EXPENSE 2,141,027 1,617,934
------------ ------------
Net interest income 2,942,718 2,386,248
PROVISION FOR CREDIT LOSSES -- --
------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT LOSSES 2,942,718 2,386,248
CUSTOMER SERVICE FEES 254,714 231,157
FEE INCOME FROM "INVEST" BROKERAGE OFFICE 47,841 58,405
TRUST REVENUES 87,800 47,752
NET GAIN ON SALE OF SECURITIES 28,455 10,715
------------ ------------
418,810 348,029
OPERATING EXPENSES:
Salaries and employee benefits, net
of deferred loan origination costs
of $63,213 and $69,108 1,256,064 976,629
Occupancy 315,939 283,624
Equipment 179,537 157,943
Data processing 151,022 168,191
Business development-Adv & T&E 117,802 90,511
Real estate owned 45,441 0
FDIC deposit insurance 137,584 147,840
Management fee expense 201,564 118,080
Other 495,627 381,928
------------ ------------
2,900,580 2,324,746
NET INCOME BEFORE INCOME TAX EXPENSE 460,948 409,531
INCOME TAX BENEFIT (EXPENSE) (129,378) 384,827
------------ ------------
NET INCOME 331,570 794,358
NET INCOME PER SHARE $ 0.02 $ 0.05
============ ============
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 16,522,530 16,522,530
============ ============
See notes to consolidated financial statements.
<PAGE>
<TABLE>
BILTMORE BANK CORP.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<CAPTION>
Common Stock Additional
------------------------- Paid-in Accumulated Equity in
Shares Amount Capital Deficit Investments
---------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1994 16,522,530 $ 8,261,000 $ 4,415,000 $ 215,000 $(1,045,000)
Net income -- -- -- 332,000 --
Change in unrealized gain
(loss) in investments
available for sale through
June 30, 1995 -- -- -- -- 906,000
----------- ----------- ----------- ----------- -----------
BALANCE, June 30, 1995 16,522,530 $ 8,261,000 $ 4,415,000 $ 547,000 $ (139,000)
=========== =========== =========== =========== ===========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
BILTMORE BANK CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended June 30,
(000's omitted)
1995 1994
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 332 $ 794
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation and amortization 132 119
Net amortization and accretion of investment
securities premiums and discounts (98) 64
Net gains on sale of securities (28) (11)
Net change in unrealized loss in investment securities 0 0
Amortization of Intangibles 75 0
Decrease (increase) in accrued interest receivable
and other assets 610 (524)
(Decrease) in accrued interest payable and other
liabilities 123 165
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,340 607
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of investment securities 5,141 2,980
Proceeds from maturities of investment securities 2,000 12,200
Purchase of investment securities (1,013) (13,083)
Acquisition of investments from
American National Bank ("ANB") 0 (7,045)
Net (increase) decrease in loans (589) (2,809)
Acquisition of loans from ANB 0 (15,260)
Purchase of bank premises and equipment (176) (49)
Acquisition of bank premises and equipment from ANB 0 (812)
Increase in goodwill due to acquisition of ANB 0 (1,668)
-------- --------
NET CASH (USED) BY INVESTING ACTIVITIES 5,363 (25,546)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in demand deposits and savings (11,475) (1,909)
Net (decrease) increase in time certificates of deposit 3,702) (1,953)
Acquisition of demand deposits and savings from ANB 0 23,892
Acquisition of certificate of deposits from ANB 0 6,930
Net increase in securities sold under agreement
to repurchase 175 0
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES (7,948) 26,961
-------- --------
NET INCREASE (decrease) IN CASH AND CASH EQUIVALENTS (1,245) 2,022
CASH AND CASH EQUIVALENTS, beginning of period 13,560 6,753
-------- --------
CASH AND CASH EQUIVALENTS, end of period $ 12,315 $ 8,775
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid on deposits. $ 2,104 $ 1,606
See notes to consolidated financial statements.
<PAGE>
BILTMORE BANK CORP. AND SUBSIDIARY
----------------------------------
FOOTNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
June 30, 1995
-------------
(Unaudited)
NOTE 1 -- Basis of Preparation and Presentation
The consolidated financial statements included herein have been prepared
by Biltmore Bank Corp. (the Company), without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission and include all
adjustments which are, in the opinion of management, necessary for a fair
presentation. The condensed consolidated financial statements include the
accounts of the Company and its subsidiary. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The Company believes that the
disclosures are adequate to make the information presented not misleading;
however, it is suggested that these financial statements be read in conjunction
with the financial statements and the notes thereto which are incorporated by
reference in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994. The financial data for the interim periods may not
necessarily be indicative of results to be expected for the year.
NOTE 2 -- Deferred Tax Asset
During the second quarter of 1994, the Company recognized a deferred tax
asset in accordance with Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes". This was done by eliminating the valuation
allowance related to deferred tax assets from net operating loss carryforwards.
The result was an income tax benefit of $432,000, which had the effect of
increasing net income.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Total assets decreased $6,893,000 from December 31, 1994 and June 30, 1995
as a result of strong competition for deposits in the market area. Total loans
increased by $588,000. $5,000,000 in US Treasury and Agency Securities were sold
during the second quarter of 1995 in order to provide liquidity due to this
decrease in deposits. In addition, the bank had $2,000,000 in maturities and
purchased $1,000,000 during the period.
Net Income before taxes for the first six months of 1995 was $51,418 greater
than 1994. Net income after taxes was $462,787 less than 1994 due to the
elimination of the valuation allowance related to deferred tax assets (see
footnote number 2 - "Deferred Tax Asset").
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.
Registrant Biltmore Bank Corp.
BY LeRoy C. Gust Date June 30, 1995
-------------------------------- --------------------------
LeRoy C. Gust, President and
Chief Executive Officer
BY James E. Chappell Date June 30, 1995
------------------------------- --------------------------
James E. Chappell, Secretary
and Assistant Treasurer
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1
<CASH> 6,200
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 6,115
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 30,782
<INVESTMENTS-CARRYING> 30,782
<INVESTMENTS-MARKET> 30,782
<LOANS> 89,847
<ALLOWANCE> 2,396
<TOTAL-ASSETS> 135,952
<DEPOSITS> 121,455
<SHORT-TERM> 847
<LIABILITIES-OTHER> 566
<LONG-TERM> 0
<COMMON> 8,261
0
0
<OTHER-SE> 4,823
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<INTEREST-LOAN> 3,966
<INTEREST-INVEST> 1,118
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 5,084
<INTEREST-DEPOSIT> 2,104
<INTEREST-EXPENSE> 37
<INCOME-PRETAX> 461
<INTEREST-INCOME-NET> 2,943
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 28
<EXPENSE-OTHER> 2,510
<INCOME-PRE-EXTRAORDINARY> 332
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 332
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
<YIELD-ACTUAL> 5.07
<LOANS-NON> 529
<LOANS-PAST> 1,694
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 4,389
<ALLOWANCE-OPEN> 2,423
<CHARGE-OFFS> 62
<RECOVERIES> 36
<ALLOWANCE-CLOSE> 2,396
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 324
</TABLE>
