FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
_
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
For the transition period from _______ to ________
Commission file number 33-13714-A
BUTTON GWINNETT FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
GEORGIA 58-
1766331
(State or Other Jurisdiction of (I.R.S
Employer
Incorporation or Organization)
Identification No.)
P.O. BOX 1230, 150 S. PERRY STREET, LAWRENCEVILLE, GA
30246-1230
(Address of Principal Executive Offices)
(Zip Code)
(404) 963-6665
(Issuer's Telephone Number, including Area Code)
2230 SCENIC HIGHWAY, SNELLVILLE, GEORGIA 30278
(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 XX No
APPLICABLE ONLY TO CORPORATE ISSUERS
Class Outstanding at
June 30, 1995
---------------------------- ---------------------
------------
Common Stock, $.01 Par Value
1,384,537
BUTTON GWINNETT FINANCIAL CORPORATION & SUBSIDIARY
INDEX
Part I. Financial Information Page
No.
Consolidated Balance Sheet - June 30, 1995
3
Consolidated Statements of Income - Six Months
Ended June 30, 1995 and 1994 and Three Months
Ended June 30, 1995 and 1994
4
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1995 and 1994
5
Notes To Consolidated Financial Statements
6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
- 9
Part II. Other Information
Item 4 - Any matter submitted to the security
holders for a vote
10
Item 6 - Exhibits and reports on Form 8-K
10
Signatures
11
BUTTON GWINNETT FINANCIAL CORPORATION & SUBSIDIARY
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
June 30
ASSETS
1995
Cash and due from banks
$10,506,984
Bank owned certificates of deposit
300,000
Investment securities, approximate market value
of $21,562,366
21,771,032
Federal funds sold
17,485,000
Total Cash and Investments
50,063,016
Loans
105,285,174
Less reserve for loan losses
(1,706,422)
Net loans
103,578,752
Premises & equipment, net
4,382,926
Other assets
1,545,084
$159,569,778
LIABILITIES & STOCKHOLDERS' EQUITY
Deposits:
Demand $
35,296,794
Interest-bearing demand
30,730,086
Savings
6,478,913
Certificates of deposit
69,724,902
Total deposits
$142,230,695
Other liabilities
2,185,963
Total liabilities
$144,416,658
Stockholders' Equity
Common stock $.01 par, 5,000,000 authorized;
1,527,539 shares issued $
15,275
Surplus
15,166,195
Retained earnings
1,510,263
$
16,691,733
Less cost of shares acquired for the treasury,
143,002 shares
(1,538,613)
Total stockholders' equity
15,153,120
$159,569,778
BUTTON GWINNETT FINANCIAL CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six
Months Ended
June 30
June 30
1995 1994 1995
1994
Interest income:
Interest & fees on loans $2,967,130 $2,058,283
$5,597,461 $3,954,472
Interest on taxable investments $ 404,307 292,114
696,069 552,272
Interest on tax free investments $ 49,893 51,773
102,667 104,408
$3,421,330 $2,402,170
$6,396,197 $4,611,152
Interest expense:
Deposits $1,195,094 $ 707,774
$2,102,319 $1,416,265
Net interest income before
provision for loan losses $2,226,236 $1,694,396
$4,293,878 $3,194,887
Provision for loan loss $150,000 35,000
300,000 65,000
Net interest income $2,076,236 $1,659,396
$3,993,878 $3,129,887
Other income
Service charges on
deposit accounts $ 174,617 $ 153,668 $
328,041 $ 294,982
Other income 26,044 62,884
94,016 174,277
$ 200,661 $ 216,552 $
422,057 $ 469,259
Other expense
Salaries & employee benefits $ 571,528 $ 461,996
$1,126,578 $ 914,676
Occupancy and equipment expense 99,169 138,174
226,041 287,359
Other operating expenses 365,536 402,984
737,053 774,281
$1,036,233 $1,003,154
$2,089,672 $1,976,316
Net income before applicable
income taxes $1,240,664 $ 872,794
$2,326,263 $1,622,830
Applicable income taxes $ 418,000 309,500
816,000 549,500
Net income $ 822,664 $ 563,294
$1,510,263 $1,073,330
Net income per share of
common stock $ 0.59 $ 0.39 $
1.09 $ 0.74
Dividends per share of
common stock $ 0.30 $ 0.30 $
0.35 $ 0.30
BUTTON GWINNETT FINANCIAL CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months
Ended June 30
1995
1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $1,510,263
$1,073,330
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation 115,939
121,909
Provision for loan losses 300,000
65,000
(Increase) decrease in accrued interest receivable 27,780
(108,310)
Increase (decrease) in accrued interest payable 300,289
57,305
Other prepaids, deferrals and accruals, net 1,095,931
451,687
Total adjustments $1,839,939
$ 587,591
Net cash provided by operating activities $3,350,202
$1,660,921
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in bank owned CD's $ 0
$1,000,000
Purchases of investment securities (89,418)
(5,532,388)
Proceeds from the maturity of investment securities 1,980,000
1,285,000
Purchases of premises and equipment, net (37,115)
(69,596)
Increase in loans, net (18,140,151)
(5,993,856)
(Increase) decrease in federal funds sold, net (14,540,000)
5,390,000
Net cash (used in) investing activities ($30,826,684)
($3,920,840)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in deposits, net $31,179,250
$4,168,623
Purchase of Treasury Stock (797,236)
0
Cash dividends paid to shareholders (484,658)
(436,508)
Exercise stock options 0
13,562
Net cash provided by financing activities $29,897,356
$3,745,677
Net increase in cash and due from banks $ 2,420,874
$1,485,758
Cash and due from banks, beginning of period 8,086,110
4,459,457
Cash and due from banks, ending of period $10,506,984
$5,945,215
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 1,802,030
$1,358,959
Income taxes $ 860,774
$ 57,967
BUTTON GWINNETT FINANCIAL CORPORATION & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation
The financial information included herein is
unaudited;however, such information reflects all adjustments
(consisting solely of normal recurring adjustments) which are, in
the opinion of management, necessary for a fair statement of
results for the interim periods.
The results of operations for the six months ended June
30, 1995 are not necessarily indicative of the results to be
expected for the full year.
Note 2. Adoption of New Accounting Principle
On January 1, 1995, the Company adopted Statement of
Financial Accounting Standard "SFAS" No. 114, "Accounting by
Creditors for the Impairment of a Loan." SFAS No. 114 generally
requires impaired loans to be measured on the present value of
expected future cash flows discounted at the loan's effective
interest rate, at the loan's observable market price or at the
fair value of the collateral if the loan is collateral dependent.
A loan is impaired when it is probable the creditor will be
unable to collect all contractual principaland interest payments
due in accordance with the terms of the loan agreement. The
adoption of SFAS 114 did not have a material effect on the
Company's consolidated financial statements.
BUTTON GWINNETT FINANCIAL CORPORATION & SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial
position and operating results during the periods included in the
accompanying consolidated financial statements.
Financial Condition
As of June 30, 1995, the Company experienced an increase in total
assets of 25.84%, as compared to December 31, 1994. Total loans
increased $17,814,741 during this period or approximately 20.77%.
Deposits increased $31,179,250 or 28.08% during this period. The
increases in total assets, loans and deposits are attributed to
the improvement in the stability of the local economy, as well as
the addition of three commercial officers to the staff.
Liquidity
As of June 30, 1995, the liquidity ratio was 33.45%, which
management considers to be adequate to meet the Company's funding
needs. Liquidity is measured by the ratio of net cash, short-
term and marketable securities to net deposits and short-term
liabilities.
Capital
Banking regulations require the Company to maintain minimum
capital levels to assets. At June 30, 1995, the Company's
capital ratios exceeded the required ratios as follows:
Regulatory
Actual
Requirement
Leverage capital ratio 9.50%
4.00%
Risk based capital ratios:
Core capital 12.84%
4.00%
Total capital 14.21%
8.00%
BUTTON GWINNETT FINANCIAL CORPORATION & SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Net interest income for the six months ended June 30, 1995
increased 34.40% to $4,293,878 over the $3,194,887 for the same
period in 1994. Interest income for the six month period
increased $1,785,045 or 38.71%, while interest expense increased
$686,054 or 48.44%. The interest income increase was due to the
significant increase in commercial loans that were produced by
the commercial officers, as well as management efforts to move
more of the assets into higher earning loans and investments. The
increase in interest expense is attributed to the increase in new
interest bearing deposit accounts that have been opened as a
result of the calling efforts of the commercial officers.
Management increased the provision for loan losses during the six
months ended June 30, 1995 to $300,000 as compared to $65,000 for
the same period in 1994, primarily due to the increase in the
amount of total loans outstanding. Based on management's
assessment of the economic environment and prior charge-off and
collection history, the reserve for loan loss is considered
adequate to absorb future losses inherent in the loan portfolio.
Total other income decreased approximately $47,202 or 10.06% to
$422,057 as compared to $469,259 for the same period 1994. The
increase in service charge is a result of increase in volume
primarily from commercial checking accounts, which are subject to
analysis charges. The decrease in other income is due to the
reduction in rental income earned on other real estate during the
same period in 1994. There was also a decrease in the amount of
origination fees earned during the same period in 1994.
Total other expenses increased to $2,089,672 or 5.73% over the
$1,976,316 during the six months ended June 30, 1994. The
increase in salaries and employee benefits was due to an addition
of approximately nine employees to the staff over the same period
in 1994. Occupancy and equipment expense decreased due to the
closing of a branch office, of which rental expense was incurred
during 1994. The decrease in other operating expenses was
primarily due to expenses incurred during 1994 on other real
estate owned by the bank. The property was sold in 1994 and no
expense was incurred during the same period in 1995.
The provision for income taxes increased to $816,000 for the six
month period ended June 30, 1995 over the $549,500 for the six
month period ended June 30, 1994. The increase is primarily due
to a higher pretax income. The effective tax rate has remained
consistent from 1994 to 1995 at 34% and 35% respectively.
Net income increased for the six month period ended June 30, 1995
by $436,933 as compared to the same period in 1994. The increase
is attributed to more efficient operations of the bank,
improvement in the local economy and a significant increase in
loan relationships.
The Company is not aware of any known trends, events or
uncertainties, other than the effect of events as described
above, that will have or that are reasonably likely to have a
material effect on its liquidity, capital resources or
operations. The Company is also not aware of any current
recommendations by the regulatory authorities which, if they were
implemented, would have such an effect.
Item 4 - Any matter submitted to the security holders for a vote.
The annual shareholders meeting was held on April 17,
1995 for the
following purposes:
(1) To elect directors of the Company to serve until
their
successors are duly elected and qualified;
(2) To ratify the selection of Mauldin & Jenkins as
independent
public accountants for the fiscal year ending
December 31,1995;
(3) To consider such other business as may properly
come before the
Annual Meeting or any adjournments thereof.
Total shares represented at the meeting were:
1,049,663 shares
(1) Votes cast for
1,049,448
Votes cast against
215
(2) Votes cast for
1,037,725
Votes cast against
9,316
Votes abstained
2,622
Item 6 - Exhibits and reports on Form 8-K
(a) Exhibits.
None.
(a) Reports on Form 8-K.
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BUTTON GWINNETT FINANCIAL CORPORATION
Date: ____________
By:___________________________________
Glenn S. White
President
(Principal Executive
Officer)
Date: ____________
By:___________________________________
Andrew R. Pourchier
Executive Vice
President and
Secretary-Treasurer
(Principal Financial
Officer)
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