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 March 31, 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.)
PO 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 ______ No______
APPLICABLE ONLY TO CORPORATE ISSUERS
Class Outstanding at March 31, 1995
------------------------- ------------------------------
Common Stock, $.01 Par Value 1,384,637
BUTTON GWINNETT FINANCIAL CORPORATION & SUBSIDIARIES
INDEX
Part I. Financial Information Page No.
Consolidated Balance Sheet - March 31, 1995 3
Consolidated Statements of Income - Three Months
Ended March 31, 1995 and 1994 4
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1995 and 1994 5
Notes To Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7 - 8
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
BUTTON GWINNETT FINANCIAL CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
March 31
ASSETS 1995
Cash and due from banks $ 9,247,022
Bank owned certificates of deposit 300,000
Investment securities, approximate market value
of $21,801,661 22,206,387
Federal funds sold 4,045,000
Total Cash and Investments 35,798,409
Loans 98,039,817
Less reserve for loan losses (1,563,418)
Net loans 96,476,399
Premises & equipment, net 4,433,092
Other assets 1,588,027
TOTAL ASSETS $138,295,927
============
LIABILITIES & STOCKHOLDERS' EQUITY
Deposits:
Demand $31,842,703
Interest-bearing demand 31,467,278
Savings 6,215,394
Certificates of deposit 51,380,365
Total deposits $120,905,740
Other liabilities 2,573,782
Total liabilities $123,479,522
Stockholders' Equity
Common stock $.01 par, 5,000,000 authorized;
1,527,539 shares issued $15,275
Surplus 15,650,854
Retained earnings 687,599
$ 16,353,728
Less cost of shares acquired for the treasury,
142,902 shares 1,537,323
Total stockholders' equity 14,816,405
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $138,295,927
============
BUTTON GWINNETT FINANCIAL CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended
March 31
1995 1994
Interest income:
Interest & fees on loans $2,630,331 $1,896,189
Interest on taxable investments 291,762 260,158
Interest on tax free investments 52,774 52,635
$2,974,867 $2,208,982
Interest expense:
Deposits $907,225 $708,491
$907,225 $708,491
Net interest income before provision $2,067,642 $1,500,491
for loan losses
Provision for loan loss 150,000 30,000
Net interest income $1,917,642 $1,470,491
Other income
Service charges on deposit accounts $153,424 $141,314
Other income 67,972 111,393
$221,396 $252,707
Other expense
Salaries & employee benefits $555,050 $452,680
Occupancy and equipment expense 126,872 149,185
Other operating expenses 371,517 371,297
$1,053,439 $973,162
Net income before applicable income taxes $1,085,599 $750,036
Applicable income taxes 398,000 240,000
Net income $687,599 $510,036
Net income per share of common stock $0.50 $0.34
========== ===========
Dividends per share of common stock $0.00 $0.30
========== ===========
BUTTON GWINNETT FINANCIAL CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $687,599 $510,036
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation 57,925 62,343
Provision for loan losses 150,000 30,000
(Increase) decrease in accrued 92,215 (41,786)
interest receivable
Increase (decrease) in accrued 80,745 37,828
interest payable
Other prepaids, deferrals and accruals, net 1,564,323 196,839
Total adjustments $1,945,208 $285,224
Net cash provided by operating activities $2,632,807 $795,260
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in bank owned CD's $0 $1,000,000
Purchases of investment securities 0 (3,052,177)
Proceeds from the maturity of investment 1,455,227 785,000
securities
Purchases of premises and equipment, net (29,267) (29,854)
Increase in loans, net (10,856,204) (2,199,877)
(Increase) decrease in federal funds sold, net (1,100,000) 2,870,000
Net cash (used in) investing activities ($10,530,244) ($626,908)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in deposits, net $9,854,295 $4,573,095
Cash paid for treasury stock (795,946) 0
Cash dividends paid to shareholders 0 (436,508)
Exercise stock options 0 0
Net cash provided by financing activities $9,058,349 $4,136,587
Net increase in cash and due from banks $1,160,912 $4,304,939
Cash and due from banks, beginning of period 8,086,110 4,459,457
Cash and due from banks, ending of period $9,247,022 $8,764,396
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $826,480 $670,663
Income taxes $24,774 $65,767
See Notes to Consolidated Financial Statements
BUTTON GWINNETT FINANCIAL CORPORATION & SUBSIDIARIES
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 three months ended March 31,
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 principal and 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 & SUBSIDIARIES
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 March 31, 1995, the Company experienced an increase in total assets
of 9.06%, as compared to December 31, 1994. Total loans increased
$10,712,388 during this period or approximately 12.49%. Deposits increased
$9,854,295 or 8.87% 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 March 31, 1995, the liquidity rate was 27.95%, 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 banks and bank holding companies to
maintain minimum capital ratios to assets. At March 31, 1995, the
Company's capital ratios on a combined basis exceeded the required ratios
as follows:
Regulatory
Actual Requirement
Leverage capital ratio 10.71% 4.00%
Risk based capital ratios:
Core capital 13.80% 4.00%
Total capital 15.06% 8.00%
BUTTON GWINNETT FINANCIAL CORPORATION & SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Net interest income for the three months ended March 31, 1995 increased
37.80% to $2,067,642 over the $1,500,491 for the same period in 1994.
Interest income for the three month period increased $765,885 or 34.67%,
while interest expense increased $198,734 or 28.05%. 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 tax free investments and
out of the lower investments such as federal funds sold and other
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 three months
ended March 31, 1995 to $150,000 as compared to $30,000 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 portfolio.
Total other income decreased approximately $31,311 or 12.39% to $221,396
as compared to $252,707 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 $1,053,439 or 8.25% over the $973,162
during the three months ended March 31, 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.
Net income increased for the three month period ended March 31, 1995 by
$175,763 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 the increase in deposit and 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.
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)
Item 4 - Any matter submitted to the security holders for a vote.
None
Item 6 - Exhibits and reports on Form 8-K
(a) Exhibits.
None.
(a) Reports on Form 8-K.
None.
