FORM 10-QSB
U. S. Securities and Exchange Commission
Washington, D.C. 20549
(Mark One)
[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 1943.
For the transition period from___________ to _________
Commission file number 0-16657
FIRST GEORGIA HOLDING, INC.
GEORGIA 58-1781773
(State or other jurisdiction (I.R.S. Employer
or incorporation or organization) Identification Number)
1703 GLOUCESTER STREET
BRUNSWICK GEORGIA 31521
(912) 267-7283
(Issuer's telephone number)
Check whether the issuer (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______
Number of shares of Common Stock outstanding as of March 31, 1995.
1,326,641
<PAGE>
PART I
FINANCIAL INFORMATION
The consolidated financial statements of First Georgia Holding, Inc. filed as
a part of this report are as follows:
Page
Consolidated Balance Sheets as of
March 31, 1995 and September 30, 1994 3
Consolidated Income Statements for the
Three Months Ended March 31, 1995 & 1994 and
Six Months Ended March 31, 1995 & 1994 4
Consolidated Cash Flow Statements for
the Six Months Ended March 31, 1995 & 1994 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Consolidated Statements of Financial
Condition and Results of Operations 7
PART II
OTHER INFORMATION
Item 4: Submission of Matters to a Vote of
Security Holders 11
<TABLE>
FIRST GEORGIA HOLDING COMPANY
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
<CAPTION>
03/31/95 9/30/94
-------- -------
<S> <C> <C>
Assets:
Cash $ 2,675 3,321
Interest bearing deposits in other banks 3,587 717
Investment securities to be held to maturity 7,193 7,511
Loans receivable, net 117,943 113,579
Real estate acquired in settlement of loans 566 240
Federal Home Loan Bank stock, at cost 1,576 1,576
Premises and equipment, net 3,627 3,796
Accrued interest receivable 872 751
Intangible assets, net 1,609 1,681
Other assets 924 699
-------- -------
$140,571 133,870
======= =======
Liabilities and Stockholders' Equity
Liabilities:
Deposits $111,532 103,407
Federal Home Loan Bank advances 16,448 16,748
Advance payments by borrowers for property
taxes and insurance 7 82
Other borrowed money 240 1,240
Accrued expenses and other liabilities 1,793 2,465
-------- -------
130,084 123,943
Stockholders' Equity
Common stock, $1.00 par value.
Authorized 15,000,000 shares; issued
and outstanding 1,326,641 shares 1,327 1,327
Additional paid-in capital 5,786 5,786
Retained earnings 3,374 2,815
------- -------
10,487 9,927
------- -------
$140,571 133,870
======== =======
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
FIRST GEORGIA HOLDING COMPANY
CONSOLIDATED INCOME STATEMENTS
(Amounts in thousands, except per share data)
<CAPTION>
Three Months Ended Six Months Ended
03/31/95 03/31/94 03/31/95 03/31/94
------------- ------------- ------------- ---------
<S> <C> <C> <C> <C>
Interest Income:
Loans $2,745 2,352 5,334 4,812
Mortgage-backed securities 10 10 19 20
Investment Securities 108 76 208 150
Other 31 40 47 65
------ ----- ----- -----
Total interest income 2,894 2,478 5,608 5,047
------ ----- ----- -----
Interest Expense:
Deposits 1,265 1,125 2,426 2,271
Advances and other
borrowings 282 266 560 534
------ ----- ----- -----
Total interest expense 1,548 1,391 2,986 2,806
------ ----- ----- -----
Net interest income 1,346 1,086 2,623 2,241
Provision for
Loan Losses 61 0 61 39
----- ----- ----- -----
Net interest income after
provision for loan losses 1,285 1,086 2,562 2,202
------ ----- ----- -----
Other Income:
Loan fees 108 121 194 207
Deposit service charges 151 142 309 299
(Loss) gain on sale of
foreclosed property (3) (21) (4) (21)
Other operating income 22 38 42 69
------ ----- ----- -----
Total other income 278 280 542 553
------ ----- ----- -----
Other Expenses:
Salaries and employee
benefits 469 496 934 982
Net occupancy expense 234 229 470 448
Data processing 6 5 10 9
Amortization of intangibles 36 36 72 72
Other operating expenses 303 319 582 630
------ ----- ----- -----
Total other expenses 1,048 1,085 2,067 2,141
------ ----- ----- -----
Income before income
taxes 515 281 1,036 615
Income taxes 199 110 397 237
------ ----- ----- -----
Net Income $ 316 172 639 378
====== ===== ===== =====
Income per share of
common stock $ 0.24 0.13 0.48 0.29
====== ====== ===== =====
Weighted average number
of shares outstanding 1,327 1,319 1,327 1,319
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
FIRST GEORGIA HOLDING COMPANY
CONSOLIDATED CASH FLOW STATEMENTS
(Amounts in Thousands)
<CAPTION>
SIX MONTHS ENDED MARCH 31,
1995 1994
--------------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 639 388
Adjustments to reconcile net income
to net cash provided by operations:
Provision for loan losses 61 39
Depreciation and amortization 257 299
Increase (Decrease) in income taxes payable 91 (466)
Increase in interest receivable 140 (26)
Increase in interest payable 68 (136)
Increase (decrease) in other assets 225 149
Increase in accrued expenses and other liab. (740) 566
(Gain)/loss on sale of assets (4) (21)
------ -----
Net Cash Provided By Operating Activities 737 793
------ -----
INVESTING ACTIVITIES:
Purchase of investment securities 814 200
Principal collected on loan securities 102 70
Loans originated 39,330 16,884
Purchase of premises and equipment 16 39
Proceeds from sale of real estate 142 136
Purchase of FHLB stock 0 39
Proceeds from sale of MBS's 0 0
Proceeds from maturity of investments 1,000 0
------ ------
Net Cash Used By Investing Activities 41,403 17,367
------ ------
FINANCING ACTIVITIES:
Net change in deposit accounts 8,125 719
Proceeds from FHLB advances 3,500 500
Repayment of FHLB advances 2,500 0
Net change in borrowings (1,300) 0
Cash Dividends paid 0 62
Change in escrow (11) (38)
------- ------
New Cash Provided by Financing Activities 12,893 1,243
------ ------
Increase In Cash And Cash Equivalents (646) 1,069
Cash and Cash equivalents at beginning of year 3,321 894
------ ------
Cash and cash equivalents at end of $ 2,675 1,962
====== ======
<FN>
See accompanying notes to consolidated financial statements
</TABLE>
<PAGE>
FIRST GEORGIA HOLDING, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly the
financial position of First Georgia Holding, Inc. as of March 31, 1995 and
September 30, 1994. Also included are the results of its operations for the
three months ended March 31, 1995 and 1994 and changes in financial position
for the six months ended March 31, 1995 and 1994. The results of operations
for the interim periods presented are not necessarily indicative of the
results to be expected for the full year.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Bank's Annual Report to Shareholders,
incorporated by reference into the Company's Form 10-KSB for the year ended
September 30, 1994.
(2) EARNINGS PER SHARE
Earnings per common share were computed using the weighted average number of
shares outstanding during the period as shown on the face of the Consolidated
Income Statements.
<PAGE>
FIRST GEORGIA HOLDING, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY
First Georgia Bank (the Bank) has traditionally maintained levels of liquidity
above levels required by regulatory authorities. As a member of the Federal
Home Loan Bank System, the Bank is required to maintain a daily average balance
of cash and eligible liquidity investments equal to a monthly average of 5% of
withdrawable savings and short-term borrowings. The Bank's liquidity level was
10.47% and 7.34% at March 31, 1995 and September 30, 1994, respectively.
The Bank's operational needs, demand for loan disbursements, and savings
withdrawals can be met by loan principal, interest payments received, new
deposits, and excess liquid assets. Significant loan demand, deposit
withdrawal, increased delinquencies, and increased real estate acquired in
settlement of loans (REO) could alter this condition. However, the Bank has
sufficient borrowing capacity through Federal Home Loan Bank (FHLB) advances
and other short-term borrowings to manage such an occurrence. Management
does not foresee any liquidity problems for 1995.
CAPITAL RESOURCES
The following is a reconciliation at December 31 of the Bank's equity capital
under generally accepted accounting principles to regulatory capital.
First Georgia Bank
Stockholder's Equity 10,723,000
Less:
Intangible Assets 1,609,000
----------
Tangible Capital 9,114,000
Plus:
Qualifying intangible assets 1,609,000
----------
Core Capital 10,723,000
Plus:
Supplemental Capital 931,000
----------
Risk-based Capital 11,654,000
Current regulations require institutions to keep minimum regulatory tangible
capital equal to 1.5% of adjusted assets, minimum core capital to adjusted
assets of 4% (the leverage ratio), and risk-based capital to risk-adjusted
assets of 8%. The Office of Thrift Supervision (the OTS) may increase the
minimum core capital, or leverage ratio, based on its assessment of the
institution's risk management systems and the level of total risk in the
individual institution. At March 31, 1995 the Bank met all three capital
requirements.
<PAGE>
The Bank's regulatory capital and the required minimum amounts, at March 31,
1995 are summarized as follows:
Required
Bank Capital Minimum Amount
% $ % $
------ ---------- ------ ----------
Tangible Capital: 6.56% 9,114,000 1.50% 2,109,000
Core Capital: 7.63% 10,723,000 3.00% 4,217,000
Risk-based: 11.76% 11,654,000 8.00% 7,925,000
Excess Over Required Minimum Amount
% $
------ ---------
Tangible Capital: 5.06% 7,005,000
Core Capital: 4.63% 6,506,000
Risk-based: 3.76% 3,729,000
The Federal Deposit Insurance Corporation Improvement Act (FDICIA) required
the Federal banking agencies to take "prompt corrective action" in respect to
institutions that do not meet minimum capital requirements. Along with the
ratios described above, FDICIA also introduced an additional capital
measurement, the Tier 1 risk-based capital ratio. The Tier 1 ratio is the
ratio of Tier 1 or core capital to total risk-adjusted assets. FDICIA
establishes five capital tiers: "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," and
"critically undercapitalized." The regulators summarize their minimum
requirements for the five capital tiers established by the FDICIA as follows:
Tier 1 Risk-based Risk-Based Leverage
Capital Ratio Capital Ratio Ratio
----------------- ------------- --------
Well capitalized 10% or above 6% or above 5% or above
Adequately capitalized 8% or above 4% or above 4% or above
Undercapitalized Less than 8% Less than 4% Less than 3%
Significantly
undercapitalized Less than 8% Less than 4% Less than 3%
Critically
undercapitalized ----------- ----------- 2% or less
An unsatisfactory examination rating may cause an institution's
capitalization category to be lower than suggested by its actual capital
position.
At March 31, 1995, the Bank's Tier 1 risk-based capital ratio was 10.82%.
If a depository institution should fail to meet its regulatory capital
requirements, regulatory agencies can require submission and funding of a
capital restoration plan by the institution, place limits on its activities,
require the raising of additional capital and, ultimately, require the
appointments of a conservator or receiver for the institution.
The Bank's capital position changed during the quarter ended March, 31 1995.
Total capital as well as tangible capital, core capital, and risk-based capital
continued to increase during the quarter. The mix of risk-based assets and
additional earnings are the primary factors for this increase.
<PAGE>
RESULTS OF OPERATIONS
INTEREST INCOME
Interest income on loans increased $392,510 or 16.68% for the quarter ended
March 31, 1995, compared for the same quarter ended March 31, 1994. The six
month period ended March 31, 1995 showed an increase of $522,221, or 10.85%
over the same period in 1994. This increase is largely due to a substantial
increase in the rate of interest earned on loans. The average rate on loans
increased from 8.58% as of March 31, 1994 to 10.05% as of March 31, 1995.
An increase in average loan volume of $5,448,288, or 4.86% as of March 31, 1995
also was a significant factor. Competition for loans remains strong while loan
demand remains steady despite rising interest rates. However, the Bank
continues to be selective in the loans that it makes. Total interest income
increased 16.97%, or $416,065 for the quarter and $561,590 or 11.13% for the
six month ended March 31, 1995 over the same period in 1994.
INTEREST EXPENSE
Interest on deposits increased $140,487 or 12.49% for the three month period
and $154,692 or 6.811% for the six month period ended March 31, 1995 as
compared with the same periods ending March 31, 1994. The main reason for this
increase is the growth in average deposits of $4,011,346 from March 31, 1994 to
March 31, 1995. An increase in the cost of acquiring funds also contributed to
this increase. Total interest expense increased $156,601, or 11.26% for the
quarter ended March 31, 1995 over the quarter ended March 31, 1994 and $180,150
or 6.42% for the six month periods.
NET INTEREST INCOME
Net Interest income increased $259,464 or 23.88% for the quarter and $381,440
or 17.02% for the six month period ended March 31, 1995 over March 31, 1994.
This increase again is the result of higher loan balances and an upward trend
in interest rates. The increase was offset somewhat by an increase in average
deposits and deposit rates rising because of the higher cost of borrowing funds.
PROVISION FOR LOAN LOSSES
Management's evaluation of the risk elements in the loan portfolio is the basis
for the provision for loan losses. The elements include possible declines in
the value of collateral due to changing economic conditions and depreciation
over time, size and composition of the loan portfolio, and current economic
conditions that might affect a borrower's ability to pay. Review of specific
problem loans, regulatory examinations, historical charge-off experience, and
levels of nonperforming and past due loans are other elements considered.
Management reviews these factors frequently and determines if the level of loan
loss allowances is adequate. The provision for loan losses expense increased
$60,572 for the quarter ended March 31, 1995 and $21,572 for the six months
ended March 31, 1995, as compared with the corresponding periods ending
March 31, 1994. Net Interest Income after Provision for Loan Losses for the
quarter ended March 31, 1995 increased $198,892, or 18.31% over the quarter
ended March 31, 1994. For the six month period, net interest income after
provision for loan losses increased 16.34%, or $359,868 over the same period
ended March 31, 1994.
<PAGE>
OTHER INCOME
Other Income for the quarter dropped $1,882, a 0.67% difference from the same
quarter the previous year, and dropped $11,625 or 2.10% for the respective six
month periods. This decrease was in other operating income and is the result
of lower income in several small areas.
OTHER EXPENSES
Management's attention to expense control contributed to a $37,280, or 3.33%
drop in other expenses for the quarter and a $73,493 (3.43%) drop for the six
month period ending March 31, 1995 as compared to March 31, 1994. Net income
for the quarter ended March 31,1995 increased $144,399 or 84.16% over quarter
ended March 31, 1994. The six month period ending March 31, 1995 showed a
$261,110, or 69.01% increase over the six month period ending March 31, 1994.
FINANCIAL CONDITION
ASSETS
Loan volume increased $4,363,958 or 3.84% for the six month period from
September 30, 1994 to March 31, 1995. Even with rising rates and strong
competition in a tight loan market, loans showed strong growth. Interest
bearing deposits in other banks increased 2,869,918 or four times the balance on
September 30, 1994. This substantial increase is due to both an increase in
deposits and $1,000,000 security which matured during the quarter.
LIABILITIES
Deposits increased in the six month period $8,124,856 or 7.86%. The Bank was
able to repay some Federal Home Loan Bank advances, resulting in a $300,000
(1.70%) decrease. The decrease in the advances helped to offset the increased
cost of funds. Although deposit rates rose moderately in the last six months,
the rise has not been very significant.
<PAGE>
PART II
ITEM 4. Submission of Matters to a Vote of Security Holders
The Shareholders Annual Meeting of First Georgia Holding Company
held on January 23, 1995 was conducted with the following votes:
I. The election of KPMG Peat Marwick LLP as independent auditors.
For 1,056,098
Against 2,250
Abstain 4,500
---------
1,062,848
II. The uncontested re-election of James D. Moore and D. Lamont Shell
to the Board of Directors. Directors are voted on as a group, not
separately. Authority to vote for an individual candidate may be
withheld by striking a line through the individual's name on the proxy card.
For 1,049,558
Withhold Authority 13,290
---------
1,062,848
<PAGE>
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.
DATE: 04/30/95 BY: G. FRED COOLIDGE III
--------------------
Senior Vice President
Chief Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000826491
<NAME> FIRST GEORGIA HOLDING
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> SEP-30-1995 SEP-30-1995
<PERIOD-END> MAR-31-1995 MAR-31-1995
<CASH> 2675 2675
<INT-BEARING-DEPOSITS> 3587 3587
<FED-FUNDS-SOLD> 0 0
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 0 0
<INVESTMENTS-CARRYING> 7193 7193
<INVESTMENTS-MARKET> 0 0
<LOANS> 117943 117943
<ALLOWANCE> 931 931
<TOTAL-ASSETS> 140571 140571
<DEPOSITS> 111532 111532
<SHORT-TERM> 0 0
<LIABILITIES-OTHER> 2033 2033
<LONG-TERM> 16448 16448
<COMMON> 1327 1327
0 0
0 0
<OTHER-SE> 9160 9160
<TOTAL-LIABILITIES-AND-EQUITY> 140571 140571
<INTEREST-LOAN> 2853 5528
<INTEREST-INVEST> 118 227
<INTEREST-OTHER> 31 47
<INTEREST-TOTAL> 2894 5608
<INTEREST-DEPOSIT> 1265 2426
<INTEREST-EXPENSE> 1548 2986
<INTEREST-INCOME-NET> 1346 2623
<LOAN-LOSSES> 61 61
<SECURITIES-GAINS> 0 0
<EXPENSE-OTHER> 1048 2067
<INCOME-PRETAX> 515 1036
<INCOME-PRE-EXTRAORDINARY> 515 1036
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 316 639
<EPS-PRIMARY> 0.24 0.48
<EPS-DILUTED> 0.24 0.48
<YIELD-ACTUAL> 8.99 8.71
<LOANS-NON> 2437 2437
<LOANS-PAST> 0 0
<LOANS-TROUBLED> 40 40
<LOANS-PROBLEM> 0 0
<ALLOWANCE-OPEN> 904 984
<CHARGE-OFFS> 53 151
<RECOVERIES> 19 43
<ALLOWANCE-CLOSE> 931 931
<ALLOWANCE-DOMESTIC> 931 931
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 0 0
</TABLE>
