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 December 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 December 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
December 31, 1995 and September 30, 1995 3
Consolidated Income Statements for the
Three Months Ended December 31, 1995 & 1994 4
Consolidated Cash Flow Statements for
the Three Months ended December 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 5: Other Information 11
Item 6: Exhibits and reports on Form 8-K 11
<PAGE>
FIRST GEORGIA HOLDING COMPANY
CONSOLIDATED BALANCE SHEETS
12/31/95 9/30/95
---------------- ------------
Assets:
Cash $ 1,961,790 2,543,495
Interest bearing deposits in other banks 1,841,963 2,352,183
Investment securities to be held to maturity 9,445,524 9,180,978
Loans receivable, net 113,968,433 110,432,233
Real estate acquired in settlement of loans 238,770 206,334
Federal Home Loan Bank stock, at cost 1,575,700 1,575,700
Premises and equipment, net 3,373,848 3,388,207
Accrued interest receivable 844,278 751,108
Intangible assets, net 1,375,334 1,408,268
Other assets 956,181 903,891
----------- -----------
$135,581,821 132,742,397
============ ===========
Liabilities and Stockholders' Equity
Liabilities:
Deposits $ 108,092,277 106,527,689
Federal Home Loan Bank advances 13,798,000 11,948,000
Advance payments by borrowers for property
taxes and insurance 62,789 90,238
Other borrowed money 192,000 192,000
Accrued expenses and other liabilities 2,180,649 2,859,484
------------ -----------
124,325,715 121,617,411
------------ -----------
Stockholders' Equity
Common stock, $1.00 par value. Authorized
15,000,000 shares; issued and outstanding
1,326,641 shares 1,326,641 1,326,641
Additional paid-in capital 5,786,164 5,786,164
Retained earnings 4,143,301 4,012,181
------------ -----------
11,256,106 11,124,986
------------ -----------
$ 135,581,821 132,742,397
============ ===========
[FN]
See accompanying notes to consolidated financial statements.
<PAGE>
FIRST GEORGIA HOLDING COMPANY
CONSOLIDATED INCOME STATEMENTS
Three Months Ended
-------------------------------
12/31/95 12/31/94
-------------------------------
Interest Income:
Loans $ 2,701,524 2,589,421
Investment securities 152,971 109,900
Other 23,687 15,377
----------- ---------
Total interest income 2,878,182 2,714,698
----------- ---------
Interest Expense:
Deposits 1,433,800 1,160,618
Advances and other borrowings 218,801 277,318
----------- ---------
Total interest expense 1,652,601 1,437,936
----------- ---------
Net interest income 1,225,581 1,276,762
Provision for Loan Losses 18,990 0
----------- ---------
Net interest income after
provision for loan losses 1,206,591 1,276,762
----------- ---------
Other Income:
Loan fees 66,696 85,857
Deposit service charges 133,282 158,570
Other operating income 17,580 19,405
----------- ---------
Total other income 217,558 263,832
----------- ---------
Other Expenses:
Salaries and employee benefits 447,141 465,416
Net occupancy expense 243,581 235,323
Data processing 1,581 3,974
Amortization of intangibles 32,934 35,826
Loss on sale of foreclosed property 6,719 994
Federal insurance premiums 66,249 75,000
Other operating expenses 214,736 203,520
------------ ---------
Total other expenses 1,012,941 1,020,053
------------ ---------
Income before income taxes 411,208 520,541
Income taxes 147,423 197,785
------------ ----------
Net Income $ 263,785 322,756
============= ===========
Income per share of common stock $ 0.18 0.23
============= ===========
Weighted average number of shares outstanding 1,326,641 1,326,641
[FN]
See accompanying notes to consolidated financial statements.
<PAGE>
FIRST GEORGIA HOLDING COMPANY
CONSOLIDATED CASH FLOW STATEMENTS
1995 1994
-------------- ------------
OPERATING ACTIVITIES:
Net income $ 263,785 322,756
Adjustments to reconcile net income
to net cash provided by operations:
Provision for loan losses 18,990 0
Depreciation and amortization 1,265,569 1,795,005
Increase (Decrease) in income taxes payable (22,560) 185,274
Increase in interest receivable 93,170 101,683
Increase in interest payable 34,025 16,136
Increase (decrease) in other assets 52,290 (1,968)
Increase in accrued expenses and other liab. (678,835) (87,880)
(Gain)/loss on sale of assets 6,719 (994)
----------- ----------
Net Cash Provided By Operating Activities 1,033,153 2,330,012
---------- ----------
INVESTING ACTIVITIES:
Purchase of investment securities 450,000 0
Principal collected on loan securities 145,872 42,231
Loans originated 17,642,000 17,222,000
Purchase of premises and equipment 81,506 10,306
Proceeds from sale of real estate 22,479 0
Purchase of FHLB stock 0 0
Proceeds from sale of MBS's 0 0
Proceeds from maturity of investments 0 0
----------- -----------
Net Cash Used By Investing Activities 18,341,857 17,274,537
----------- -----------
FINANCING ACTIVITIES:
Net change in deposit accounts 1,564,588 2,164,585
Proceeds from FHLB advances 6,350,000 3,500,000
Repayment of FHLB advances 4,500,000 2,000,000
Net change in borrowings 1,850,000 (800,000)
Cash Dividends paid 132,664 79,598
Change in escrow (27,449) (8,290)
------------ -----------
New Cash Provided by Financing Activities 14,369,803 6,935,893
Increase In Cash And Cash Equivalents (581,705) 143,899
Cash and Cash equivalents at beginning of year 2,543,495 3,321,182
----------- ---------
Cash and cash equivalents at end of quarter $ 1,961,790 3,465,081
========== =========
[FN]
See accompanying notes to consolidated financial statements.
<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 December 31, 1995 and September 30, 1995. Also
included are the results of its operations for the
three months ended December 31, 1995 and 1994 and
changes in financial position for the three months
ended December 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, 1995.
(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 8.91% and 13.49% at
December 31, 1995 and September 30, 1995,
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. Management
does not foresee any liquidity problems for 1995.
Capital Resources
- -----------------
The following is a reconciliation at December
31, 1995 of the Bank's equity capital under generally
accepted accounting principles to regulatory capital.
First Georgia Bank
Stockholder's Equity 11,385,000
Less:
Intangible Assets 1,375,000
-----------
Tangible Capital 10,010,000
Plus:
Qualifying intangible assets 1,375,000
-----------
Core Capital 11,385,000
Plus:
Supplemental Capital 1,008,000
-----------
Risk-based Capital 12,393,000
===========
Current regulations require institutions to keep
minimum regulatory tangible capital equal to 1.5% of
adjusted assets, minimum core capital to adjusted
assets of 3% (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 December 31, 1995 the Bank met all
three capital requirements.
The Bank's regulatory capital and the required
minimum amounts, at December 31, 1995 are summarized
as follows:
<PAGE>
Required
Bank Capital Minimum Amount
% $ % $
------- ------------ ------- -----------
Tangible Capital: 7.46% 10,010,000 1.50% 2,033,730
Core Capital: 8.40% 11,385,000 3.00% 4,067,000
Risk-based: 11.39% 12,393,000 8.00% 8,708,240
Excess Over Required Minimum Amount
% $
----------- ---------------
Tangible Capital: 5.96% 7,976,270
Core Capital: 5.40% 7,317,540
Risk-based: 3.39% 3,684,760
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 December 31, 1995, the Bank's Tier 1 risk-
based capital ratio was 10.46%. 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.
<PAGE>
The Bank's capital position changed during the
quarter ended December 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.
RESULTS OF OPERATIONS
Interest income
- ---------------
Interest income on loans increased $112,103 or
4.33% for the quarter ended December 31, 1995,
compared for the same quarter ended December 31, 1994.
This increase is largely due to a substantial increase
in the average rate on loans, which increased from
8.84% last year to 9.48% at December 31, 1995.
Competition for loans remains strong, and loan demand
has increased somewhat. However, the Bank continues
to be selective in the loans that it makes.
Management expects loan demand to increase further
because of the downward trends in interest rates.
Interest income on investments increased $43,071
or 39.19% for the quarter ended December 31, 1995 as
compared to the same time last year. The Bank
invested excess cash reserves into several new
securities. Total interest income increased 6.02%, or
$163,484 for the quarter ended December 31, 1995 over
the same period in 1994.
Interest expense
- ----------------
Interest on deposits increased $273,182 or
23.54% for the three month period ended December 31,
1995 as compared with the same periods ending December
31, 1994. The main reason for this increase is the
growth in average deposits of $2,276,457 from December
31, 1994 to December 31, 1995. Interest on advances
and other borrowings decreased $58,517, or 21.10% over
the comparable three month periods. Interest rates
on advances have dropped significantly, and the rate
on the Bank's line of credit with another institution
is tied to the Prime Rate, which also has decreased
substantially from December 31, 1994 to December 31,
1995. Total interest expense increased $214,665, or
14.93% for the quarter ended December 31, 1995 over
the quarter ended December 31, 1994.
Net Interest Income
- -------------------
Net Interest income decreased $51,181 or 4.01%
for the quarter ended December 31, 1995 over December
31, 1994. This decrease is the result of an increase
in deposit balances for which the increase in interest
rates on loans could not compensate.
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 $18,990
for the quarter ended December 31, 1995 as compared
with the corresponding period ending December 31,
1994. Net Interest Income after Provision for Loan
Losses for the quarter ended December 31, 1995
decreased $70,171, or 5.50% over the quarter ended
December 31, 1994.
<PAGE>
Other Income
- ------------
Other Income for the quarter dropped $46,274, a
17.54% difference from the same quarter the previous
year. Deposit services charges decreased $25,288
(15.95%) for the quarter ended December 31, 1995. As
the Bank tries to retain exceptional customers, fee
income on non-sufficient funds has dropped
substantially. Loan Fees also decreased $19,161 or
22.32% for the quarter, due primarily to a drop in the
average loans outstanding.
Other Expenses
- --------------
Other expenses decreased $7,112 (0.70%) for the
quarter ended December 31, 1995 as compared to
December 31, 1994. This decrease is the result of a
$18,275 drop in Salaries and Employee Benefits, or
3.93%, at December 31, 1995 compared to December 31,
1994. As people leave the employment of the Bank,
their duties have been successfully overtaken by
remaining employees, thus eliminating the need to hire
replacements. Management's continues to diligently
focus on expense control continues to show improved
results. Net income for the quarter ended
December 31,1995 increased $50,362 or 18.27% over
quarter ended, December 31 1994.
FINANCIAL CONDITION
Assets
- -------
Loan volume increased $3,536,200 or 3.20% for
the three month period from September 30, 1995 to
December 31, 1995. Even with strong competition in a
tight loan market, loans showed strong growth. Cash
decreased $581,705 (22.87%) and interest bearing
deposits in other banks also decreased $510,220
(21.69%) for the quarter ended December 31,1995 as
compared to December 31,1994. As loan balances grew,
the Bank's cash balances were used for funding.
Liabilities
- -----------
Deposits increased $1,564,588 or 1.47% from
December 31, 1994 to December 31, 1995. The Bank also
increased Federal Home Loan Bank advances this quarter
by $1,850,000 over last year's corresponding quarter.
This increase in borrowings was necessary to help fund
new loans.
<PAGE>
PART II
ITEM 5. OTHER INFORMATION
The Company declared a $0.10 per share
dividend on all shares outstanding as of
December 1, 1995. The dividend was paid
on December 15, 1994.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
No reports were filed on form 8-K.
<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: BY: G. FRED COOLIDGE III
--------------------
G. Fred Coolidge III
Senior Vice President
Chief Financial Officer
<PAGE>
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<NAME> FIRST GEORGIA HOLDING
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