<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C 20549
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
--- THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1997
Commission file number: 0-17482
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
--- THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from______ to______
County Bank Corp
Michigan EIN 38-0746239
83 W. Nepessing St., Lapeer, MI 48446
(810) 664-2977
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
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of latest practicable date.
There are 593,236 shares of common stock ($5.00 par value) outstanding
as of June 30, 1997.
<PAGE> 2
COUNTY BANK CORP
FORM 10-Q
For the Quarter Ended June 30, 1997
INDEX
<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Financial Statements 2
. Introduction-
. Balance Sheets - 3
At June 30, 1997 and December 31, 1996
. Statements of Income - 4
For the three months and six months ended June 30, 1997 and 1996
. Statement of Cash Flows - 5
For the three months and six months ended June 30, 1997 and 1996
Item 2. Management's Discussion and Analysis of 6
Financial Condition and Results of Operations
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 7
All items exept those set forth above are inapplicable and have been omitted
SIGNATURES 8
</TABLE>
<PAGE> 3
Part I - Financial Information
Item I - Financial Statements
Introduction to Financial Statements
The consolidated financial statements of County Bank Corp and subsidiary,
Lapeer County Bank & Trust Co., have been prepared, without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted pursuant to such rules and regulations. The Company believes that the
disclosures are adequate to make the information presented not misleading when
read in conjunction with financial statements and the notes thereto included in
County Bank Corp's Form 10-K as filed with the Securities and Exchange
Commission for the year ended December 31, 1996.
The financial information presented reflects all adjustments (consisting only
of normal recurring adjustments) which are, in the opinion of mangement,
necessary for a fair statement of the results for the interim periods
presented. The results for interim periods are not necessarily indicative of
the results to be expected for the year.
Page 2
<PAGE> 4
CONSOLIDATED STATEMENTS
<TABLE>
<CAPTION>
BALANCE SHEETS (in thousands) JUNE 30 DECEMBER 31
1997 1996
<S> <C> <C>
ASSETS
Cash and due from banks............................................. 9,523 8,626
Investment securities available for sale............................ 17,012 19,330
Investment securities held to maturity.............................. 28,445 28,079
---------- ---------
Total investment securities..................................... 45,457 47,409
Federal funds sold ................................................. 3,100 1,200
Loans............................................................... 119,174 117,474
Less: Reserve for possible loan losses........................... 1,878 1,805
---------- ---------
Net loans..................................................... 117,296 115,669
Bank premises & equipment........................................... 2,577 2,715
Interest receivable and other assets................................ 2,329 2,167
---------- ---------
TOTAL ASSETS..................................................... 180,282 177,786
========== =========
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Demand........................................................... 69,627 68,614
Savings.......................................................... 41,437 41,292
Time ............................................................ 46,499 46,612
---------- ---------
Total deposits................................................. 157,563 156,518
Interest payable and other liabilities.............................. 1,517 1,406
---------- ---------
TOTAL LIABILITIES................................................ 159,080 157,924
STOCKHOLDERS' EQUITY
Common stock-$5.00 par value, 1,200,000 shares authorized and
593,236 shares outstanding in 1996 and 1997........................ 2,966 2,966
Surplus............................................................. 8,634 8,634
Undivided profits................................................... 9,089 7,882
Unrealized gains on securities available for sales.................. 513 380
---------- ---------
TOTAL STOCKHOLDERS' EQUITY....................................... 21,202 19,862
---------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY....................... 180,282 177,786
========== =========
</TABLE>
Page 3
<PAGE> 5
CONSOLIDATED INCOME STATEMENTS
<TABLE>
<CAPTION>
(in thousands) THREE MONTHS THE SIX MONTHS
ENDED ENDED
JUNE 30 JUNE 30
INTEREST INCOME 1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest and fees on loans.................................. 2,614 2,344 5,137 4,636
Interest on investment securities: 696 678 1,413 1,367
Interest on Federal funds sold.............................. 114 83 147 151
----- ----- ------- ------
TOTAL INTEREST INCOME................................. 3,424 3,105 6,697 6,154
INTEREST EXPENSE
Demand deposits.......................................... 152 288 680 562
Savings deposits......................................... 546 308 663 613
Time deposits............................................ 610 583 1,219 1,184
Borrowed funds........................................... 2 1 2 1
----- ----- ------- ------
TOTAL INTEREST EXPENSE................................ 1,310 1,180 2,564 2,360
----- ----- ------- ------
NET INTEREST INCOME......................................... 2,114 1,925 4,133 3,794
Provision for possible loan losses.......................... 30 30 60 60
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES................................ 2,084 1,895 4,073 3,734
OTHER INCOME
Service fees on loan and deposit accounts................... 273 288 543 565
Other....................................................... 229 423 459 626
----- ----- ------- ------
TOTAL OTHER INCOME.................................... 502 711 1,002 1,191
OTHER EXPENSES
Salaries and employee benefits.............................. 870 855 1,741 1,729
Net occupancy expense....................................... 224 194 432 385
Other....................................................... 386 366 777 763
----- ----- ------- ------
TOTAL OTHER EXPENSE................................... 1,480 1,415 2,950 2,877
----- ----- ------- ------
INCOME BEFORE PROVISION FOR
FEDERAL INCOME TAX....................................... 1,106 1,191 2,125 2,048
Provision for Federal income tax............................ 311 343 586 573
----- ----- ------- ------
NET INCOME.................................................. 795 848 1,539 1,475
===== ===== ======= ======
EARNINGS PER SHARE
Net Income.................................................. $1.34 $1.43 $2.59 $2.49
Cash Dividend Declared...................................... $0.28 $0.25 $0.56 $0.50
</TABLE>
Page 4
<PAGE> 6
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS THREE MONTHS ENDED SIX MONTHS ENDED
(in thousands) JUNE 30 JUNE 30
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net income................................................ 795 848 1,539 1,475
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation and amortization............................. 148 100 265 215
Provision for loan losses................................. 30 30 60 60
Net amortization and accretion of securities.............. 45 83 96 134
Deferred income taxes..................................... 0 0 0 0
Net gain on sale of investment securities................. 0 0 0 0
(Gain) loss on other real estate owned.................... (6) (7) (13) (7)
Net change in accrued interest receivable................. 218 152 (148) (114)
Net change in accrued interest payable and other.......... (156) 68 (125) 137
-------- ------- ------- -------
Net cash provided by operating activities................. 1,074 1,274 1,674 1,900
-------- ------- ------- -------
Cash flows from investing activities
Proceeds from sale of investment securities: AFS.......... 0 0 0 0
Proceeds from maturities of investment securities: AFS.... 2,042 262 3,012 1,683
Proceeds from maturities of investment securities: HTM.... 1,085 2,099 1,905 3,914
Purchase of investment securities: AFS.................... (325) (3,000) (325) (4,020)
Purchase of investment securities: HTM.................... (1,876) (1,334) (2,367) (1,334)
Net (increase) decrease in loans.......................... (506) (2,142) (1,818) (3,872)
Proceeds from the sale of Other Real Estate............... 74 39 87 224
Premises and equipment expenditures....................... (7) (32) (84) (253)
-------- ------- ------- -------
Net Cash provided from (used in) investing activities..... 487 (4,108) 410 (3,658)
-------- ------- ------- -------
Cash flows from financing activities
Net increase (decrease) in interest bearing
and non-interest bearing demand accounts................ 1,678 3,321 1,013 4,344
Net increase (decrease) in savings and time deposits...... (2,413) (947) 32 (1,771)
Cash dividends paid....................................... (166) (149) (332) (297)
-------- ------- ------- -------
Net Cash provided from (used in)financing activities...... (901) 2,225 713 2,276
-------- ------- ------- -------
Net increase (decrease) in cash and equivalents........... 660 (609) 2,797 518
Cash and equivalents at beginning of year................. 11,963 14,204 9,826 13,077
-------- ------- ------- -------
Cash and equivalents at end of period..................... 12,623 13,595 12,623 13,595
======== ======= ======= =======
Cash paid for:
Interest.................................................. 1,384 1,180 2,564 2,361
Income taxes.............................................. 536 241 580 482
</TABLE>
Page 5
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition and the
Results of Operations.
Financial Condition
New loan production continued through the second quarter of 1997. Net
increases in loans totaled $506,000 after increases of $1,312,000 during the
first quarter. Net decreases in deposits of 735,000 after increases in
deposits of $1,780,000 during the first quarter resulted in net increases in
deposits of $1,045,000 year to date. A decline in deposits during the second
quarter is not unusual in the Corporation's market.
Loan demand was met with cash provided by maturing investments. Income from
operations and net increases in the deposit accounts resulted in net increases
to cash and cash equivalents. Management expects continued loan growth during
the third quarter and is remaining liquid to meet the demand from loan
customers.
Results of Operations
Net income per share for the quarter increased to $1.34 from the first quarter
earnings per share of $1.25. The growth in loans was the primary contributor
to increased interest income. Non interest income and expense categories
remained at levels consistent with the Corporation's recent performance.
Risk Factors
Loan quality remains high. The reserve for loan losses to gross loans ratio is
1.58%. The non performing loans to total loans ratios is .83%. This ratio
compares loans past due 90 days or more and loans in non-accrual status to
total loans. This is an historically low ratio and indicates a high quality
portfolio.
The Corporation remains liability sensitive in relation to the risk of changes
in interest rates. The demand for residential mortgages remains strong in the
market area. Options to maintain both repricing opportunities for assets and
market tendencies for deposits are under constant review.
Capital
Strong net income performance and conservative dividend payments result in
increased capital. The moderate growth results in improving capital ratios.
Page 6
<PAGE> 8
Part II.
Item 6. Exhibits and Reports on Form 8-K.
A) Not Applicable
B) A Form 8-K has not been filed during the six months ended June 30,
1997.
Page 7
<PAGE> 9
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.
COUNTY BANK CORP
Date August 11, 1997
/s/ Joseph H. Black, Treasurer
----------------------------------
Joseph H. Black, Treasurer
Page 8
<PAGE> 10
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 9,523
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 3,100
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 45,457
<INVESTMENTS-MARKET> 45,705
<LOANS> 119,174
<ALLOWANCE> 1,878
<TOTAL-ASSETS> 180,282
<DEPOSITS> 157,563
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,517
<LONG-TERM> 0
0
0
<COMMON> 2,966
<OTHER-SE> 18,236
<TOTAL-LIABILITIES-AND-EQUITY> 180,282
<INTEREST-LOAN> 5,137
<INTEREST-INVEST> 1,413
<INTEREST-OTHER> 147
<INTEREST-TOTAL> 6,697
<INTEREST-DEPOSIT> 2,564
<INTEREST-EXPENSE> 4,133
<INTEREST-INCOME-NET> 60
<LOAN-LOSSES> 30
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,950
<INCOME-PRETAX> 2,125
<INCOME-PRE-EXTRAORDINARY> 2,125
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,539
<EPS-PRIMARY> 2.59
<EPS-DILUTED> 2.59
<YIELD-ACTUAL> 8.12
<LOANS-NON> 252
<LOANS-PAST> 1,750
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 45
<RECOVERIES> 58
<ALLOWANCE-CLOSE> 1,878
<ALLOWANCE-DOMESTIC> 50
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,828
</TABLE>
