<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, 1998
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, 1998.
<PAGE> 2
COUNTY BANK CORP
FORM 10-Q
For the Quarter Ended June 30, 1998
INDEX
PART I: FINANCIAL INFORMATION PAGE
Item 1. Financial Statements 2
Introduction-
Balance Sheets - 3
At June 30, 1998 and December 31, 1997
Statements of Income - 4
For the three months and six months ended June 30, 1998 and 1997
Statement of Cash Flows - 5
For the three months and six months ended June 30, 1998 and 1997
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
<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, 1997.
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> 4
CONSOLIDATED STATEMENTS
BALANCE SHEETS (in thousands)
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1998 1997
<S> <C> <C>
ASSETS
Cash and due from banks........................................ 9,490 9,010
Investment securities available for sale........................ 17,581 18,223
Investment securities held to maturity......................... 29,282 29,064
-------- --------
Total investment securities................................ 46,863 47,287
Federal funds sold ............................................ 6,650 3,550
Loans.......................................................... 121,106 123,604
Less: Reserve for possible loan losses...................... 2,006 1,957
-------- --------
Net loans................................................ 119,100 121,647
Bank premises & equipment...................................... 3,398 3,206
Interest receivable and other assets........................... 1,819 2,141
-------- --------
TOTAL ASSETS................................................ 187,320 186,841
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Demand...................................................... 74,526 74,100
Savings..................................................... 42,196 40,576
Time ....................................................... 47,825 48,243
-------- --------
Total deposits............................................ 164,547 162,919
Interest payable and other liabilities......................... 1,528 1,640
-------- --------
TOTAL LIABILITIES........................................... 166,075 164,559
STOCKHOLDERS' EQUITY
Common stock-$5.00 par value, 1,200,000 shares authorized and
593,236 shares outstanding ................................... 2,966 2,966
Surplus........................................................ 8,634 8,634
Undivided profits.............................................. 8,842 10,035
Unrealized gains on securities available for sale 803 647
-------- --------
TOTAL STOCKHOLDERS' EQUITY.................................. 21,245 22,282
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.................. 187,320 186,841
======== ========
</TABLE>
<PAGE> 5
CONSOLIDATED INCOME STATEMENTS
(in thousands)
<TABLE>
<CAPTION>
THREE MONTHS FOR THE SIX MONTH
ENDED ENDED
JUNE 30 JUNE 30
<S> <C> <C> <C> <C>
INTEREST INCOME 1998 1997 1998 1997
Interest and fees on loans......................... 2,698 2,614 5,388 5,137
Interest on investment securities: 673 696 1,383 1,413
Interest on Federal funds sold..................... 85 114 120 147
------ ------ ------ ------
TOTAL INTEREST INCOME........................ 3,456 3,424 6,891 6,697
INTEREST EXPENSE
Demand deposits................................. 215 152 780 680
Savings deposits................................ 473 546 584 663
Time deposits................................... 639 610 1,281 1,219
Borrowed funds.................................. 0 2 2 2
------ ------ ------ ------
TOTAL INTEREST EXPENSE....................... 1,327 1,310 2,647 2,564
------ ------ ------ ------
NET INTEREST INCOME................................ 2,129 2,114 4,244 4,133
Provision for possible loan losses................. 30 30 60 60
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES....................... 2,099 2,084 4,184 4,073
OTHER INCOME
Service fees on loan and deposit accounts.......... 279 273 546 543
Other.............................................. 255 229 495 459
------ ------ ------ ------
TOTAL OTHER INCOME........................... 534 502 1,041 1,002
OTHER EXPENSES
Salaries and employee benefits..................... 913 870 1,807 1,741
Net occupancy expense.............................. 247 224 495 432
Other.............................................. 397 386 800 777
------ ------ ------ ------
TOTAL OTHER EXPENSE.......................... 1,557 1,480 3,102 2,950
------ ------ ------ ------
INCOME BEFORE PROVISION FOR
FEDERAL INCOME TAX.............................. 1,076 1,106 2,123 2,125
Provision for Federal income tax................... 292 311 575 586
------ ------ ------ ------
NET INCOME......................................... 784 795 1,548 1,539
====== ====== ====== ======
EARNINGS PER SHARE
Net Income......................................... $1.32 $1.34 $2.61 $2.59
Cash Dividend Declared............................. $0.31 $0.28 $4.62 $0.56
</TABLE>
<PAGE> 6
STATEMENT OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net income...................................................... 784 795 1,548 1,539
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation and amortization................................... 97 148 192 265
Provision for loan losses....................................... 30 30 60 60
Net amortization and accretion of securities.................... (41) 45 (80) 96
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.......................... 0 (6) 0 (13)
Net change in accrued interest receivable....................... 862 218 322 (148)
Net change in accrued interest payable and other................ (141) (156) (112) (125)
------ ------ ------ ------
Net cash provided by operating activities....................... 1,591 1,074 1,930 1,674
------ ------ ------ ------
Cash flows from investing activities
Proceeds from sale of investment securities: AFS................ 0 0 0 0
Proceeds from maturities of investment securities: AFS............. 241 2,042 2,916 3,012
Proceeds from maturities of investment securities: HTM.......... 365 1,085 531 1,905
Purchase of investment securities: AFS.......................... (1,008) (325) (2,036) (325)
Purchase of investment securities: HTM.............................. (447) (1,876) (669) (2,367)
Net (increase) decrease in loans................................ 2,344 (506) 2,483 (1,818)
Proceeds from the sale of Other Real Estate..................... 0 74 0 87
Premises and equipment expenditures............................. (224) (7) (461) (84)
------ ------ ------ ------
Net Cash provided from (used in) investing activities 1,271 487 2,764 410
------ ------ ------ ------
Cash flows from financing activities
Net increase (decrease) in interest bearing
and non-interest bearing demand accounts...................... (1,846) 1,678 426 1,013
Net increase (decrease) in savings and time deposits............ 2,475 (2,413) 1,201 32
Cash dividends paid............................................. (2,557) (166) (2,741) (332)
------ ------ ------ ------
Net Cash provided from (used in)financing activities............ (1,928) (901) (1,114) 713
------ ------ ------ ------
Net increase (decrease) in cash and equivalents................. 934 660 3,580 2,797
Cash and equivalents at beginning of year 15,206 11,963 12,560 9,826
------ ------ ------ ------
Cash and equivalents at end of period 16,140 12,623 16,140 12,623
====== ====== ====== ======
Cash paid for:
Interest........................................................ 1,788 1,384 3,108 2,564
Income taxes.................................................... 562 379 562 379
</TABLE>
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition and the
Results of Operations.
Financial Condition
Cash dividends paid totaled $2,557,000 for the second quarter. A one time
dividend of $4.00 per share was paid on April 24, 1998. This dividend was in
addition to a regular quarterly dividends of $184,000 paid in March and June.
Net loans decreased $2,344,000 during the quarter. Net increases in deposits
totaled $629,000. Net activity in the investment portfolio resulted in a use of
cash of $849,000. Premises and equipment expenditures totaled $224,000 for the
quarter. Net cash provided by operating activities resulted in cash
contributions of $1,591,000.
Results of Operations
Net income for the quarter increased 2.6% over the first quarter of 1998
Earnings per share reached $1.32. Noninterest 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
1.66%. The non performing loans to total loans ratios is .89%. 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. The
Board of Directors of the Corporation declared a one time $4.00 per share
dividend payable April 24, 1998 to shareholders of record on April 10, 1998 at
the March 18, 1998 meeting. This action recognized the high levels of capital,
acknowledges the support of the shareholder and maintains adequate protection
for the depositors.
<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, 1998.
<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, 1998
/s/ Joseph H. Black
----------------------------------
Joseph H. Black, Treasurer
<PAGE> 10
Exhibit Index
-------------
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 9,490
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 6,650
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 46,863
<INVESTMENTS-MARKET> 47,618
<LOANS> 121,106
<ALLOWANCE> 2,006
<TOTAL-ASSETS> 187,320
<DEPOSITS> 164,547
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,528
<LONG-TERM> 0
0
0
<COMMON> 2,966
<OTHER-SE> 18,279
<TOTAL-LIABILITIES-AND-EQUITY> 187,320
<INTEREST-LOAN> 5,388
<INTEREST-INVEST> 1,383
<INTEREST-OTHER> 120
<INTEREST-TOTAL> 6,891
<INTEREST-DEPOSIT> 2,647
<INTEREST-EXPENSE> 2,647
<INTEREST-INCOME-NET> 4,244
<LOAN-LOSSES> 60
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,102
<INCOME-PRETAX> 2,123
<INCOME-PRE-EXTRAORDINARY> 2,123
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,548
<EPS-PRIMARY> 2.61
<EPS-DILUTED> 2.61
<YIELD-ACTUAL> 8.19
<LOANS-NON> 915
<LOANS-PAST> 1,220
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 35
<RECOVERIES> 25
<ALLOWANCE-CLOSE> 2,006
<ALLOWANCE-DOMESTIC> 50
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,956
</TABLE>
