<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 September 30, 1999
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 N/A to N/A
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County Bank Corp
Michigan EIN 38-0746329
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 of 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 as of each of the issuer's classes of
common stock, as of the latest practicable date.
There are 1,186,472 shares of common stock outstanding as of September 30, 1999.
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COUNTY BANK CORP
FORM 10-Q
For the Quarter ended September 30, 1999
<TABLE>
PART I: FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Financial Statements 3
Balance Sheets-
At September 30, 1999 and December 31, 1998 4
Statements of Income-
For the three months and six months ended September 30, 1999 and 1998 5
Statement of Cash Flows-
For the three months and six months ended September 30, 1999 and 1998 6
Item 2. Management's Discussion and Analysis of
Financial Condition and the Results of Operations 7
Part II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 8
All items except those set forth above are inapplicable and have been omitted.
SIGANTURES 9
</TABLE>
2
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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, 1998.
The financial information presented reflects all adjustments (consisting only of
normal recurring adjustments) which are, in the opinion of management, 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.
3
<PAGE> 4
CONSOLIDATED FINANCIAL STATEMENTS
BALANCE SHEETS (in thousands)
<TABLE>
<CAPTION>
September 30 December 31
1999 1998
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<S> <C> <C>
ASSETS
Cash and due from banks $ 9,803 $ 9,372
Investment securities available for sale 24,590 22,479
Investment securities held to maturity 28,834 28,137
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Total investment securities 53,424 50,616
Federal funds sold 3,500 13,700
Loans 133,464 120,175
Less: Reserve for possible loan losses 1,909 1,881
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New loans 131,555 118,294
Bank premises and equipment 4,180 3,201
Interest receivable and other assets 3,326 2,303
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TOTAL ASSETS $ 205,788 $ 197,486
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Demand $ 86,463 $ 80,008
Savings 41,567 43,731
Time 52,370 49,718
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Total Deposits 180,400 173,457
Interest payable and other liabilities 1,646 1,708
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TOTAL LIABILITIES 182,046 175,165
STOCKHOLDERS' EQUITY
Common Stock-$5.00 par value, 1,200,000 shares authorized,
1,186,472 outstanding in 1999 and 593,236 shares outstanding in 1998
2,966
Surplus 8,634 8,634
Undivided profits 11,670 9,820
Unrealized gains and losses on securities available for sale 472 901
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TOTAL STOCKHOLDERS' EQUITY 23,742 22,321
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 205,788 $ 197,486
=========== ==========
</TABLE>
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<TABLE>
<CAPTION>
CONSOLIDATED INCOME STATEMENTS
(in thousands) Three months ended Nine months ended
September 30 September 30
1999 1998 1999 1998
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 2,698 $ 2,654 $ 7,837 $ 8,042
Interest on investments 721 692 2,145 2,075
Interest on Federal funds sold 109 137 338 257
--------- --------- --------- ---------
TOTAL INTEREST INCOME 3,528 3,483 10,320 10,374
INTEREST EXPENSE
Demand deposits 425 409 1,170 1,189
Savings deposits 287 314 869 898
Time deposits 653 652 1,920 1,933
Borrowed funds - - - 2
--------- --------- --------- ---------
TOTAL INTEREST EXPENSE 1,365 1,375 3,959 4,022
--------- --------- --------- ---------
NET INTEREST INCOME 2,163 2,108 6,361 6,352
Provision for possible loan losses 30 30 90 90
--------- --------- --------- ---------
NET INTEREST INCOME AFTER PROVISION
FOR POSSIBLE LOAN LOSSES 2,133 2,078 6,271 6,262
OTHER INCOME
Service fees on loan and deposit accounts 280 281 819 827
Other 321 274 1,027 769
--------- --------- --------- ---------
TOTAL OTHER INCOME 601 555 1,846 1,596
OTHER EXPENSES
Salaries and employee benefits 986 957 2,923 2,764
Net occupancy expense 255 257 736 752
Other 407 397 1,183 1,197
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TOTAL OTHER EXPENSE 1,648 1,611 4,842 4,713
INCOME BEFORE PROVISION FOR FEDERAL
INCOME TAX 1,086 1,022 3,275 3,145
Provision for Federal income tax 282 273 861 848
--------- --------- --------- ---------
NET INCOME $ 804 $ 749 $ 2,414 $ 2,297
========= ========= ========= =========
EARNINGS PER SHARE
Net income $ 0.67 $ 0.63 $ 2.03 $ 1.94
Cash dividend declared $ 0.16 $ 0.16 $ 0.48 $ 2.47
</TABLE>
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<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
(in thousands) Three months ended Nine months ended
September 30 September 30
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net income $ 804 $ 749 $ 2,414 $ 2,297
Adjustments to reconcile net income to net cash
provided from operating activities
Depreciation and amortization 129 283 384 475
Provision for loan losses 30 30 90 90
Net amortization and accretion of securities
219 (40) 129 (120)
Deferred income taxes - - - -
Net gain on sale of investment securities - - - -
(Gain) loss on other real estate owned - - (56) -
Net change in accrued interest receivable (508) (699) (758) (377)
Net change in accrued interest payable and other (232) - (62) (112)
----------- ----------- ----------- ----------
Net cash provided by operating activities 442 323 2,141 2,253
Cash flows form investing activities
Proceeds from sale of investment securities: AFS - - - -
Proceeds from maturities of investment sec: AFS 1,247 2,553 5,147 5,469
Proceeds from maturities of investment sec: HTM 1,286 2,559 5,155 3,090
Purchase of investment securities: AFS (3,006) (4,252) (7,908) (6,288)
Purchase of investment securities: HTM (1,226) (2,706) (5,738) (3,375)
Net (increase) decrease in loans (7,489) 49 (13,403) 2,532
Proceeds from the sale of other real estate - - 100 -
Premises and equipment expenditures (539) (40) (1,642) (501)
----------- ----------- ----------- ----------
Net cash provided from (used in) investing
activities (9,727) (1,837) (18,289) 927
Cash flows from financing activities
Net increase (decrease) in interest bearing and
non-interest bearing demand accounts 4,403 2,720 6,455 3,146
Net increase (decrease) in savings and time
deposits (1,080) 1,936 488 3,137
Cash dividends paid (190) (184) (564) (2,925)
----------- ----------- ----------- ----------
Net cash provided from (used in) financing
activities 3,133 4,472 6,379 3,358
----------- ----------- ----------- ----------
Net increase (decrease) in cash and equivalents (6,152) 2,958 (9,769) 6,538
Cash and equivalents at beginning of year 19,455 16,140 23,072 12,560
----------- ----------- ----------- ----------
Cash and equivalents at end of period $ 13,303 $ 19,098 $ 13,303 $ 19,098
=========== =========== =========== ==========
Cash paid for:
Interest $ 913 $ 1,375 $ 4,195 $ 4,022
Income taxes $ 349 $ 327 $ 901 $ 889
</TABLE>
6
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ITEM 2. MANAGEMENTS' DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
Financial Condition
Loan demand remained strong during the second quarter of 1999. Net loans
increased $7,489,000 during the quarter. The largest growth was in the
commercial loan area. Mortgage demand remained low due to increased rates.
Consumer loan demand increased and the Bank made enough new loans to offset
repayments.
Time and savings deposits decreased during the third quarter of the year. Demand
deposits grew $4,403,000 during the quarter. The decline in savings and time
deposits is consistent with the historical flow of money through the market
area.
The Bank paid a quarterly dividend of $.16 per share during the third quarter.
The Corporation paid a 100% stock dividend on April 20,1999. The Bank's
investment in premises continued to increase during the second quarter as the
Bank completed the construction of a branch in Imlay City, Michigan. The branch
opened August 11, 1999. Imlay City is the second largest population area in
Lapeer County.
The Bank continues to seek investment opportunities to supplement income but
remain liquid enough to meet loan demand. The Bank reinvested maturities and
repayments from the securities portfolio in the securities portfolio. Most
securities purchased in the U.S. Government categories are held as available for
sale. Securities purchased for the state and political subdivision portfolio are
held to maturity.
Results of Operations
Net interest income increased during the period as a result of the growth of
commercial loans. Other income categories performed at the levels consistent
with the previous year. On February 1, 1999, the Bank introduced a fee for
foreign cardholders at its seven ATMs. Management is monitoring the results of
this fee closely. Other expense levels remained consistent with the previous
year's levels.
Risk Factors
Capital levels remain strong and well above regulatory requirements. Provision
for loan losses to average loans ratio is 1.43%, above most peer levels. The
non-performing loans to total loans ratio is .957%. The Corporation remains on
schedule in testing and preparing for the year 2000. The testing of all critical
systems in completed. The contingency plan was completed, tested and submitted
to the Corporations Board of Directors for review. No major problems have been
discovered during its effort to identify issues related to the potential failure
of data processing systems related to calculating or recognizing the year 2000
date in programs.
7
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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 three months ended
September 30, 1999.
8
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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
November 11, 1999 /s/ Joesph H. Black
------------------------------------
Joseph H. Black
Treasurer
9
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Exhibit Index
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<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 9,803
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 3,500
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 53,424
<INVESTMENTS-MARKET> 53,263
<LOANS> 133,464
<ALLOWANCE> 1,909
<TOTAL-ASSETS> 205,788
<DEPOSITS> 180,400
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,646
<LONG-TERM> 0
0
0
<COMMON> 2,966
<OTHER-SE> 22,096
<TOTAL-LIABILITIES-AND-EQUITY> 205,788
<INTEREST-LOAN> 7,837
<INTEREST-INVEST> 2,145
<INTEREST-OTHER> 338
<INTEREST-TOTAL> 10,320
<INTEREST-DEPOSIT> 3,959
<INTEREST-EXPENSE> 3,959
<INTEREST-INCOME-NET> 6,361
<LOAN-LOSSES> 90
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 4,842
<INCOME-PRETAX> 3,275
<INCOME-PRE-EXTRAORDINARY> 3,275
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,414
<EPS-BASIC> 2.03
<EPS-DILUTED> 2.03
<YIELD-ACTUAL> 7.70
<LOANS-NON> 1,256
<LOANS-PAST> 141
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,881
<CHARGE-OFFS> 84
<RECOVERIES> 21
<ALLOWANCE-CLOSE> 1,909
<ALLOWANCE-DOMESTIC> 1,042
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 867
</TABLE>
