<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 March 31, 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 to
----- -----
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 593,236 shares of common stock outstanding as of March 31, 1999.
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COUNTY BANK CORP
FORM 10-Q
For the Quarter ended March 31, 1999
<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Financial Statements
Balance Sheets-
At March 31, 1999 and December 31, 1998 4
Statements of Income-
For the three months ended March 30, 1999 and 1998 5
Statement of Cash Flows
For the three months ended March 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 of Form 8-K 8
All items except those set forth above are inapplicable and have been omitted.
SIGNATURES 9
</TABLE>
2
<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, 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>
March 31 December 31
1999 1998
<S> <C> <C>
ASSETS
Cash and due from banks $ 10,438 $ 9,372
Investment securities available for sale 23,856 22,479
Investment securities held to maturity 28,145 28,137
-------- -----------
Total investment securities 52,001 50,616
Federal funds sold 6,500 13,700
Loans 123,249 120,175
Less: Reserve for possible loan losse 1,896 1,881
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Net loans 121,353 118,294
Bank premises and equipment 3,831 3,201
Interest receivable and other assets 2,868 2,303
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TOTAL ASSETS $196,991 $ 197,486
======== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Demand $ 80,377 $ 80,008
Savings 43,276 43,731
Time 48,819 49,718
-------- -----------
Total deposits 172,472 173,457
Interest payable and other liabilities 1,790 1,708
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TOTAL LIABILITIES 174,262 175,165
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 10,410 9,820
Unrealized gains and losses on securities available for sale 719 901
-------- -----------
TOTAL STOCKHOLDERS' EQUITY 22,729 22,321
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TOTAL LIABILITES AND STOCKHODERS' EQUITY $196,991 $ 197,486
======== ===========
</TABLE>
4
<PAGE> 5
CONSOLIDATED INCOME STATEMENTS
(in thousands)
<TABLE>
<CAPTION>
Three months ended
March 31
1999 1998
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 2,515 $ 2,690
Interest on investments 703 710
Interest on Federal funds sold 121 35
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TOTAL INTEREST INCOME 3,339 3,435
INTEREST EXPENSE
Demand deposits 360 390
Savings deposits 294 286
Time deposits 637 642
Borrowed funds - 2
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TOTAL INTEREST EXPENSE 1,291 1,320
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NET INTEREST INCOME 2,048 2,115
Provision for possible loan losses 30 30
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NET INTEREST INCOME AFTER PROVISION
FOR POSSIBLE LOAN LOSSES 2,018 2,085
OTHER INCOME
Service fees on loan and deposit accounts 265 267
Other 321 240
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TOTAL OTHER INCOME 586 507
OTHER EXPENSES
Salaries and employee benefits 941 894
Net occupancy expense 243 248
Other 375 403
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TOTAL OTHER EXPENSE 1,559 1,545
INCOME BEFORE PROVISION FOR FEDERAL
INCOME TAX 1,045 1,047
Provision for Federal income tax 273 283
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NET INCOME 772 764
============= ===========
EARNINGS PER SHARE
Net income $ 1.30 $ 1.29
Cash dividend declared $ 0.31 $ 4.31
</TABLE>
5
<PAGE> 6
STATEMENT OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Three months ended
March 31
1999 1998
<S> <C> <C>
Cash flows from operating activities
Net income $ 772 $ 764
Adjustments to reconcile net income to net cash
provided from operating activities
Depreciation and amortization 199 95
Provision for loan losses 30 30
Net amortization and accretion of secutities 40 (39)
Deferred income taxes - -
Net gain on sale of investment securities - -
(Gain) loss on other real estate owned - -
Net change in accrued interest receivable (538) (540)
Net change in accrued interest payable and other 82 29
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Net cash provided by operating activities 585 339
Cash flows from investing activities
Proceeds from sale of investment securities: AFS - -
Proceeds from maturities of investment securities: AFS 303 2,675
Proceeds from maturities of investment securities: HTM 799 166
Purchase of investment securities: AFS (1,956) (1,028)
Purchase of investment securities: HTM (847) (222)
Net (increase) decrease in loans (3,092) 139
Proceeds from the sale of other real estate - -
Premises and equipment expenditures (758) (237)
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Net cash provided from (used in) investing activities (5,551) 1,493
Cash flows from financing activities
Net increase (decrease) in interest bearing and
non-interest bearing demand accounts 369 2,272
Net increase (decrease) in savings and time deposits (1,354) (1,274)
Cash dividends paid (183) (184)
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Net cash provided from (used in) financing activities (1,168) 814
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Net increase (decrease) in cash and equivalents (6,134) 2,646
Cash and equivalents at beginning of year 23,072 12,560
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Cash and equivalents at end of period $ 16,938 $ 15,206
============ ===========
Cash paid for:
Interest $ 1,373 $ 1,320
Income taxes - -
</TABLE>
6
<PAGE> 7
ITEM 2. MANAGEMENTS' DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
Financial Condition
Loan demand was strong during the first quarter of 1999. Net loans increased
$3,092,000 during the quarter. The largest demand was in the commercial loan
area. This increase was earlier than anticipated and is a reflection of the
strong growth in the local market place. Mortgage demand continued to increase,
but the relatively stable rates during the quarter resulted in less of a demand
to rewrite existing mortgages only for the rate advantage. Consumer loans
declined slightly due to a drop in demand that the Bank normally experiences
during the winter months.
Time and savings deposits dropped during the first quarter of the year. This
follows a pattern of cash flows that usually impacts the market in the first
quarter. Demand deposits grew during the quarter. Much of the growth takes place
in the final month of the quarter in anticipation of Federal income tax
payments.
The Bank paid a quarterly dividend of $.31 per share during the first quarter.
An additional investment in premises began during the first quarter as the Bank
began construction of a building in Imlay City, Michigan that will house a new
bank branch. The branch is scheduled to open in June of 1999. Imlay City is the
only other city in Lapeer County and is the second largest population area in
the county.
The Bank continues to seek investment opportunities to supplement income but
remain liquid enough to meet loan demand. The Bank used cash available at the
end of 1998 due to the sale of real estate mortgages to meet the loan demand and
purchase securities to increase income. 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 declined during the period as a result of the sale of real
estate mortgages during the last quarter of 1998. These mortgages were sold due
to their low interest rates and long maturities. Loan demand in the commercial
portfolio continued to be strong. Service charges on deposit accounts remained
consistent with the levels collected in the first quarter of 1998. Other income
categories also performed at the similar levels to the previous year. On
February 1, 1999, the Bank introduced a fee for foreign card holders at its
seven ATMs. Management is monitoring the results of this fee closely. Other
expense levels remained consistent with the previous years levels.
Risk Factors
Capital levels remain strong and well above regulatory requirements. Provision
for loan losses to average loans ratio is 1.54%, above most peer levels. The
non-performing loans to total loans ratio is 1.16%. The Corporation remains on
schedule in testing and preparing for the year 2000. 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
<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 three months ended
March 31, 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
/s/ Joseph H. Black
-----------------------------------
Joseph H. Black
Treasurer
9
<PAGE> 10
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 10,438
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 6,500
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 52,001
<INVESTMENTS-MARKET> 53,038
<LOANS> 123,249
<ALLOWANCE> 1,896
<TOTAL-ASSETS> 196,991
<DEPOSITS> 172,472
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,790
<LONG-TERM> 0
0
0
<COMMON> 2,966
<OTHER-SE> 19,763
<TOTAL-LIABILITIES-AND-EQUITY> 196,991
<INTEREST-LOAN> 2,515
<INTEREST-INVEST> 703
<INTEREST-OTHER> 121
<INTEREST-TOTAL> 3,339
<INTEREST-DEPOSIT> 1,291
<INTEREST-EXPENSE> 1,291
<INTEREST-INCOME-NET> 2,048
<LOAN-LOSSES> 30
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,559
<INCOME-PRETAX> 1,045
<INCOME-PRE-EXTRAORDINARY> 1,045
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 772
<EPS-PRIMARY> 1.30
<EPS-DILUTED> 1.30
<YIELD-ACTUAL> 7.63
<LOANS-NON> 1,426
<LOANS-PAST> 5
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,881
<CHARGE-OFFS> 18
<RECOVERIES> 2
<ALLOWANCE-CLOSE> 1,895
<ALLOWANCE-DOMESTIC> 349
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,546
</TABLE>
