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Previous: CHASE MORTGAGE FINANCE CORP, 8-K, EX-4, 2000-08-11 |
Next: COUNTY BANK CORP, 10-Q, EX-27, 2000-08-11 |
<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, 2000
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 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 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 June 30, 2000.
1
<PAGE> 2
County Bank Corp
Form 10-Q
For the Quarter ended June 30, 2000
<TABLE>
<CAPTION>
Part I: Financial Information Page
<S> <C>
Item 1. Financial Statements
Balance Sheets-
At June 30, 2000 and December 31, 1999 4
Statements of Income-
For the three months and six months ended June 30, 2000 and 1999 5
Statement of Cash Flows
For the six months ended June 30, 2000 and 1999 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and the Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk 9
Item 4. Submission of Matters to a Vote of Security Holders 10
Part II: Other Information
Item 6. Exhibits and Reports of Form 8-K 10
All items except those set forth above are inapplicable and have been omitted.
Signatures 11
</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, 1999.
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>
June 30 December 31
2000 1999
<S> <C> <C>
ASSETS
Cash and due from banks $ 10,849 $ 12,883
Investment securities available for sale 22,927 21,565
Investment securities held to maturity 28,480 28,189
--------- ---------
Total investment securities 51,407 49,754
Federal funds sold 4,550 4,900
Loans 139,852 134,651
Less: Reserve for possible loan losses 2,026 1,913
--------- ---------
Net loans 137,826 132,738
Bank premises and equipment 4,038 4,227
Interest receivable and other assets 3,047 2,895
--------- ---------
TOTAL ASSETS $ 211,717 $ 207,397
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing demand $ 34,522 $ 34,977
Interest bearing demand 58,999 54,318
Savings 40,556 41,164
Time 51,763 51,723
--------- ---------
Total deposits 185,840 182,182
Interest payable and other liabilities 1,244 1,390
--------- ---------
TOTAL LIABILITIES 187,084 183,572
STOCKHOLDERS' EQUITY
Common Stock-$5.00 par value, 3,000,000 shares
authorized and 1,186,472 shares outstanding 5,932 5,932
Surplus 8,634 8,634
Undivided profits 10,155 9,023
Unrealized gains and losses on securities available
for sale (88) 236
-------- ---------
TOTAL STOCKHOLDERS' EQUITY 24,633 23,825
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 211,717 $ 207,397
========= =========
</TABLE>
4
<PAGE> 5
CONSOLIDATED INCOME STATEMENTS
<TABLE>
<CAPTION>
(in thousands) Three months ended Six months ended
June 30 June 30
2000 1999 2000 1999
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 3,022 $ 2,624 $ 5,949 $ 5,139
Interest on investments 709 721 1,399 1,424
Interest on Federal funds sold 97 108 148 229
--------- --------- --------- ---------
TOTAL INTEREST INCOME 3,828 3,453 7,496 6,792
INTEREST EXPENSE
Demand deposits 601 385 1,128 745
Savings deposits 269 288 542 582
Time deposits 689 630 1,359 1,267
Borrowed funds - - 1 -
--------- --------- --------- ---------
TOTAL INTEREST EXPENSE 1,559 1,303 3,030 2,594
--------- --------- --------- ---------
NET INTEREST INCOME 2,269 2,150 4,466 4,198
Provision for possible loan losses 60 30 120 60
--------- --------- --------- ---------
NET INTEREST INCOME AFTER PROVISION
FOR POSSIBLE LOAN LOSSES 2,209 2,120 4,346 4,138
OTHER INCOME
Service fees on loan and deposit accounts 277 274 541 539
Other 289 385 593 706
--------- --------- --------- ---------
TOTAL OTHER INCOME 566 659 1,134 1,245
OTHER EXPENSES
Salaries and employee benefits 1,036 996 2,075 1,937
Net occupancy expense 231 238 472 481
Other 456 401 849 776
--------- --------- --------- ---------
TOTAL OTHER EXPENSE 1,723 1,635 3,396 3,194
INCOME BEFORE PROVISION FOR FEDERAL
INCOME TAX 1,052 1,144 2,084 2,189
Provision for Federal income tax 268 306 526 579
--------- --------- --------- ---------
NET INCOME $ 784 $ 838 $ 1,558 $ 1,610
========= ========= ========= =========
EARNINGS PER SHARE
Net income $ 0.66 $ 0.71 $ 1.31 $ 1.36
Cash dividend declared $ 0.18 $ 0.16 $ 0.36 $ 0.32
</TABLE>
5
<PAGE> 6
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
(in thousands) Six months ended
June 30
2000 1999
<S> <C> <C>
Cash flows from operating activities
Net income $ 1,558 $ 1,610
Adjustments to reconcile net income to net cash
provided from operating activities
Depreciation and amortization 234 255
Provision for loan losses 120 60
Net amortization and accretion of securities 95 (90)
Deferred income taxes - -
Net gain on sale of investment securities - -
(Gain) loss on other real estate owned (2) (56)
Net change in accrued interest receivable (182) (250)
Net change in accrued interest payable and other 52 170
-------- --------
Net cash provided by operating activities 1,875 1,699
Cash flows from investing activities
Proceeds from sale of investment securities: AFS 961 -
Proceeds from maturities of investment securities: AFS 3,204 3,900
Proceeds from maturities of investment securities: HTM 1,375 3,869
Purchase of investment securities: AFS (5,475) (4,902)
Purchase of investment securities: HTM (2,261) (4,512)
Net (increase) decrease in loans (5,251) (5,914)
Proceeds from the sale of other real estate 32 100
Premises and equipment expenditures (75) (1,103)
-------- --------
Net cash provided from (used in) investing activities (7,490) (8,562)
Cash flows from financing activities
Net increase (decrease) in interest bearing and
non-interest bearing demand accounts 4,226 2,052
Net increase (decrease) in savings and time deposits (568) 1,568
Cash dividends paid (427) (374)
-------- --------
Net cash provided from (used in) financing activities 3,231 3,246
-------- --------
Net increase (decrease) in cash and equivalents (2,384) (3,617)
Cash and equivalents at beginning of year 17,783 23,072
-------- --------
Cash and equivalents at end of period $ 15,399 $ 19,455
======== ========
Cash paid for:
Interest $ 3,025 $ 3,282
Income taxes $ 523 $ 552
</TABLE>
6
<PAGE> 7
NOTE 1. INVESTMENTS
(in thousands)
The carrying amount and approximate market value of securities held to maturity
were as follows
<TABLE>
<CAPTION>
June 30, 2000
Amortized Gross Gross Estimated
Cost Unrealized Unrealized Market
Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government securities and obligations of
U.S. Government corporations $ 1,000 $ - $ 73 $ 927
Obligations of states and political subdivisions 21,757 113 462 21,408
Mortgage-backed securities 5,723 7 136 5,594
---------- --------- --------- ----------
Total $ 28,480 $ 120 $ 671 $ 27,929
========== ========= ========= ==========
</TABLE>
The carrying amount and approximate market value of securities held to maturity
were as follows
<TABLE>
<CAPTION>
December 31,1999
Amortized Gross Gross Estimated
Cost Unrealized Unrealized Market
Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government securities and obligations of
U.S. Government corporations $ 1,000 $ - $ 34 $ 966
Obligations of states and political subdivisions 20,549 174 421 20,302
Mortgage-backed securities 6,640 29 108 6,561
---------- --------- -------- ---------
Total $ 28,189 $ 203 $ 563 $ 27,829
========== ========= ======== =========
</TABLE>
The carrying amount and approximate market value of securities available for
sale were as follows
<TABLE>
<CAPTION>
June 30, 2000
Amortized Gross Gross Estimated
Cost Unrealized Unrealized Market
Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government securities and obligations of
U.S. Government corporations $ 14,973 $ - $ 713 $ 14,260
Obligations of states and political subdivisions 655 8 663
Corporate securities 546 683 - 1,229
Mortgage-backed securities 6,887 6 118 6,775
---------- --------- --------- ---------
Total $ 23,061 $ 697 $ 831 $ 22,927
========== ========= ========= =========
</TABLE>
The carrying amount and approximate market value of securities available for
sale were as follows
<TABLE>
<CAPTION>
December 31,1999
Amortized Gross Gross Estimated
Cost Unrealized Unrealized Market
Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government securities and obligations of
U.S. Government corporations $ 11,980 $ - $ 433 $ 11,547
Obligations of states and political subdivisions 1,040 11 1,051
Corporate securities 426 864 1,290
Mortgage-backed securities 7,762 1 86 7,677
---------- --------- --------- ----------
Total $ 21,208 $ 876 $ 519 $ 21,565
========== ========= ========= ==========
</TABLE>
7
<PAGE> 8
<TABLE>
<CAPTION>
NOTE 2. LOANS
(in thousands) 6/30/00 12/31/99
<S> <C> <C>
Commercial $ 64,448 $ 64,547
Real estate mortgage 31,738 31,502
Installment 27,075 27,625
Construction 16,592 10,977
----------- -----------
$ 139,853 $ 134,651
=========== ===========
</TABLE>
Transactions in the reserve for possible loan losses were as follows for the six
months ended June 30:
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
Beginning balance at beginning of period $ 1,913 $ 1,881
Provision charged to earnings 120 60
Loans charged off 50 30
Recoveries 43 11
---------- ----------
Balance at end of the period $ 2,026 $ 1,922
========== ==========
Reserve as a percent of total loans 1.45% 1.52%
Loans outstanding to executive officers, directors, principal $ 2,795 $ 2,539
shareholders and their related companies. In the opinion of
management, such loans were made on the same terms and
conditions as those to other borrowers and did not involve
more that the normal risk of collectability
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
Financial Condition
Loan demand remained strong through the second quarter of 2000. Net loans
increased $5,251,000 since December 31, 1999. 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 activity
declined as a result of increasing interest rates. Consumer loans also declined
during the quarter.
Time and savings deposits dropped during the first half of the year. This
follows a pattern of cash flows that usually impacts the market in the early
months of the year. Demand deposits grew during the first two quarters. Interest
bearing demand increased 8.6% which offset a slight decrease of .01% in
noninterest bearing demand. New commercial customers with large deposit balances
contributed to the growth in non interest demand. Increased use on the Choice
product's indexed interest rate feature contributed to the growth in interest
bearing demand accounts.
The Bank paid a quarterly dividend of $.18 per share during the first quarter
and $.18 per share during the second quarter. Increases in deposit accounts and
maturities in the investment portfolio met demands for new loans. The Bank sold
securities in the available for sale portfolio when an opportunity to liquidate
low yielding municipal bonds with no loss arose. The money is invested in
Federal funds to meet loan commitments and respond to loan applications that
have not been funded. The Bank continues to seek investment opportunities to
supplement income but remain liquid enough to meet loan demand.
8
<PAGE> 9
Results of Operations
Increasing rates put pressure on the Bank's interest margin. The Bank is closely
matched, but deposits reprice in advance and in anticipation of Federal Reserve
Board action that influences market interest rates and consequently provides
higher loan yields. Other income categories performed at the similar levels to
the previous year. Other expenses increased in response to the opening of a new
branch in Imlay City, Michigan in August of 1999. The branch is growing faster
than any office previously opened by the Bank.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Rate sensitivity analysis (000's), June 30, 2000
<TABLE>
<CAPTION>
Repricing period in days 0-30 31-90 91-180 181-365 0-365 0ver 365
<S> <C> <C> <C> <C> <C> <C>
Rate sensitive assets (RSA):
Federal fund sold $ 4,550 $ - $ - $ - $ 4,550 $ -
Investment securities 10,043 45 1,752 2,601 14,441 36,967
Loans 35,892 3,935 5,955 6,956 52,738 87,114
---------- --------- -------- -------- --------- --------
Total rate sensitive assets 50,485 3,980 7,707 9,557 71,729 124,081
Rate sensitive liabilities (RSL):
Demand deposits 36,876 - 36,876 56,647
Savings deposits 19,800 - 19,800 20,756
Time deposits 6,721 6,587 7,845 8,406 29,559 22,204
----------- --------- -------- -------- ---------- ---------
Total rate sensitive liabilities 63,397 6,587 7,845 8,406 86,235 99,607
Repricing gap (RSA-RSL) $ (12,912) $ (2,607) $ (138) $ 1,151 $ (14,506) $ 24,474
=========== ========= ======== ======== ========== =========
As a percent of capital -52.4% -10.6% -0.6% 4.7% -58.9% 99.4%
As a percent of total assets -6.1% -1.2% -0.1% 0.5% -6.9% 11.6%
</TABLE>
The previous table is a static gap analysis of the differences in repricing
opportunities between rate sensitive assets and rate sensitive liabilities. An
immediate 100 basis point change in rates to both assets and liabilities would
result in an approximate difference in net interest income of $148,000 which
would result in an after tax change to net interest income, assuming a 34% tax
rate, of $97,000. An increase in rates would result in a reduction of income; a
decrease in rates results in an increase in income.
Investment Portfolio Rate Shock Analysis, June 30, 2000
(in thousands)
The difference between market values and current book values assuming the
following basis point changes in rates
<TABLE>
<CAPTION>
-300 -200 -100 Even +100 +200 +300
<S> <C> <C> <C> <C> <C> <C> <C>
U.S. Gov. and U.S. Gov. Corporations'
securities $ 222 $ 98 $ (166) $ (641) $ (1,139) $ (1,686) $ (2,242)
Obligations of states and political
subdivisions 2,779 1,660 641 (340) (1,538) (2,622) (3,553)
Mortgage-backed securities 164 43 (83) (207) (364) (533) (698)
-------- -------- ------- --------- --------- --------- ---------
Total $ 3,165 $ 1,801 $ 392 $ (1,188) $ (3,041) $ (4,841) $ (6,493)
======== ======== ======= ========= ========= ========= =========
As a percent of capital 12.8% 7.3% 1.6% -4.8% -12.3% -19.7% -26.4%
</TABLE>
The previous table represents approximate changes to the value of readily
marketable securities and is based upon estimates of values from an independent
source. The values are believed to be reliable, but not guaranteed.
9
<PAGE> 10
Item 4. Submission of Matters to a Vote of Security Holders.
At the Corporation's annual meeting on April 21, 2000, a change to the bylaws to
increase the authorized number of shares of the Corporation from 1,200,000 to
3,000,000 was submitted to shareholders for a vote. The change to the bylaws was
adopted. Shareholders cast 996,707 votes for, 22,104 against, 4,708 shares
abstained and 192,953 shares did not vote.
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 June
30, 2000.
10
<PAGE> 11
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
JOSEPH H. BLACK
----------------
Joseph H. Black
Treasurer
Date: August 11, 2000
11
<PAGE> 12
Exhibit Index
-------------
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
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