<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Mark one
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE CT
OF 1934
For the quarterly period ended September 30, 1997
-------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
For the transition period from ___________ to ___________
Commission File Number: 33-23062
Eufaula BancCorp, Inc.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 63-0989868
- ------------------------------- -----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
Post Office Box 1269, Eufaula, Alabama 36072
-----------------------------------------------
Address of principal executive offices
(334) 687-3581
--------------
(Issuer's Telephone Number)
N/A
----------------------------------------------
(Former name, former address and former fiscal
year, if changed since last report)
Check whether the issuer (1) filed all reports required to filed by Section 13
or 15 (d) of the Exchange Act during the past 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
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of common equity, as of September 30, 1997 ------ 1,398,615
-------------------------------------
<PAGE>
EUFAULA BANCCORP, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Part I. Page No.
<S> <C> <C>
Item 1. Financial Information
Consolidated Balance Sheet--September 30, 1997 & 3
September 30, 1996
Consolidated Statements of Income three months ending 4
September 30, 1997 and 1996
Consolidated Statements of Income-Nine months 4a
ended September 30, 1997 and 1996
Consolidated Statements of Cash Flows; 5
Nine Months ended September 30, 1997 and 1996
Note to Consolidated Financial Statements 6
Item 2. Management's discussion and analysis of financial
condition and results of operations, 9 months ending 9-30-97 7 & 8
Management's discussion and analysis of financial condition
and results of operations, 3 months ending 9--30-97. 8a
Part II. Other Information
Item 4. Any matter submitted to the security holders for a vote 10
Item 6. Exhibits and reports on Form 8-K 10-12
</TABLE>
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<PAGE>
Item 1 - Part 1 - Financial Information
EUFAULA BANCCORP, INC. & SUBSIDIARIES
Consolidated Balance Sheet
September 30, 1997 & September 30, 1996
(unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
ASSETS
- ------
1997 1996
---- ----
<S> <C> <C>
Cash & Due from Banks $ 4,080 5,116
Interest bearing deposits in banks 500 250
Investment Securities:
Held to maturity 9,327 9,928
Available for Sale at est. market value 18,164 27,076
Federal Funds Sold 775 900
Loans 73,862 50,895
Less Allowance for loan losses 725 657
-------- --------
73,137 50,238
Premises & Equipment, Net 3,381 2,332
Intangible Assets 805 1,568
Other Assets 3,859 3,167
-------- --------
TOTAL ASSETS $114,028 100,575
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
- ----------------------------------
Deposits:
Non interest-bearing demand $ 17,502 18,506
Interest-bearing Demand 28,477 26,551
Savings 4,809 5,374
Time Deposits 44,983 37,116
-------- --------
TOTAL DEPOSITS $ 95,771 87,547
Federal Funds Purchased 2,650 1,910
Other Borrowings 2,500 0
Other Liabilities 1,361 947
-------- --------
TOTAL LIABILITIES $102,282 90,404
-------- --------
STOCKHOLDERS' EQUITY
Common Stock, par value $1 5,000,000
shares authorized: 1,398,615 shares issued 1,399 677
Surplus 588 909
Retained Earnings 9,773 8,920
unrealized gain (loss) on investments (14) (335)
-------- --------
Total Equity $ 11,746 10,171
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $114,028 100,575
======== ========
</TABLE>
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<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended September 30, l997 and September 30, l996
(unaudited)
(Dollars in Thousands, except per share amounts)
<TABLE>
<CAPTION>
Interest Income 1997 1996
<S> <C> <C>
Interest & fees on loans $ 1,763 $ 1,295
Interest on Federal Funds Sold 25 17
Interest on interest-bearing deposits (257) 3
Interest on taxable securities 590 467
Interest on not-taxable securities 115 120
------ ------
$ 2,236 $ 1,902
Interest Expense
Interests on deposits $ 916 $ 731
Interest on Federal Funds Purchased/
Other Borrowed Funds 79 17
Net interest income $ 1,241 $ 1,154
Provision for loan losses 49 23
------ ------
Net interest income after
provision for loan losses $ 1,192 $ 1,131
Other Operating Income
Service Charges on deposit accounts 201 187
Security Gains 16 8
Other Income 108 61
------ ------
325 256
Other operating expenses
Salaries & Other Employee Benefits $ 606 $ 488
Occupancy & Equipment expenses 158 127
Other operating expense 339 283
------ ------
$ 1,103 $ 898
Income before taxes $ 414 $ 489
Applicable Income Taxes 122 174
Net Income after Taxes $ 292 $ 315
====== ======
Per share of common stock based on
average number of shares outstanding
during period
Net Income .21 .23
Average shares outstanding 1,398,615 1,353,204
Cash dividends per share of common stock .0525 .05
</TABLE>
The accompanying note is an integral part of these consolidated financial
statements.
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<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended September 30, l997 and September 30, l996
(unaudited)
(Dollars in Thousands, except per share amounts)
<TABLE>
<CAPTION>
Interest Income 1997 1996
<S> <C> <C>
Interest & fees on loans $ 4706 $ 3781
Interest on Federal Funds Sold 61 87
Interest on interest-bearing deposits 35 10
Interest on taxable securities 1183 1332
Interest on not-taxable securities 354 356
---------- ----------
$ 6339 $ 5566
Interest Expense
Interests on deposits $ 2540 $ 2188
Interest on Federal Funds Purchased/
Other Borrowed Funds 177 21
Net interest income $ 3622 $ 3357
Provision for loan losses 126 68
---------- ----------
Net interest income after
provision for loan losses $ 3496 $ 3289
Other Operating Income
Service Charges on deposit accounts 585 526
Security Gains 21 23
Other Income 302 216
---------- ----------
908 765
Other operating expenses
Salaries & Other Employee Benefits $ 1769 $ 1492
Occupancy & Equipment expenses 451 375
Other operating expense 1062 885
---------- ----------
$ 3282 $ 2752
Income before taxes $ 1122 $ 1302
Applicable Income Taxes 353 441
Net Income after Taxes $ 769 $ 861
========== ==========
Per share of common stock based on
average number of shares outstanding
during period
Net Income .55 .64
Average shares outstanding 1,398,615 1,353,204
Cash dividends per share of common stock .1575 .15
</TABLE>
The accompanying note is an integral part of these consolidated financial
statements.
- 4a -
<PAGE>
EUFAULA BANCCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
Nine Months Ended September 30, 1997 and September 30, l996
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net Income $ 769 $ 861
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities:
Depreciation & amortization 169 123
Provision for loan losses 126 68
Securities gains (36) (23)
(Increase) decrease
in interest receivable 127 (102)
Increase in interest payable 100 39
Other prepaids, deferrals and
accruals, net 915 (2,186)
-------- -------
Net cash provided by
operating activities $ 2,170 $(1,220)
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales &
maturities of investment securities $ 11,620 $ 4,937
Purchase of investment securities (2,000) (7,961)
Net decrease in Federal Funds sold 600 (100)
Net (increase) decrease in
bank-owned deposits 250 -0-
Net increase in loans (21,751) (2,456)
Purchase of property & equipment (1,137) (388)
-------- -------
Net cash provided by
investing activities $(12,418) $(5,968)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits $ 5,474 $ 3,933
Net increase (decrease) in
Fed Funds purchased 1,450 1,360
Net increase in other borrowings -0- -0-
Proceeds from exercise of
stock options 301 -0-
Dividends paid (218) (204)
-------- -------
Net cash used in
financing activities $ 7,007 $ 5,089
Net increase (decrease) in
cash and due from banks (3,241) (2,099)
Cash & due from banks,
beginning of period 7,321 7,215
-------- -------
Cash & due from banks, end
of period $ 4,080 $ 5,116
======== =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during period for:
Interest $ 2,717 $ 2,209
</TABLE>
The accompanying note is an integral part of these consolidated
financial statements.
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<PAGE>
EUFAULA BANCCORP, INC. AND SUBSIDIARIES
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
The financial information included here is unaudited; however,
such information reflects all adjustments (consisting solely of
normal recurring adjustments) which are, in the opinion of
management, necessary for a fair statement of results for the
interim periods.
All material intercompany balances and transactions have been
eliminated.
The results of operations for the nine month period ended
September 30, l997, are not necessarily indicative of the
results to be expected for the full year .
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<PAGE>
EUFAULA BANCCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and operating
results during the periods included in the accompanying consolidated financial
statements.
FINANCIAL CONDITION
- -------------------
As of September 30, 1997, the Company experienced an increase of 13.37% in
total assets as compared to September 30, 1996. This increase is a result of a
45% increase in loans and a 8.6% increase in deposits.
LIQUIDITY
- ---------
As of September 30, 1997, the liquidity ratio was above 30%. Liquidity is
measured by the ratio of net cash, short-term and marketable securities to net
deposits and short-term liabilities. Management believes that this ratio is
more than adequate to meet the liquidity needs of the Company.
CAPITAL
- -------
Both the leverage capital ratio and the risk-based capital ratio are well above
the minimum requirements.
NEW ACCOUNTING STANDARD
- -----------------------
As of January 1, 1996, the Company adopted Statement of Financial Accounting
Standard #123 ("SFAS123"). As permitted by SFAS123, the Company will continue to
account for compensation cost for stock-based employer compensation awards in
accordance with APB opinion #25, "Accounting for Stock Issued to Employees". The
adoption of SFAS123 had no effect on the Company's financial statements. Since
no options were granted in 1996, no additional disclosures were required in the
financial statements.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
Net interest income for nine months ended September 30, 1997 amounted to
$3,622,000, representing an increase of $265,000 or 7.89% from net interest
income of $3,357,000 for the nine months ended September 30, 1996. Non-interest
income for the nine months ended September 30, 1997 amounted to $908,000 as
compared to $765,000 for the nine months ended September 30, 1996, representing
an increase of $143,000 or 18.69%. Service charges on deposit accounts
increased $59,000 or 11.22% to $585,000 for the nine months ended September 30,
1997 as compared to $526,000 for the nine months ended September 30, 1996. This
increase in service charges was attributable to an increase in deposits of
approximately $8,000,000 to $95,771,000 at September 30, 1997 as compared to
$87,547,000 at September 30, 1996. All other non-interest income increased
$84,000 or 35.15% to $323,000 for the nine months ended September 30, 1997 as
compared to $239,000 for the nine months ended September 30, 1996.
Non-interest expense for the nine months ended September 30, 1997 amounted
$3,282,000, representing an increase of $530,000 or 19.26% from non-interest
expense of $2,752,000 for the nine months ended September 30, 1996. Salaries
and benefits increased $277,000 or 18.57% to $1,769,000 for the nine months
ended September 30, 1997 as compared to $1,492,000 for the nine months ended
September 30, 1996. Approximately $50,000 of the increase in salaries and
benefits is attributable to the establishment of a loan production office in
Montgomery, Alabama in January of 1997. Occupancy and equipment expense
increased $76,000 to $451,000 for nine months ended September 30, 1997 as
compared to $375,000. The increase in occupancy and equipment expense is
attributable to the opening of a new branch bank in Florida and the renovation
of the Eufaula Bank. Other non-interest expense increased $177,000 to
$1,062,000 for the nine months ended September 30, 1997 as compared to $885,000
for the nine months ended September 30, 1996. Directors fees increased $50,000,
auditing and accounting expense increased $45,000 and consulting fees increased
$13,000.
Because of the significant increase in non-interest expense, net income
decreased $92,000 to $769,000 for the nine months ended September 30, 1997 as
compared to $861,000 for the nine months ended September 30, 1996.
Total cash and due from banks amounted to $4,080,000 at September 30, 1997
as compared to $5,116,000 at September 30, 1996, representing a decrease of
$1,036,000. Securities and temporary investments decreased $9,638,000 to
$28,226,000 at September 30, 1997 as compared to $37,904,000 at September 30,
1996. Loans net of allowance for loan losses increased $22,899,000 to
$73,137,000 at September 30, 1997 as compared $50,238,000 at September 30, 1996.
The increase in loans was funded primarily by the decrease in securities and
temporary investments, an increase of $8,224,000 in deposits and an increase of
$5,150,000 in short-term borrowing. Total equity increased $1,575,000 to
$11,746,00 at September 30, 1997 as compared to $10,171,000 at September 30,
1996. Total assets increased $13,453,000 to $114,028,000 at September 30,1997
as compared to $100,575,000 at September 30, 1996.
- 8 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
THREE MONTHS BEGINNING 9-30-97 AND 9-30-96
Net interest income for the three months ended 9-30-97, increased from
$1,154,000 to $l,241,000 or a total of $87,000 as compared with the three months
ended 9-30-96. Non interest income for the same period increased from $256,000
to $325,000 or a total of $69,000 (26.95%) as compared with the three months
ended 9-30-96. Service charge income increased $14,000 for the three months
ended 9-30-97 as compared with the three months ended 9-30-96, due to an
increase in total deposits. All other non-interest income increased from $69,000
to $124,000.
Total non-interest expense for the three months ended 9-30-97 increased $205,000
as compared with the three months ended 9-30-96. Salaries and benefits were up
$118,000; occupancy expense was up $31,000 and other operating expense was up
$56,000. These increases were due to expansion efforts in the LPO office (that
office became a branch office of Eufaula Bank & Trust Company in October, 1997),
and branching efforts of First American Bank of Walton County, FL.
Due to increased expansion costs, net income for the three months ended 9-30-97
was down $23,000 or 7.3% as compared with the three months ended 9-30-96.
8a
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DATE: 11-7-97 EUFAULA BANCCORP, INC.
--------------------
BY: /s/ Greg Faison
-----------------------
Greg Faison, President
BY: /s/ Gloria A. Hagler
-----------------------
Gloria A. Hagler, Secretary/Treasurer
- 9 -
<PAGE>
PART II - OTHER INFORMATION
Item 4. Any matter submitted to the security holders for a vote.
The following items were brought before the Eufaula BancCorp, Inc.
Shareholders at their last meeting held on April 8, 1997, and at a
special called meeting held on December 10,1996, for a vote and were
unanimously approved:
1. Election of the following directors:
For a one year term:
Greg B. Faison
Kenneth R. McCartha
For a two year term:
Michael C. Dixon
Robert M. Dixon
James J. Jaxon, Jr.
For a three year term:
Janis R. Biggers
Thomas Harris
Frank McRight
2. Authorization of Greg Faison to vote the shares held in Eufaula Bank &
Trust Company and First American Bank by Eufaula BancCorp, Inc., at their
annual Shareholders' meeting.
3. Approval of Mauldin & Jenkins, CPA's as accountants for Eufaula BancCorp,
Inc.
4. Approval of two-for-one stock split to shareholders of record on December
13, 1996, and payable on December 20, 1996.
5. Approval to amend the Corporation's Certificate of Incorporation increasing
the number of shares of authorized common stock from 2,000,000 shares,
$1.00 par value, to 5,000,000 shares, $1.00 par value.
6. Approved members of the Board of Directors of the Corporation eligibility
to be granted stock options pursuant to the terms of Stock Option Plan of
1994.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Loan Composition Summary
Loans over 90 days past due and on accrual loans
Allowance for Loan Losses analysis
(b) Report on Form 8-K.
NONE
- 10 -
<PAGE>
3a The composition of loans is summarized as follows:
<TABLE>
<CAPTION>
September 30
1997 1996
<S> <C> <C>
Commercial, Financial,
Agricultural $ 19,546 $ 10.780
Real Estate-Construction 3,194 2,456
Real Est.-Mortgage 37,211 25,975
Consumer 14,019 11,823
Other 102 54
TOTAL $ 74,072 $ 51,088
Unearned discount (210) (193)
Allowance for loan losses (725) (657)
NET LOANS $ 73,137 $ 50,238
</TABLE>
3c-1 The following is a schedule of nonaccrual loans and loans past due 90
days and over:
<TABLE>
<CAPTION>
September 30
1997 1996
Past due 90 nonaccrual Past due 90 nonaccrual
days or more days or more
<S> <C> <C> <C> <C>
Real Estate Loans 2 0 0 0
Installment Loans 13 1 12 3
</TABLE>
3c-2 Nonaccrual loans were not material to the total amount of loans
outstanding.
11
<PAGE>
4a Changes in the allowance for loan losses for 9-30-97 and 9-30-96 were
as follows:
1997 1996
Balance, beginning of year 655 605
Provision charged to operations 126 68
Loans charged off (66) (29)
Recoveries 10 13
Balance, 9-30 725 657
<TABLE>
<CAPTION>
1997 1996
Charge Offs Recoveries Charge Offs Recoveries
<S> <C> <C> <C> <C>
Installment Loans 34 10 23 3
Cedit Cards & Related Plans 3 1
Commercial & All Other Loans 29 6 9
Totals 66 10 29 13
</TABLE>
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 4,080
<INT-BEARING-DEPOSITS> 500
<FED-FUNDS-SOLD> 775
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 9,327
<INVESTMENTS-CARRYING> 18,164
<INVESTMENTS-MARKET> 0
<LOANS> 73,862
<ALLOWANCE> 725
<TOTAL-ASSETS> 114,028
<DEPOSITS> 95,771
<SHORT-TERM> 5,150
<LIABILITIES-OTHER> 1,361
<LONG-TERM> 0
0
0
<COMMON> 1,399
<OTHER-SE> 10,361
<TOTAL-LIABILITIES-AND-EQUITY> 114,028
<INTEREST-LOAN> 4,706
<INTEREST-INVEST> 1,537
<INTEREST-OTHER> 96
<INTEREST-TOTAL> 6,339
<INTEREST-DEPOSIT> 2,540
<INTEREST-EXPENSE> 177
<INTEREST-INCOME-NET> 3,622
<LOAN-LOSSES> 126
<SECURITIES-GAINS> 21
<EXPENSE-OTHER> 3,282
<INCOME-PRETAX> 1,122
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 769
<EPS-PRIMARY> .55
<EPS-DILUTED> .55
<YIELD-ACTUAL> 8.49
<LOANS-NON> 0
<LOANS-PAST> 15
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 452
<ALLOWANCE-OPEN> 559
<CHARGE-OFFS> 66
<RECOVERIES> 10
<ALLOWANCE-CLOSE> 725
<ALLOWANCE-DOMESTIC> 725
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
