<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended:
September 30, 2000
Commission file number: 0-29422
Eufaula BancCorp, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 63-0989868
(State of Incorporation) (I.R.S. Employer Identification No.)
224 East Broad Street
Eufaula, Alabama 36027
(Address of principal executive offices) (Zip Code)
(334) 687-3581
(Registrant's telephone number, including area code)
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 periods 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
------- -------
The number of shares outstanding of registrant's common stock, par value $1.00
per share, at September 30, 2000 was 2,625,273.
================================================================================
<PAGE>
EUFAULA BANCCORP, INC.
FORM 10-QSB
September 30, 2000
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I. Financial Information:
Item 1. Consolidated Statements of Condition,
September 30, 2000 and December 31, 1999. 3
Consolidated Statements of Income for the
Three and Nine months ended September 30, 4
2000 and 1999.
Consolidated Statements of Cash Flow for the
Nine months ended September 30, 2000 and 5
1999.
Notes to Consolidated Financial Statements. 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations. 7-11
PART II. Other Information
Item 1. Legal Proceedings 12
Item 2. Change in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security
Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
</TABLE>
2
<PAGE>
Part I. EUFAULA BANCCORP, INC.
Item 1 CONSOLIDATED STATEMENTS OF CONDITION
(Unaudited)
<TABLE>
<S> <C> <C>
September 30, December 31,
2000 1999
------------- ------------
(In thousands, except per share data)
ASSETS
Cash and Due From Banks............................................... $ 7,925 $ 10,301
-------- --------
Short-Term Investments:
Federal Funds Sold and Securities Purchased
Under Agreement to Resell......................................... 0 400
Other Short-Term Investments........................................ 0 47
-------- --------
Total Short-Term Investments.......................................... 0 447
Securities Available-for-Sale......................................... 22,030 22,716
-------- --------
Investment Securities................................................. 20,569 11,084
-------- --------
Total Loans........................................................... 171,963 205,945
Allowance for Loan Losses........................................... (2,249) (2,556)
-------- --------
Net Loans........................................................... 169,714 203,389
-------- --------
Premises and Equipment................................................ 6,011 6,530
-------- --------
Goodwill.............................................................. 1,253 1,312
-------- --------
Other Real Estate..................................................... 30 141
-------- --------
Other Assets.......................................................... 4,564 4,902
-------- --------
Total Assets....................................................... $232,096 $260,822
======== ========
LIABILITIES
Deposits:
Demand.............................................................. $ 26,014 $ 25,351
Savings and Interest-Bearing Demand................................. 54,168 65,758
Time................................................................ 117,594 135,076
-------- --------
Total Deposits..................................................... 197,776 226,185
Federal Funds Purchased and Securities Sold Under
Agreements to Repurchase............................................ 5,614 11,617
Notes Payable......................................................... 3,500 1,000
Other Liabilities..................................................... 2,634 2,551
-------- --------
Total Liabilities.................................................. $209,524 $241,353
-------- --------
CAPITAL ACCOUNTS
Preferred Stock (Par value of $.10; 50 shares authorized;
none outstanding)................................................... $ 0 $ 0
Common Stock (Par value of $1.00; 5,000 shares authorized; 2,625 and
2,625 shares outstanding in 2000 and 1999, respectively)............. 2,625 2,625
Surplus............................................................... 6,059 6,059
Undivided Profits..................................................... 14,033 11,431
Accumulated Other Comprehensive Loss.................................. (145) (646)
-------- --------
Total Capital Accounts............................................. 22,572 19,469
-------- --------
Total Liabilities and Capital Accounts............................. $232,096 $260,822
======== ========
</TABLE>
3
<PAGE>
EUFAULA BANCCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, 2000 September 30, 2000
-------------------- -------------------
(In thousands, except per share data) 2000 1999 2000 1999
------ ------ ------ -------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and Fees on Loans......................... $4,701 $4,500 $14,873 $12,716
Interest on Securities:
Taxable Securities............................... 478 320 1,420 971
Nontaxable Securities............................ 254 100 675 295
Interest on Federal Funds Sold and
Securities Purchased Under
Agreements to Resell............................. 1 191 19 268
Interest on Deposits in Banks...................... 0 0 0 0
------ ------ ------- -------
TOTAL INTEREST INCOME.......................... 5,434 5,111 16,987 14,250
------ ------ ------- -------
INTEREST EXPENSE
Interest on Deposits............................... 2,617 2,267 7,925 6,289
Interest on Federal Funds Purchased
and Securities Sold Under Agreements to
Repurchase....................................... 301 257 749 380
Interest on Notes Payable.......................... 30 30 82 90
------ ------ ------- -------
TOTAL INTEREST EXPENSE......................... 2,948 2,554 8,756 6,759
------ ------ ------- -------
NET INTEREST INCOME............................ 2,486 2,557 8,231 7,491
Provision for Loan Losses.......................... 188 329 696 1,004
------ ------ ------- -------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES...................... 2,298 2,228 7,535 6,487
------ ------ ------- -------
OTHER INCOME
Service Charges on Deposit Accounts................ 287 229 803 712
Security Gains..................................... (371) (5) (387) (5)
Gain on sale of branches........................... 2,514 0 2,514 0
Other Operating Income............................. 242 465 637 906
------ ------ ------- -------
TOTAL OTHER INCOME............................. 2,672 689 3,567 1,613
------ ------ ------- -------
OTHER EXPENSE
Salaries........................................... 859 824 2,707 2,472
Employee Benefits.................................. 329 327 974 992
Net Occupancy Expense.............................. 95 124 423 380
Equipment Expense.................................. 150 130 429 411
Data Processing Expense............................ 187 78 422 237
Other Operating Expenses........................... 567 625 1,721 1,787
------ ------ ------- -------
TOTAL OTHER EXPENSE............................ 2,187 2,108 6,676 6,279
------ ------ ------- -------
INCOME BEFORE INCOME TAXES......................... 2,783 809 4,426 1,821
INCOME TAX EXPENSE................................. 1,024 301 1,469 638
------ ------ ------- -------
NET INCOME..................................... $1,759 $ 508 $ 2,957 $ 1,183
====== ====== ======= =======
EARNINGS PER SHARE:
BASIC.......................................... $ 0.67 $ 0.19 $ 1.13 $ 0.45
====== ====== ======= =======
DILUTED........................................ $ 0.63 $ 0.18 $ 1.06 $ 0.43
====== ====== ======= =======
AVERAGE SHARES ISSUED AND
OUTSTANDING....................................... 2,625 2,621 2,625 2,621
FULLY DILUTED SHARES ISSUED AND
OUTSTANDING....................................... 2,743 2,751 2,743 2,751
</TABLE>
4
<PAGE>
EUFAULA BANCCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
------------------------------
2000 1999
-------- ---------
<S> <C> <C>
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 2,957 $ 1,183
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 397 417
Amortization of Goodwill 59 59
Provision for Possible Loan Losses 696 1,004
Loss on Sales of Securities 387 5
Gain on Sale of Branches (2,514) 0
(Increase) Decrease in Other Assets (670) 315
Increase in Other Liabilities 420 848
-------- ---------
Net Cash Provided by Operating Activities 1,732 3,831
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturities of Investment Securities 331 335
Proceeds from Maturities of Securities Available-for-Sale 494 1,000
Proceeds from Sales of Securities Available-for-Sale 6,781 1,967
Purchase of Investment Securities (9,816) (325)
Purchase of Available-for-Sale Securities (6,217) (3,055)
Decrease in Federal Funds, Net 400 3,645
Decrease in Other Short-Term Investments 47 0
Increase in Loans (35,287) (53,838)
Net Cash Received from Sale of Branches 17,836 0
Capital Additions (426) (467)
-------- ---------
Net Cash Used in Investing Activities (25,857) (50,738)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in Deposits 25,607 51,071
Net Borrowings/(Repayments) on Notes Payable 2,500 (1,100)
Decrease in Federal funds purchased (6,003) 0
Exercise of Stock Options 0 40
Dividends Paid (355) (334)
-------- ---------
Net Cash Provided by Financing Activities 21,749 49,677
-------- ---------
Net Increase (Decrease) in Cash and Cash Equivalents (2,376) 2,770
Cash and Cash Equivalents, Beginning 10,301 7,820
-------- ---------
Cash and Cash Equivalents, Ending $ 7,925 $ 10,590
======== =========
</TABLE>
5
<PAGE>
EUFAULA BANCCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Principles of Consolidation:
The consolidated financial statements of Eufaula BancCorp, Inc. ("EBC")
include the accounts of the parent company and its wholly-owned subsidiaries
Southern Bank of Commerce, Eufaula, Alabama and First American Bank, Walton
County, Florida. All material inter-company transactions have been eliminated.
The consolidated statements of condition as of September 30, 2000 and the
related consolidated statements of income for the nine month period ended
September 30, 2000 and 1999 and the consolidated statements of cash flows for
the nine month period ended September 30, 2000 and 1999 are unaudited; in the
opinion of management, all adjustments necessary for a fair presentation of the
financial statements are included.
2. Results of Operations
The results for the nine month period ended September 30, 2000 are not
necessarily indicative of the results for the entire year of 2000. This report
should be read in conjunction with EBC's 1999 Annual Report to Shareholders for
a complete understanding of EBC's accounting policies and their effect on the
financial statements as a whole.
3. Capital Accounts
Basic EPS was computed by dividing net income by the weighted average
shares of common stock outstanding of 2,625,000 for 2000 and 2,621,000 for 1999.
Diluted EPS was computed by dividing net income by the sum of the weighted
average shares of common stock outstanding and the effect of stock options
outstanding. The effect of the stock options was to increase the weighted
average number of shares by 118,000 in 2000 and 130,000 in 1999.
4. Comprehensive Income (Loss)
In January, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income", which establishes standards for reporting comprehensive
income and its components. Comprehensive income is defined as all changes in
the equity of a business enterprise from transactions and other events and
circumstances, except those resulting from investments by owners and
distributions to owners. The Company's comprehensive income, which includes net
income and the change in unrealized gain (loss) on securities available for
sale, net of tax, was $2,116 thousand and $368 thousand for the three months
ended September 30, 2000 and 1999, respectively, and $3,458 thousand and $716
thousand for the nine months ended September 30, 2000 and 1999, respectively.
5. Supplementary Data for Cash Flows
Interest paid on notes payable during the nine months ended September 30,
2000 and 1999 amounted to $82 thousand and $90, respectively.
6. Branch Sale
On August 4, 2000, Southern Bank of Commerce, a subsidiary of Eufaula
BancCorp, completed the sale of its Huntsville and Madison, Alabama Branch
locations to First American Bank of Decatur, Alabama, a subsidiary of Alabama
National BanCorporation, Birmingham, Alabama. The Huntsville and Madison
locations had total assets of approximately $66 million and $5.7 million,
respectively, as of the closing date. Included in the $2.957 million of net
income for the nine months ended September 30, 2000 was a gain on sale of these
branches, net of tax of $1.530 million.
6
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and review of Eufaula BancCorp, Inc. ("EBC") and
its subsidiaries, Southern Bank of Commerce ("SBC") and First American Bank
("FAB"), focuses on the results from operations which are not otherwise apparent
from the consolidated financial statements. Reference should be made to these
financial statements and the notes to the financial statements for an
understanding of this review and discussion.
Forward Looking Statements
--------------------------
This 10-QSB contains forward-looking statements based on current
expectations that involve a number of risks and uncertainties. The factors that
could cause actual results to differ materially from those we are projecting
include the following: general economic conditions; competitive factors and
pricing pressure; changes in product mix; changes in interest risks; and the
risk factors listed from time to time in the company's SEC reports, including
but not limited to the report on Form 10-QSB for the quarter ended September 30,
2000.
Results of Operations
---------------------
Net income for the three months ended September 30, 2000 was $1,759
thousand, or $0.67 per share compared with $508 thousand, or $0.19 per
share during the same period in 1999. Net income for the nine months ended
September 30, 2000 was $2,957 thousand, or $1.13 per share compared with
$1,183 thousand, or $0.45 per share during the same period in 1999. The
annualized return on average assets from continuing operations excluding the
non-recurring sale of the Huntsville and Madison branches for the nine months
ended September 30, 2000 and 1999 was 0.70% and 0.67% respectively, while the
annualized return on average equity excluding the non-recurring sale of the
Huntsville and Madison branches was 9.41% and 8.24% respectively for the same
periods.
Net Interest Income
-------------------
Net interest income, the principal source of earnings, is the difference
between the income generated by earning assets and the total interest cost of
the funds obtained to carry them. Net interest income, as referred to in this
discussion, is presented on a fully tax-equivalent basis, which adjusts for the
tax-exempt status of income earned on certain loans and investments. The
reported interest income for the tax-free assets is increased by the amount of
tax savings less the nondeductible portion of interest expense incurred to
acquire the tax-free assets. Net interest income is affected by variations in
both interest rates and the volume of interest-earning assets and interest-
bearing liabilities.
Net interest income for the first nine months of 2000 was $8.2 million
compared with $7.5 million in the first nine months of 1999. Net interest
income also increased when compared with 1998. This increase in net interest
income was primarily the result of higher loan volume and increased income from
nontaxable securities. The net interest margin through September 30, 2000 was
4.41% compared with 4.69% and 5.04% for the years ended December 31, 1999 and
1998, respectively. EBC expects no material change in the net interest margin
through the remainder of 2000.
EBC had debt of approximately $3.5 million at September 30, 2000 and
interest expense associated with this debt totaled $82 thousand during the
first nine months of 2000 compared with $90 thousand during the same period in
1999.
7
<PAGE>
Loans and Leases
----------------
EBC's gross loans and leases totaled $171.9 million at September 30, 2000
compared with $205.9 million at December 31, 1999. The Company has no foreign
loans or leases and it is the policy of the Company to avoid out of territory
loans.
A sound credit policy combined with periodic and independent credit reviews
is the key factor of the credit risk management program. All affiliate banks
operate under written loan policies that help maintain a consistent lending
function and provide sound credit decisions. Credit decisions continue to be
based on the borrower's cash flow position and the value of the underlying
collateral, as well as other relevant factors. Each bank is responsible for
evaluating its loans to identify those credits beginning to show signs of
deterioration so that prompt corrective action may be taken. In addition, a
credit administration staff operates independently of the affiliate banks. This
review team performs periodic examinations of each bank's loans and related
documentation. Results of these examinations are reviewed with the Chairman and
Chief Executive Officer, the management and board of the respective affiliate
banks and the Audit Committees.
The following table lists those loans and leases by type which are on non-
accrual status; loans by type 90 days or more past due and still accruing;
renegotiated loans by type and loans transferred to other real estate:
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999 1998
----- ----- ------
<S> <C> <C> <C>
(In thousands)
Non-performing loans:
Non-accrual loans:
Commercial & Financial $ 2 $ 274 $ 111
Real Estate - 71 185
Consumer 29 54 16
----- ----- ------
$ 31 $ 399 $ 312
----- ----- ------
Past due 90 days or more
and still accruing:
Commercial $ 0 $ 0 $ 0
Real Estate 214 0 0
Consumer 6 0 8
----- ----- ------
220 $ 0 $ 8
----- ----- ------
Renegotiated Loans: $ 0 $ 0 $ 0
----- ----- ------
Total non-performing Loans: $ 251 $ 399 $ 320
Other Real Estate, Net 30 141 1,276
----- ----- ------
Total non-performing Assets: $ 281 $ 540 $1,596
===== ===== ======
Non-Performing Loans as a %
of Outstanding Loans 0.15% .19% .21%
Non-Performing Assets as a
% of Equity Capital 1.24% 2.77% 8.43%
</TABLE>
All loans listed above as non-accrual, 90 days or more past due and
renegotiated were classified as either substandard, doubtful or loss as of
September 30, 2000.
Management remains committed to reducing the level of non-performing assets
and to minimize future risks by continuous review of the loan portfolio.
Allowance for Loan and Lease Losses
-----------------------------------
The provision for loan losses represents management's evaluation of the
overall loan portfolio quality and loss experience. During management's
periodic review of the provision throughout each quarter, the amount to be
provided is determined by the level of net charge-offs, the size of the loan
portfolio, non-performing assets, anticipated and current economic conditions
and specific reviews of performing and non-performing loans.
8
<PAGE>
During the first nine months 2000, EBC made provisions for loan losses of
$696 thousand compared with $1.0 million for the same period in 1999. Total
non-performing loans increased $210 thousand from $399 thousand at December
31, 1999 to $609 thousand at September 30, 2000. Net charge-offs through
September 30, 2000 totaled $315 thousand.
September 30, Year Ended December 31,
2000 1999 1998
---- ---- ----
Allowance as a percentage of total
loans and leases 1.31% 1.24% .88%
The allowance for loan losses as a percentage of non-performing loans was
approximately 896% at September 30, 2000, compared with 641% at December 31,
1999.
Securities Available for Sale
-----------------------------
September 30, December 31,
2000 1999 1998
------- ------- -------
(In thousands)
Market Value $22,030 $22,716 $21,219
Amortized Cost Difference 21,811 23,793 21,066
------- ------- -------
Difference $ (219) $(1,077) $ 153
======= ======= =======
Investment Securities
---------------------
September 30, December 31,
2000 1999 1998
------- ------- ------
(In thousands)
Market Value $20,776 $11,158 $7,602
Amortized Cost 20,569 11,084 7,221
------- ------- ------
Difference $ 207 $ 74 $ 381
======= ======= ======
At September 30, 2000, EBC's securities portfolio classified as Investment
Securities was composed primarily of municipal and long-term corporate
securities.
Non-Interest Income
-------------------
Management continues to emphasize the growth of non-interest income in
providing new revenue to the income stream. Future profitability depends upon
income derived from providing loan and deposit services, brokerage fees,
mortgage service fees and service charges on deposit accounts.
9
<PAGE>
The table represented below is a comparison of the dollar and percentage
change for each component of non-interest income:
<TABLE>
<CAPTION>
Nine months ended
September 30, Change
------------------- ------------------------
2000 1999 $ %
------ ------ ---------- ----------
<S> <C> <C> <C> <C>
(Dollars in Thousands)
Service Charges on Deposit Accounts $ 803 $ 712 $ 91 12.78%
Security Gains (Losses) (387) (5) (382) N/A
Gain on sale of branches 2,514 -- 2,514 N/A
Other Income 637 906 (269) (29.69%)
------ ------ ------ ------
Total Other Income $3,567 $1,613 $1,954 121.14%
====== ====== ====== ======
</TABLE>
Excluding security losses, non-interest income increased approximately $ 2.3
million when comparing 2000 with 1999 results. Of this increase, $2.5 million
related to the non-recurring gain related to the sale of the Huntsville and
Madion branches.
Non-Interest Expense
--------------------
Control of non-interest expenses continues to be one of EBC's major
objectives. Non-interest expenses include salaries, employee benefits,
occupancy costs, equipment and other operating expenses:
<TABLE>
<CAPTION>
Nine months ended
September 30, Change
---------------------- ---------------------
(Dollars in Thousands) 2000 1999 $ %
------- -------- -------- -------
<S> <C> <C> <C> <C>
Salaries $2,707 $2,472 $235 9.50%
Pension and Employee Benefits 974 992 (18) (1.81%)
Net Occupancy Expense 423 380 43 11.31%
Equipment Expense 429 411 18 4.37%
Data Processing Expense 422 237 185 78.05%
Other Operating Expense 1,721 1,787 (66) (3.69%)
------ ------ ---- -----
Total Non-Interest Expense $6,676 $6,279 $397 6.32%
====== ====== ==== =====
</TABLE>
The increase in non-interest expense when comparing the nine months ended
September 30, 2000 with the same period in 1999, was primarily the result of
higher occupancy costs related to the Huntsville operation prior to its sale.
The $185 thousand increase in data processing expenses related to an increase in
the charges from the data processor based upon the significant growth in assets
from December 1998 to December 1999. Additionally, the increase in salaries
during this same time frame was primarily the result of higher staffing costs at
the parent level and normal annual raises for all employees.
Income Taxes
------------
The effective tax rate of EBC for the nine month period ended September 30,
2000 was 33% compared to 35% for the same period in 1999.
Capital and Liquidity
---------------------
The assessment of capital adequacy depends primarily on a number of factors
which include asset quality, liquidity, stability of earnings, changing
competitive forces, economic conditions in the various markets served and
strength of management. Management of capital focuses on achieving a rate of
return for shareholders while following guidelines set forth by bank regulators.
10
<PAGE>
EBC's equity capital totaled $22.57 million at September 30, 2000,
compared to the December 31, 1999 level of $19.47 million. The growth and
retention of earnings continues to be EBC's primary source of additional
capital. Currently, EBC does not have any plans for issuing subordinated notes
and EBC has not issued any new common or preferred stock during the past twelve
months.
The table presented below is a comparison of EBC's capital position with
regulatory capital requirements:
September 30, Regulatory
2000 Requirements
----- ------------
Total Capital/Total Assets 9.73% 6.00%
Total Risk Based Capital 13.62% 8.00%
Tier 1 Capital 12.37% 4.00%
Leverage Ratio 7.92% 3.00%
Liquidity management is concerned with meeting the cash requirements of
customers, including the withdrawal of funds by depositors or drawing down of
approved lines of credit and commitments by borrowers. EBC is aided
significantly in meeting its short-term liquidity needs by its strong capital
position, its high rate of internal capital generation and its level of loan
loss reserves.
Dividend Policy
---------------
EBC strives to maintain a balance between the retention of earnings for the
support of growth and expansion and a dividend payout that meets the required
return for investors. EBC anticipates continuing its policy of regular cash
dividends, although there is no assurance as to future increases in dividends
because they are dependent upon future earnings, capital requirements and
economic conditions.
The following table sets forth the dividend payout ratio for the last two
years and for the nine months ended September 30, 2000:
September 30, Year Ended,
2000 1999 1998
---- ---- ----
Dividend payout ratio 11.95% 26.56% 45.71%
Asset - Liability Management
----------------------------
EBC, like most financial institutions, provides for the relative stability
in profits and the control in interest rate risk through asset-liability
management. An important element of asset-liability management is the analysis
and examination of the extent to which such assets and liabilities are interest
rate sensitive and by monitoring an institution's interest rate sensitivity gap.
An asset or liability is said to be interest rate sensitive within a specific
time period if it will mature or reprice within that time period. The interest
rate sensitivity gap is defined as the difference between the amount of
interest-earning assets expected to mature or reprice within a time period and
the amount of interest-bearing liabilities expected to mature or reprice within
that same time period. A gap is considered negative when the amount of interest
rate sensitive liabilities maturing within a specific time frame exceeds the
amount of interest rate sensitive assets maturing within that same time frame.
During a period of falling interest rates, a negative gap tends to result in an
increase in net interest income. Whereas in a rising interest rate environment,
an institution with a negative gap could experience the opposite results.
11
<PAGE>
EBC continually monitors its asset-liability position in order to maximize
profits and minimize interest rate risk. Additionally, EBC can reduce the
impact that changing interest rates have on earnings and adapt to changes in the
economic environment by closely monitoring its Statement of Condition. There
have been no material changes in EBC's asset-liability position since December
31, 1999.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
Not Applicable
Item 2. Changes in Securities
---------------------
Not Applicable
Item 3. Defaults Upon Senior Securities
-------------------------------
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not Applicable
Item 5. Other Information
-----------------
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
The following exhibits are filed with this report or are incorporated
by references to previously filed materials.
Exhibit No. Description of Exhibit
----------- ----------------------
27 Financial Data Schedule.
Reports on Form 8-K
-------------------
A current report on Form 8-K dated August 4, 2000 was filed on August
10, 2000 reporting the Company's sale of its Huntsville branch to First American
Bank of Decatur, Alabama, a subsidiary of Alabama National BancCorporation.
12
<PAGE>
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.
EUFAULA BANCCORP, INC.
BY /s/ Greg B. Faison
------------------
Greg B. Faison
President and Chief Executive Officer
Date: November 13, 2000
13
