<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from _____________ to ____________
Commission file number 0-18488
FIRST CHEROKEE BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
GEORGIA 58-1807887
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
9860 HIGHWAY 92, WOODSTOCK, GEORGIA 30188
(Address of principal executive offices)
770-591-9000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be 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.
[X] Yes [ ] No
The number of shares outstanding of registrant's common stock par value $1.00
per share at June 30, 1996 was 551,804 shares.
<PAGE>
First Cherokee Bancshares, Inc.
Quarterly Report on Form 10-QSB
For the Quarter Ended June 30, 1996
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I. Financial Information
Consolidated Financial Statements (unaudited)
Consolidated Balance Sheet at June 30, 1996 2
Consolidated Statements of Earnings (unaudited)
for the six months ended June 30, 1996 and 1995 3
Consolidated Statements of Earnings (unaudited)
for the three months ended June 30, 1996 and 1995 4
Consolidated Statements of Cash Flows (unaudited)
for the six months ended June 30, 1996 and 1995 5
Notes to Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition 7
and Results of Operations
Part II. Other Information
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Item 7. Signatures 14
</TABLE>
1
<PAGE>
FIRST CHEROKEE BANCSHARES, INC.
Consolidated Balance Sheet
June 30, 1996
(Unaudited)
ASSETS
------
<TABLE>
<S> <C>
Cash & due from banks, including $10,885,119
bearing interest $16,218,856
Federal funds sold 480,000
-----------
Total cash & cash equivalents 16,698,856
Investment securities available for sale,
at fair value 1,997,632
Loans, less allowance for loan losses
of $677,500 54,979,328
Premises and equipment 2,023,558
Accrued interest receivable and other assets 5,526,109
-----------
TOTAL ASSETS $81,225,483
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
LIABILITIES:
Deposits:
Interest-bearing deposits $65,881,916
Noninterest-bearing deposits 8,304,551
-----------
Total deposits 74,186,467
Accrued interest payable and other liabilities 579,118
-----------
TOTAL LIABILITIES 74,765,585
STOCKHOLDERS' EQUITY:
Common stock ($1 par value; 10,000,000
shares authorized, 561,044 shares issued) 561,044
Additional paid-in-capital 5,026,457
Retained earnings 953,630
Treasury Stock (9,240 shares acquired at cost) (84,000)
Unrealized gains on available for
sale securities, net of tax effect 2,767
-----------
TOTAL STOCKHOLDERS' EQUITY 6,459,898
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $81,225,483
===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2
<PAGE>
FIRST CHEROKEE BANCSHARES, INC.
Consolidated Statements of Earnings
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, 1996 JUNE 30, 1995
------------- -------------
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $2,886,610 $2,811,138
Interest on investment securities 42,277 107,062
Interest on federal funds sold/overnight funds 384,205 218,385
---------- ----------
TOTAL INTEREST INCOME 3,313,092 3,136,585
INTEREST EXPENSE ON DEPOSITS 1,922,953 1,580,000
---------- ----------
NET INTEREST INCOME 1,390,139 1,556,585
Provision for loan losses 65,665 148,470
---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN
LOSSES 1,324,474 1,408,115
OTHER INCOME:
Gain on sale of investment securities 0 0
Gain on sales of loans 756,693 814,180
Service charges on deposit accounts and
other income 272,240 191,730
---------- ----------
TOTAL OTHER INCOME 1,028,933 1,005,910
OTHER EXPENSE:
Salaries and employee benefits 984,766 802,579
Occupancy 255,937 242,440
Other operating expense 610,792 476,718
---------- ----------
TOTAL OTHER EXPENSE 1,851,495 1,521,737
EARNINGS BEFORE INCOME TAXES 501,912 892,288
INCOME TAXES 190,600 304,000
NET EARNINGS $311,312 $588,288
========== ==========
NET EARNINGS PER SHARE (NOTE 2):
PRIMARY $0.50 $1.17
===== =====
FULLY DILUTED $0.48 $1.17
===== =====
WEIGHTED AVERAGE NUMBER OF SHARES AND EQUIVALENTS:
PRIMARY 662,324 551,804
======= =======
FULLY DILUTED 662,324 551,804
======= =======
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
FIRST CHEROKEE BANCSHARES, INC.
Consolidated Statements of Earnings
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
JUNE 30, 1996 JUNE 30, 1995
------------- -------------
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $1,445,330 $1,451,666
Interest on investment securities 20,736 52,960
Interest on federal funds sold/overnight funds 197,266 142,763
---------- ----------
TOTAL INTEREST INCOME 1,663,332 1,647,389
INTEREST EXPENSE ON DEPOSITS 961,003 891,215
---------- ----------
NET INTEREST INCOME 702,329 756,174
Provision for loan losses 25,668 55,136
---------- ----------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 676,661 701,038
OTHER INCOME:
Gain on sale of investment securities 0 0
Gain on sales of loans 345,440 326,966
Service charges on deposit accounts
and other income 139,562 91,519
---------- ----------
TOTAL OTHER INCOME 485,002 418,485
OTHER EXPENSE:
Salaries and employee benefits 493,410 392,750
Occupancy 120,767 122,257
Other operating expense 333,073 239,217
---------- ---------
TOTAL OTHER EXPENSE 947,250 754,224
EARNINGS BEFORE INCOME TAXES 214,413 365,299
INCOME TAXES 81,600 124,000
NET EARNINGS $132,813 $241,299
========== ==========
NET EARNINGS PER SHARE (NOTE 2):
PRIMARY $0.23 $0.48
===== =====
FULLY DILUTED $0.21 $0.48
===== =====
WEIGHTED AVERAGE NUMBER OF SHARES AND EQUIVALENTS:
PRIMARY 662,324 551,804
======= =======
FULLY DILUTED 662,324 551,804
======= =======
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE>
FIRST CHEROKEE BANCSHARES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, 1996 JUNE 30, 1995
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET EARNINGS $ 311,312 $ 588,288
ADJUSTMENTS TO RECONCILE NET EARNINGS TO
NET CASH PROVIDED (USED) IN OPERATING
ACTIVITIES:
Depreciation, amortization and accretion 69,780 92,592
Provision for loan losses 65,665 (148,470)
Securities gains 0 0
Change in accrued interest payable
and other liabilities (3,408) 357,826
Change in accrued interest receivable
and other assets (424,450) (1,534,976)
----------- ----------
TOTAL ADJUSTMENTS (292,413) (1,233,028)
----------- ----------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 18,899 (644,740)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investment securities 0 0
Proceeds from sale of investment securities 0 0
Proceeds from maturities and calls of
investment securities available for sale (403,358) (99,186)
Net change in loans (808,480) (6,251,711)
Purchases of premises and equipment (78,231) (36,489)
---------- ----------
NET CASH USED BY INVESTING ACTIVITIES (1,290,069) (6,387,386)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in deposits (1,934,534) 13,997,511
---------- ----------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES (1,934,534) 13,997,511
---------- ----------
NET CHANGE IN CASH AND CASH EQUIVALENTS (3,025,704) 6,965,385
BEGINNING CASH AND CASH EQUIVALENTS 19,904,560 8,084,965
----------- -----------
ENDING CASH AND CASH EQUIVALENTS $16,698,856 $15,050,350
NONCASH INVESTING ACTIVITIES:
CHANGE IN UNREALIZED GAIN ON SECURITIES
AVAILABLE FOR SALE, NET OF TAX EFFECT $(4,174) $92,047
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
INTEREST PAID $1,931,413 $1,570,595
INCOME TAXES PAID $175,000 $465,000
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE>
FIRST CHEROKEE BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1996
NOTE (1) - BASIS OF PRESENTATION
The consolidated financial statements include the accounts of First Cherokee
Bancshares, Inc. (the "Company") and its wholly-owned subsidiary, First National
Bank of Cherokee (the "Bank"). All significant accounts have been eliminated in
consolidation. Certain prior period amounts have been reclassified to conform
with current year presentation.
The accompanying unaudited interim consolidated financial statements reflect all
adjustments which, in the opinion of management, are necessary to present fairly
the Company's financial position as of June 30, 1996, and the results of its
operations and its cash flows for the six-month period then ended. All such
adjustments are normal and recurring in nature. The financial statements
included herein should be read in conjunction with the consolidated financial
statements and the notes thereto and the report of independent accountants
included in the Company's 1995 Annual Report on Form 10-KSB.
NOTE (2) - NET EARNINGS PER SHARE
Net earnings per share are based on the weighted average number of shares
outstanding during each year including consideration of stock options and stock
warrants, which represent common stock equivalents. It is assumed that all
dilutive common stock equivalents are exercised at the beginning of the year and
that the proceeds are used to purchase shares of the Company's common stock. The
average market price during each period is used to compute equivalent shares
assumed to be acquired for primary earnings per share, whereas period end prices
are used for fully diluted per share amounts. The resulting difference in the
calculation of primary and fully diluted earnings per share is due to the
application of the modified treasury stock method, which is applied in instances
in which dilutive common stock equivalents exceed 20% of the outstanding common
stock.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1996
The following narrative should be read in conjunction with the Company's
consolidated financial statements and the notes thereto.
FINANCIAL CONDITION
Assets of the Company decreased $2.2 million during the second quarter of 1996
as compared to an exceptional increase of $10.7 million during the second
quarter of 1995. The decrease is primarily due to a decrease in certificates
of deposit. The Company has been working toward increasing the percent of
noninterest-bearing deposits to total deposits in order to improve cost of funds
and, therefore, is allowing certain large rate-sensitive certificates to mature.
The Company also continued to be profitable, though not as profitable as in
prior quarters. The average yield on earning assets for the first six months of
1996 decreased to 9.59% as compared to 10.46% for the first six months of 1995.
The decrease was due to a higher level of nonperforming loans in 1996 than 1995
as well as lower interest rates. Many of the Bank's loan products are tied to
the prime interest rate which is lower in 1996 than 1995. The average cost of
funds on interest-bearing deposits increased for the first two quarters of 1996
to 5.81%, as compared to 5.50% for the first two quarters of 1995, primarily as
a result of competition in the Bank's immediate market area. Consequently, the
net interest spread for the first two quarters of 1996 decreased to 3.78%
compared to 4.96% for the first two quarters of 1995.
Loans increased from $52.1 million at June 30, 1995 to $54.2 million at
December 31, 1995, and $54.9 million at June 30, 1996. Management anticipates
loan production will continue to increase during the remainder of the year.
The following table presents major classifications of loans at June 30, 1996:
<TABLE>
<CAPTION>
% of
Total
Total Loan
Loans Portfolio
----- ---------
<S> <C> <C>
Commercial $11,647,123 20.92%
SBA - unguaranteed 11,313,673 20.33%
Real estate - mortgage 21,154,079 38.01%
Real estate - construction 7,291,100 13.10%
Installment and other consumer 4,250,853 7.64%
----------- -------
Total loans 55,656,828 100.00%
Less: Allowance for loan losses (677,500)
-----------
Total net loans $54,979,328
</TABLE>
7
<PAGE>
Total deposits were $74.1 million at June 30, 1996 compared to $76.1 million at
December 31, 1995 and $71.0 million at June 30, 1995. As mentioned previously,
certain large rate-sensitive certificates of deposit are being allowed to mature
in order to improve the mix of deposits and cost of funds. Deposits are
projected to increase during the remainder of 1996.
A provision of $25,668 was added to the Allowance for Loan and Lease Losses
during the second quarter of 1996, bringing total provisions for the year to
$65,665. The provisions are primarily attributable to the increased level of
nonperforming loans at June 30, 1996 compared to June 30, 1995. (See
Nonaccrual, Past Due, and Restructured Loans). The allowance had a balance of
$677,500 at June 30, 1996, representing 1.23% of loans. Chargeoffs were
$107,807 while recoveries were $33,936, resulting in net chargeoffs of $73,871
during the first two quarters of 1996. Management believes this allowance is
adequate to cover possible loan losses. The following table presents the
activity in the allowance for loan losses for the first two quarters of 1996.
At June 30, 1996, the Bank had one loan that required a specific allocation of
$25,000; the remainder of the allowance at that date was unallocated.
TABLE 1
FIRST CHEROKEE BANCSHARES, INC.
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
<TABLE>
<S> <C>
Balance, December 31, 1995 $685,706
Chargeoffs (107,807)
Recoveries 33,936
Provision for Loan Losses 65,665
--------
Balance, June 30, 1996 $677,500
--------
</TABLE>
NONACCRUAL, PAST DUE AND RESTRUCTURED LOANS
At June 30, 1996, the Bank had eight borrowers classified as nonaccrual totaling
$908,461. Four loans in the amount of $85,708 are secured by vehicles, equipment
or inventory while the remaining loans are secured by real estate. The
nonaccrual loans are either greater than ninety days delinquent as of June 30,
1996 or are classified as nonaccrual by management because the collection of
interest from the borrower is doubtful. A specific reserve of $25,000 has been
allocated on one real estate loan in the amount of $712,567. No material loss is
anticipated on the other nonaccrual loans so no additional specific reserves or
writedowns are considered necessary at this time. If interest income on the
total nonaccrual loans had been accrued, such income would have approximated
$91,446 as of June 30, 1996. Interest income on such loans, recorded only when
received, was approximately $6,048 during the second quarter of 1996. As of
June 30, 1996, the Bank had five properties classified as Other Real Estate
Owned, totaling $1,305,549. The ratio of loans past due 30 days or more to total
loans was 1.92% at June 30, 1996 compared to 1.35% at June 30, 1995. There were
no loans past due greater
8
<PAGE>
than 90 days that were on accrual status as of June 30, 1996 or June 30, 1995.
There were no restructured loans as of June 30, 1996 or June 30, 1995.
LIQUIDITY
The Company's primary sources of funds are increases in deposits, loan
repayments, and sales and maturities of investments. Liquidity refers to the
ability of the Company to meet its cash flow requirements and fund its
commitments. The Company manages the levels, types, and maturities of earning
assets in relation to the sources available to fund current and future needs to
ensure that adequate funding will be available at all times. The Company
monitors its compliance with regulatory liquidity requirements and anticipates
that funding requirements will be satisfactorily met.
CAPITAL RESOURCES
At June 30, 1996, consolidated stockholders' equity was $6,459,898 or 7.95% of
total assets compared to $5,665,954 or 7.29% of total assets at June 30, 1995.
The Company's common stock had a book value of $11.51 per share at June 30, 1996
(adjusted for the 10% stock dividend declared on January 17, 1996 and paid on
April 1, 1996), compared to $11.29 book value per share at June 30, 1995. At the
end of the second quarter of 1996, the Company had approximately 650
stockholders of record.
The Bank and the Company are subject to the capital requirements of the Office
of the Comptroller of the Currency (the "OCC") and the Federal Reserve Bank (the
"FRB"). The OCC and FRB have adopted risk-based capital guidelines for all
national banks and holding companies, respectively. To be "adequately
capitalized," all national banks are expected to maintain a minimum ratio of
total capital (after deductions) to risk-weighted assets of 8% (of which at
least 4% must consist of Tier 1 Capital, as defined).
The following table sets forth information with respect to the Bank's capital
ratios at June 30, 1996 and 1995 compared to minimum ratios required by
regulation. The Company's capital ratios are similar to those of the Bank and
exceed the minimum risk-weighted requirements of the FRB.
9
<PAGE>
FIRST CHEROKEE BANCSHARES, INC.
CAPITAL CALCULATIONS
<TABLE>
<CAPTION>
TABLE 2
6/30/96 6/30/95
(Bank Only) (Bank Only)
----------------------------------------
Amount Amount
(in 000's) Ratio (in 000's) Ratio
---------- ----- ---------- -----
<S> <C> <C> <C> <C>
RISK-BASED CAPITAL RATIOS:
Tier 1 Capital per regulations $5,706 9.31% $5,304 9.32%
Minimum Requirement per regulations 2,459 4.00% 2,275 4.00%
------ ------ ------ ------
Excess $3,247 5.31% $3,029 5.32%
Tier 1 and Tier 2 Capital $6,384 10.42% $5,914 10.40%
Total Capital Minimum
Requirement 4,902 8.00% 4,550 8.00%
------ ------ ------ ------
Excess $1,482 2.42% $1,364 2.40%
LEVERAGE RATIOS:
Tier 1 Capital $5,706 7.03% $5,304 6.82%
Minimum Requirement per regulations 3,249 4.00% 3,110 4.00%
------ ------ ------ ------
Excess $2,457 3.03% $2,194 2.82%
</TABLE>
RESULTS OF OPERATIONS
The Company recognized net earnings of $311,312 for the six months ended June
30, 1996. In comparison, net earnings for the six months ending June 30, 1995
were $588,288. Actual earnings for the first two quarters of 1996 are slightly
less than projected. The primary reason for the decrease in net earnings
continues to be the increase of costs relative to the increase in nonperforming
assets.
Net interest income for the first six months of 1996 was $1,390,139 as compared
to $1,556,585 for the first six months of 1995. Interest income on loans has
been adversely impacted due to the increased level of nonperforming loans. The
annualized ratio of operating expenses to average assets has deteriorated from
4.38% for the six months of 1995 to 4.57% for the first six months of 1996.
The deterioration is primarily due to the increase of costs, such as legal fees,
relative to resolving problem assets. While management expects this ratio to
improve during the remaining two quarters of 1996, no assurance can be given
that it will do so.
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders
(a) An Annual Shareholders Meeting was held on April 17, 1996.
(b) All of the Company's directors were elected to serve one year
terms until the annual meeting of shareholders in 1997. The
following table sets forth the number of votes cast for and
withheld with respect to each nominated Director. There were no
abstentions or broker non-votes.
<TABLE>
<CAPTION>
Name of Nominee Votes for Votes Withheld
--------------- --------- --------------
<S> <C> <C>
Alan D. Bobo 323,030 0
Elwin K. Bobo 323,030 0
Michael A. Edwards 323,030 0
J. Stanley Fitts 323,030 0
Russell L. Flynn 323,030 0
Carl C. Hames, Jr. 323,030 0
C. Garry Haygood 323,030 0
Thomas D. Hopkins 323,030 0
Bobby R. Hubbard 323,030 0
Dennis M. Lord 323,030 0
Larry R. Lusk 323,030 0
Dr. Stuart R. Tasman 323,030 0
</TABLE>
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits filed in accordance with Item 601 of Regulation S-B:
27 Financial Data Schedule
b The Company has not filed any reports on Form 8-K during the six
months ended June 30, 1996.
c. Computation of Earnings Per Share.
Item 7. Signatures - attached
11
<PAGE>
COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30
1996 1995
---- ----
<S> <C> <C>
PRIMARY EARNINGS PER SHARE
Earnings: Net earnings $311,312 $588,288
Excess proceeds invested in U.S.
government securities @ 5.28% 19,724 0*
-------- --------
Net earnings available to common stock 331,036 588,288
Shares: Weighted average number of common
shares outstanding 551,804 551,804
Additional shares assuming conversion of:
Stock warrants 196,350 0*
Stock options 24,531 0*
Less 20% limitation (110,361) 0*
-------- --------
Average common shares and equivalents outstanding 662,324 551,804
Primary earnings per share $0.50 $1.17
FULLY DILUTED EARNINGS PER SHARE
Earnings: Net earnings $311,312 $588,288
Excess proceeds invested in U.S.
government securities @ 5.28% 6,880 0*
-------- --------
Net earnings available to common stock 318,192 588,288
Shares: Weighted average number of common
shares outstanding 551,804 551,804
Additional shares assuming conversion of:
Stock warrants 196,350 0*
Stock options 24,531 0*
Less 20% limitation (110,361) 0*
-------- --------
Average common shares and equivalents outstanding 662,324 551,804
Primary earnings per share $0.48 $1.17
</TABLE>
*The effect of common stock equivalents at June 30, 1995 did not result in
material dilution
12
<PAGE>
COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
June 30
1996 1995
---- ----
<S> <C> <C>
PRIMARY EARNINGS PER SHARE
Earnings: Net earnings $132,813 $241,299
Excess proceeds invested in U.S.
government securities @ 5.28% 19,724 0*
-------- --------
Net earnings available to common stock 152,537 241,299
Shares: Weighted average number of common
shares outstanding 551,804 551,804
Additional shares assuming conversion of:
Stock warrants 196,350 0*
Stock options 24,531 0*
Less 20% limitation (110,361) 0*
-------- --------
Average common shares and equivalents outstanding 662,324 551,804
Primary earnings per share $0.23 $0.48
FULLY DILUTED EARNINGS PER SHARE
Earnings: Net earnings $132,813 $241,299
Excess proceeds invested in U.S.
government securities @ 5.28% 6,880 0*
-------- --------
Net earnings available to common stock 139,693 241,299
Shares: Weighted average number of common
shares outstanding 551,804 551,804
Additional shares assuming conversion of:
Stock warrants 196,350 0*
Stock options 24,531 0*
Less 20% limitation (110,361) 0*
-------- --------
Average common shares and equivalents outstanding 662,324 551,804
Primary earnings per share $0.21 $0.48
</TABLE>
*The effect of common stock equivalents at June 30, 1995 did not result in
material dilution
13
<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.
FIRST CHEROKEE BANCSHARES, INC.
(Registrant)
DATE: August 9, 1996 BY: /c/CARL C. HAMES, JR.
--------------------------
Carl C. Hames, Jr.
President & CEO/Principal
Executive Officer
DATE: August 9, 1996 BY: /c/KITTY A. KENDRICK
--------------------------
Kitty A. Kendrick
Principal Financial Officer
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 16,218,856
<INT-BEARING-DEPOSITS> 10,885,119
<FED-FUNDS-SOLD> 480,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,997,632
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 54,979,328
<ALLOWANCE> 677,500
<TOTAL-ASSETS> 81,225,483
<DEPOSITS> 74,186,467
<SHORT-TERM> 0
<LIABILITIES-OTHER> 579,118
<LONG-TERM> 0
0
0
<COMMON> 561,044
<OTHER-SE> 5,898,854
<TOTAL-LIABILITIES-AND-EQUITY> 81,225,483
<INTEREST-LOAN> 2,886,610
<INTEREST-INVEST> 42,277
<INTEREST-OTHER> 384,205
<INTEREST-TOTAL> 3,313,092
<INTEREST-DEPOSIT> 1,922,953
<INTEREST-EXPENSE> 1,922,953
<INTEREST-INCOME-NET> 1,390,139
<LOAN-LOSSES> 65,665
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,851,495
<INCOME-PRETAX> 501,912
<INCOME-PRE-EXTRAORDINARY> 501,912
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 311,312
<EPS-PRIMARY> 0.50
<EPS-DILUTED> 0.48
<YIELD-ACTUAL> 9.59
<LOANS-NON> 908,461
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 685,706
<CHARGE-OFFS> 107,807
<RECOVERIES> 33,936
<ALLOWANCE-CLOSE> 677,500
<ALLOWANCE-DOMESTIC> 677,500
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 652,500
</TABLE>
