<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, 1997
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, 1997 was 582,304 shares.
<PAGE>
First Cherokee Bancshares, Inc.
Quarterly Report on Form 10-QSB
For the Quarter Ended June 30, 1997
Index
-----
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I. Financial Information
Consolidated Financial Statements (unaudited)
Consolidated Balance Sheet at June 30, 1997 2
Consolidated Statements of Earnings (unaudited)
for the six months ended June 30, 1997 and 1996 3
Consolidated Statements of Earnings (unaudited)
for the three months ended June 30, 1997 and 1996 4
Consolidated Statements of Cash Flows (unaudited)
for the six months ended June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition 8
and Results of Operations
Part II. Other Information
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Item 7. Signatures 17
</TABLE>
1
<PAGE>
First Cherokee Bancshares, Inc.
Consolidated Balance Sheet
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Assets
------
<S> <C>
Cash & due from banks, including $6,732,852
bearing interest $9,623,720
Federal funds sold 0
-
Total cash & cash equivalents 9,623,720
Investment securities available for sale,
at fair value 646,543
Loans, less allowance for loan losses
of $927,149 65,277,907
Premises and equipment, net 2,431,845
Accrued interest receivable and other assets 7,380,267
---------
Total Assets $85,360,282
===========
Liabilities and Stockholders' Equity
------------------------------------
Liabilities:
Deposits:
Interest-bearing deposits $67,245,216
Noninterest-bearing deposits 9,988,532
---------
Total deposits 77,233,748
Accrued interest payable and other liabilities 859,712
-------
Total Liabilities 78,093,460
Stockholders' Equity:
Common stock ($1 par value; 10,000,000
shares authorized, 591,544 shares issued) 591,544
Additional paid-in-capital 5,273,257
Retained earnings 1,487,439
Treasury Stock (9,240 shares acquired
at cost) (84,000)
Unrealized losses on available for
sale securities, net of tax effect (1,418)
------
Total Stockholders' Equity 7,266,822
=========
Total Liabilities and Stockholders' Equity $85,360,282
===========
</TABLE>
See notes to consolidated financial statements
2
<PAGE>
First Cherokee Bancshares, Inc.
Consolidated Statements of Earnings
For the six months ended June 30,
(Unaudited)
<TABLE>
<CAPTION>
Interest income: 1997 1996
---- ----
<S> <C> <C>
Interest and fees on loans $3,419,556 $2,886,610
Interest on investment securities 27,455 42,277
Interest on federal funds sold/overnight funds 123,215 384,205
------- -------
Total interest income 3,570,226 3,313,092
Interest expense on deposits 1,729,637 1,922,953
--------- ---------
Net interest income 1,840,589 1,390,139
Provision for loan losses 292,135 65,665
------- ------
Net interest income after provision
for loan losses 1,548,454 1,324,474
--------- ---------
Other income:
Gain on sale of investment securities 0 0
Gain on sales of loans 755,153 756,693
Service charges on deposit accounts
and other income 428,858 272,240
------- -------
Total other income 1,184,011 1,028,933
--------- ---------
Other expense:
Salaries and employee benefits 1,039,337 984,766
Occupancy 247,515 255,937
Provision for estimated losses
and other real estate expenses, net 104,051 39,792
Other operating expense 655,796 571,000
------- -------
Total other expense 2,046,699 1,851,495
--------- ---------
Earnings before income taxes 685,766 501,912
Income Taxes 258,865 190,600
------- -------
Net earnings $426,901 $311,312
======== ========
Net earnings per share (Note 2):
Primary $0.65 $0.50
==== ====
Fully Diluted $0.65 $0.48
===== =====
Weighted average number of shares and equivalents:
Primary 656,328 662,324
======= =======
Fully Diluted 656,328 662,324
======= =======
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
First Cherokee Bancshares, Inc.
Consolidated Statements of Earnings
For the three months ended June 30,
(Unaudited)
<TABLE>
<CAPTION>
Interest income: 1997 1996
---- ----
<S> <C> <C>
Interest and fees on loans $1,800,614 $1,445,330
Interest on investment securities 13,681 20,736
Interest on federal funds sold/overnight funds 61,958 197,266
---------- ----------
Total interest income 1,876,253 1,663,332
Interest expense on deposits 878,558 961,003
---------- ----------
Net interest income 997,695 702,329
Provision for loan losses 219,800 25,668
---------- ----------
Net interest income after provision
for loan losses 777,895 676,661
---------- ----------
Other income:
Gain on sale of investment securities 0 0
Gain on sales of loans 577,819 345,440
Service charges on deposit accounts
and other income 207,544 139,562
---------- ----------
Total other income 785,363 485,002
---------- ----------
Other expense:
Salaries and employee benefits 554,326 493,410
Occupancy 127,001 120,767
Provision for estimated losses
and other real estate expenses, net 96,544 37,807
Other operating expense 340,234 295,266
---------- ----------
Total other expense 1,118,105 947,250
---------- ----------
Earnings before income taxes 445,153 214,413
Income Taxes 167,750 81,600
---------- ----------
Net earnings $277,403 $132,813
========== ==========
Net earnings per share (Note 2):
Primary $0.42 $0.23
========== ==========
Fully Diluted $0.42 $0.21
========== ==========
Weighted average number of shares and equivalents:
Primary 653,602 662,324
========== ==========
Fully Diluted 653,602 662,324
========== ==========
</TABLE>
See notes to consolidated financial statements
4
<PAGE>
First Cherokee Bancshares, Inc.
Consolidated Statements of Cash Flows
For the six months ended June 30,
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net earnings $426,901 $311,312
Adjustments to reconcile net earnings to net cash
provided (used) in operating activities:
Depreciation, amortization and accretion 49,549 69,780
Provision for loan losses 292,135 65,665
Provision for losses on other real estate 83,199 4,500
Securities gains 0 0
Change in accrued interest payable and
other liabilities 213,215 (3,408)
Change in accrued interest receivable and
other assets (2,076,900) 397,297
------------ ------------
Total adjustments (1,438,802) 533,834
------------ ------------
Net Cash provided (used) by operating
activities (1,011,901) 845,146
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 163,784 (403,358)
Net change in loans (4,522,130) (1,634,727)
Purchases of premises and equipment (503,837) (78,231)
------------ ------------
Net Cash used by investing activities (4,862,183) (2,116,316)
Cash flows from financing activities:
Net change in deposits 8,836,630 (1,934,534)
Proceeds from exercise of stock warrants 277,300 0
------------ ------------
Net Cash provided (used) by financing
activities 9,113,930 (1,934,534)
Net change in cash and cash equivalents 3,239,846 (3,205,704)
Beginning cash and cash equivalents 6,383,874 19,904,560
------------ ------------
Ending cash and cash equivalents $9,623,720 $16,698,856
Noncash investing activities:
Change in unrealized gain on securities
available for sale, net of tax effect ($5,962) ($4,174)
Transfer of loans to other real estate $805,423 $826,247
Supplemental disclosure of cash flow information:
Interest Paid $1,733,552 $1,931,413
Income Taxes Paid $165,000 $175,000
</TABLE>
See notes to consolidated financial statements
5
<PAGE>
FIRST CHEROKEE BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1997
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, 1997, 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 1996 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.
NOTE (3) - RECENT ACCOUNTING PRONOUNCEMENTS
- -------------------------------------------
During 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS 128) and SFAS
No. 129, "Disclosure of Information About Capital Structure" (SFAS 129). SFAS
128 simplifies current standards by eliminating the presentation of primary
earnings per share and requiring the presentation of basic earnings per share,
which includes no potential common shares and thus no dilution. The Statement
also requires entities with complex capital structures to present basic and
diluted earnings per share on the face of the income statement and also
eliminates the modified treasury stock method of computing potential common
shares. SFAS No. 129 simply consolidates the established accounting
pronouncements on required disclosure of information about a company's capital
structure. The Statement contains no new requirements for companies that
reported previously under those established accounting pronouncements. Both
standards are effective for financial statements issued for periods ending after
6
<PAGE>
December 15, 1997, including interim periods. Early application is not
permitted. Upon adoption of SFAS 128, restatement of all prior-period earnings
per share data presented is required. If SFAS 128 were applied for the six
months ended June 30, 1997, proforma basic and diluted earnings per share would
be $0.74 and $0.55, respectively. For the three months ended June 30, 1997,
proforma basic and diluted earnings per share would be $0.48 and $0.36,
respectively.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997
The following narrative should be read in conjunction with the Company's
consolidated financial statements and the notes thereto.
FINANCIAL CONDITION
- -------------------
Total assets as of June 30, 1997 were $85.4 million compared to $81.2 million as
of June 30, 1996. Assets of the Company increased $2.1 million during the second
quarter of 1997 as compared to a decrease of $2.2 million during the second
quarter of 1996. The increase during the second quarter of 1997 was primarily
due to normal growth.
The Company's second quarter earnings were $277,403, representing earnings per
share of $.42. The average yield on earning assets for the first half of 1997
increased to 10.06% as compared to 9.59% for the first half of 1996. The
increase was primarily due to a lower level of nonperforming loans in 1997 than
1996 as well as a .25% increase in the Bank's prime interest rate. The average
cost of funds on interest-bearing deposits decreased for the first half of 1997
to 5.44%, as compared to 5.81% for the first half of 1996. The improvement was
primarily a result of the Bank's on-going effort to restructure the deposit base
from higher rate institutional certificates to core deposits. Consequently, the
net interest spread for the first two quarters of 1997 increased to 4.62%
compared to 3.78% for the first two quarters of 1996. The net interest spread is
expected to remain stable for the remainder of the year.
Loans increased from $55.0 million at June 30, 1996 to $65.3 million at June 30,
1997. 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, 1997:
<TABLE>
<CAPTION>
% of
Total
Total Loan
Loans Portfolio
----- ---------
<S> <C> <C>
Commercial $ 9,347,885 14.12%
SBA - unguaranteed 16,749,900 25.30%
Real estate - mortgage 22,648,508 34.21%
Real estate - construction 13,110,684 19.80%
Installment and other consumer 4,348,079 6.57%
------------ ------
Total loans 66,205,056 100.00%
======
Less: Allowance for loan losses (927,149)
-------
Total net loans $ 65,277,907
============
</TABLE>
8
<PAGE>
Net premises and equipment were $2.4 million at June 30, 1997 compared to $2.0
million at June 30, 1996. The increase was primarily due to the acquisition of
land in the amount of $400,000 for a future branch site. Other assets increased
from $5.5 million as of June 30, 1996 to $7.4 million as of June 30, 1997. The
increase was primarily attributable to SBA guarantees in the amount of
$2,252,548 on sold SBA loans pending cash receipt as of June 30, 1997 as
compared to $0 as of June 30, 1996. Cash is normally received within fourteen
days of a sale.
Total deposits were $77.2 million at June 30, 1997 compared to $74.2 million at
June 30, 1996. As of June 30, 1997, interest-bearing deposits and non
interest-bearing deposits were $67.2 million and $10.0 million, respectively. As
of June 30, 1996, interest-bearing deposits and non interest-bearing deposits
were $65.9 million and $8.3 million respectively.
A provision of $219,800 was added to the Allowance for Loan and Lease Losses
("ALLL") during the second quarter of 1997, bringing total provisions for the
year to $292,135. The provision is primarily attributable to the increased level
of loans at June 30, 1997 compared to June 30, 1996. Additionally, the Bank's
goal is to increase the ratio of the ALLL to total loans to approximately 1.50%
by December 31, 1997. The allowance had a balance of $927,149 at June 30, 1997,
representing 1.42% of loans. Chargeoffs were $240,252 while recoveries were
$16,995, resulting in net chargeoffs of $223,257 during the first half of 1997.
Management believes this allowance is adequate to cover possible loan losses.
The following table presents the activity in the ALLL for the first two quarters
of 1997. At June 30, 1997, the Bank had one loan that required a specific
allocation totaling $18,929. The remaining allowance, less any surplus in the
allowance based on an internal analysis, is attributed to the loan categories
based on the relative percentage of the particular category to total loans. Any
surplus is considered unallocated.
<TABLE>
<CAPTION>
FIRST CHEROKEE BANCSHARES, INC.
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
<S> <C>
Balance, December 31, 1996 $858,271
Chargeoffs (240,252)
Recoveries 16,995
Provision for Loan Losses 292,135
-------
Balance, June 30, 1997 $927,149
========
</TABLE>
9
<PAGE>
NONACCRUAL, PAST DUE AND RESTRUCTURED LOANS
- -------------------------------------------
At June 30, 1997, the Bank had six loans classified as nonaccrual totaling
$600,055, each of which is secured by real estate, vehicles, equipment or
inventory. The nonaccrual loans are either greater than ninety days delinquent
as of June 30, 1997 or are classified as nonaccrual by management because the
collection of interest from the borrower is doubtful. No material loss is
anticipated on the nonaccrual loans so no 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 $45,992 as of June
30, 1997. Interest income on such loans, recorded only when received, was
approximately $17,000 for the first half of 1997. As of June 30, 1997, the Bank
had four properties classified as Other Real Estate Owned, totaling $1,347,862.
Each property is currently under contract for sale or its sale is being
negotiated. The ratio of loans past due 30 days or more to total loans was 2.02%
at June 30, 1997 compared to 1.92% at June 30, 1996. There were two loans
totaling approximately $85,000 past due greater than 90 days that were on
accrual status as of June 30, 1997, which were ultimately renewed or payment was
received. There were no loans past due greater than 90 days that were on accrual
status as of June 30, 1996. There were no restructured loans as of June 30, 1997
or June 30, 1996.
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, 1997, consolidated stockholders' equity was $7,266,822 or 8.51% of
total assets compared to $6,459,898 or 7.95% of total assets at June 30, 1996.
The Company's common stock had a book value of $12.48 per share at June 30, 1997
compared to a book value of $11.51 per share at June 30, 1996. In January 1997,
30,500 shares of stock were issued as a result of the exercise of certain
warrants. At the end of the second quarter of 1997, 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 ("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).
10
<PAGE>
The following table sets forth information with respect to the Bank's capital
ratios at June 30, 1997 and 1996 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.
FIRST CHEROKEE BACSHARES, INC.
CAPITAL CALCULATIONS
<TABLE>
<CAPTION>
6/30/97 6/30/96
(Bank Only) (Bank Only)
--------------------------------------------------------
Amount Amount
(in 000's) Ratio (in 000's) Ratio
Risk-Based Capital Ratios: -------- ----- -------- -----
<S> <C> <C> <C> <C>
Tier 1 Capital $6,615 9.75% $5,706 9.31%
Minimum requirement per
regulations 2,715 4.00% 2,459 4.00%
------ ----- ------ -----
Excess $3,900 5.75% $3,247 5.31%
====== ===== ====== =====
Tier 1 and Tier 2 Capital $7,461 10.99% $6,384 10.42%
Total Capital minimum
requirement per regulations 5,430 8.00% 4,902 8.00%
------ ----- ------ -----
Excess $2,031 2.99% $1,482 2.42%
====== ===== ====== =====
Leverage Ratios:
Tier 1 Capital $6,615 8.09% $5,706 7.03%
Minimum requirement per
regulations 3,272 4.00% 3,249 4.00%
------ ----- ------ -----
Excess $3,343 4.09% $2,457 3.03%
====== ===== ====== =====
</TABLE>
11
<PAGE>
RESULTS OF OPERATIONS
- ---------------------
The Company recognized net earnings of $426,901 for the six months ended June
30, 1997. In comparison, net earnings for the six months ended June 30, 1996
were $311,312. Actual earnings for the first half of 1997 were within $1,450 or
.34% of projections.
Net interest income for the first six months of 1997 was $1,840,589 as compared
to $1,390,139 for the first six months of 1996. Total other income for the first
two quarters of 1997 was $1,184,011 compared to $1,028,933 for the first two
quarters of 1996. This increase is primarily due to increased transaction volume
on deposits as well as increased fees relative to the transactions. The
annualized ratio of operating expenses to average assets has increased to 4.96%
for the first six months of 1997 from 4.57% for the first six months of 1996.
The increase is primarily due to the ongoing costs, such as legal fees, related
to resolving problem assets.
Subsequent to June 30, 1997, the Company discovered a potential fraud loss on a
deposit account as a result of charged back items in excess of collected funds.
While the Company believes the maximum exposure is approximately $406,000, net
of tax, the actual loss to the Company cannot be determined at this time.
12
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The First National Bank of Cherokee (the "Bank") has been named in an
Adversary Proceeding related to the Issac LeaseCo Chapter 7 Bankruptcy,
(David W. Cranshaw, Chapter 7 Trustee for the Estate of Issac LeaseCo, Inc.
vs. Lewis C. Smith, First National Bank of Cherokee and Ford Motor Credit
Corporation, U.S. Bankruptcy Court, Northern District of Georgia, Case
Number 97-6034; Issac LeaseCo, Inc., Chapter 7 Bankruptcy Case Number A96-
79738-REV). In July of 1996, NationsBank, with whom Issac LeaseCo, Inc. had
a banking relationship, discovered that NationsBank had extended
substantial credit of drafts written by Issac LeaseCo, Inc. without funds
necessary to cover those drafts ("kiting" scheme). In August, 1996,
NationsBank put Issac LeaseCo. Inc. into involuntary Chapter 7 bankruptcy.
Issac LeaseCo, Inc. was an automobile wholesaler that did business with a
customer of the Bank, L.C. Smith Sales & Leasing. Inc. ("Sales & Leasing").
Among other lending to Sales & Leasing and its Principals, the Bank had a
secured floor plan lending arrangement for the financing of Sales & Leasing
automobile inventory. The Adversary Proceeding naming the Bank, together
with a related Adversary Proceeding (David W. Cranshaw, Chapter 7 Trustee
for the Estate of Issac LeaseCo, Inc. vs. LC Smith Sales & Leasing, Inc.
and James William Ballew, U.S. Bankruptcy Court, Northern District of
Georgia, Case Number 96-6734; Issac LeaseCo, Inc. Chapter 7 Bankruptcy Case
Number A96-79738-REV), claims that Issac LeaseCo, Inc. was defrauded by
Sales & Leasing and its Principals. The Bank was named in the litigation to
establish the relative lien rights on inventory supplied to Sales & Leasing
through various arrangements with Issac LeaseCo, Inc. The Trustee also
claims a constructive trust against all amounts received by the Bank from
Sales & Leasing or its Principals at any time since the discovery by
NationsBank of the Issac LeaseCo "kiting" scheme.
The Bank's Counsel continues to investigate the circumstances underlying
the litigation, including the application of bond coverage, and is unable
at this stage of the proceedings to assess the likely outcome of the
proceedings.
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 16, 1997.
(b) All of the Company's directors were elected to serve one
year terms until the annual meeting of shareholders in 1998.
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.
Name of Nominee Votes for Votes Withheld
--------------- --------- --------------
Alan D. Bobo 358,644 0
Elwin K. Bobo 358,644 0
Michael A. Edwards 358,644 0
13
<PAGE>
J. Stanley Fitts 358,644 0
Russell L. Flynn 358,644 0
Carl C. Hames, Jr. 358,644 0
C. Garry Haygood 358,644 0
Thomas D. Hopkins 358,644 0
Bobby R. Hubbard 358,644 0
Dennis M. Lord 358,644 0
Larry R. Lusk 358,644 0
Dr. Stuart R. Tasman 358,644 0
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:
Exhibit 11 Computation of Earnings Per Share
Exhibit 27 Financial Data Schedule (for SEC use only)
b. The Company has not filed any reports on Form 8-K during the
six months ended June 30, 1997.
Item 7. Signatures - attached
14
<PAGE>
Computation of Earnings Per Share
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30,
1997 1996
Primary earnings per share ---- ----
- --------------------------
<S> <C> <C>
Earnings: Net earnings $ 426,901 $ 311,312
Excess proceeds invested in U.S.
government securities @ 5.12% 0 19,724
--------- ---------
Net earnings available to common stock $ 426,901 $ 331,036
========= =========
Shares: Weighted average number of common
shares outstanding 578,934 551,804
Additional shares assuming conversion of:
Stock warrants 165,850 196,350
Stock options 27,331 24,531
Less 20% limitation (115,787) (110,361)
--------- ---------
Average common shares and equivalents outstanding 656,328 662,324
--------- ---------
Primary earnings per share $ 0.65 $ 0.50
========= =========
Fully diluted earnings per share
- --------------------------------
Earnings: Net earnings $ 426,901 $ 311,312
Excess proceeds invested in U.S.
government securities @ 5.12% 0 6,880
--------- ---------
Net earnings available to common stock $ 426,901 $ 318,192
--------- ---------
Shares: Weighted average number of common
shares outstanding 578,934 551,804
Additional shares assuming conversion of:
Stock warrants 165,850 196,350
Stock options 27,331 24,531
Less 20% limitation (115,787) (110,361)
--------- ---------
Average common shares and equivalents outstanding 656,328 662,324
--------- ---------
Fully diluted earnings per share $ 0.65 $ 0.48
========= =========
</TABLE>
15
<PAGE>
Computation of Earnings Per Share
---------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
June 30,
1997 1996
---- ----
Primary earnings per share
- --------------------------
<S> <C> <C>
Earnings: Net earnings $ 277,403 $ 132,813
Excess proceeds invested in U.S.
government securities @ 5.12% 0 19,724
--------- ---------
Net earnings available to common stock $ 277,403 $ 152,537
--------- ---------
Shares: Weighted average number of common
shares outstanding 575,526 551,804
Additional shares assuming conversion of:
Stock warrants 165,850 196,350
Stock options 27,331 24,531
Less 20% limitation (115,105) (110,361)
--------- ---------
Average common shares and equivalents outstanding 653,602 662,324
--------- ---------
Primary earnings per share $ 0.42 $ 0.23
========= =========
Fully diluted earnings per share
- --------------------------------
Earnings: Net earnings $ 277,403 $ 132,813
Excess proceeds invested in U.S.
government securities @ 5.12% 0 6,880
--------- ---------
Net earnings available to common stock $ 277,403 $ 139,693
--------- ---------
Shares: Weighted average number of common
shares outstanding 575,526 551,804
Additional shares assuming conversion of:
Stock warrants 165,850 196,350
Stock options 27,331 24,531
Less 20% limitation (115,105) (110,361)
--------- ---------
Average common shares and equivalents outstanding 653,602 662,324
--------- ---------
Fully diluted earnings per share $ 0.42 $ 0.21
========= =========
</TABLE>
16
<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 13, 1997 BY: /s/ Carl C. Hames, Jr.
--------------- ---------------------------
Carl C. Hames, Jr.
President & CEO/Principal
Executive Officer
DATE: August 13, 1997 BY: /s/ Kitty A. Kendrick
--------------- ---------------------------
Kitty A. Kendrick
Principal Financial Officer
17
<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 13, 1997 BY:
--------------- -----------------------------
Carl C. Hames, Jr.
President & CEO/Principal
Executive Officer
DATE: August 13, 1997 BY:
--------------- -----------------------------
Kitty A. Kendrick
Principal Financial Officer
18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,890,868
<INT-BEARING-DEPOSITS> 6,732,852
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
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<DEPOSITS> 77,233,748
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0
0
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</TABLE>
