FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from ________ to ________
Commission file number 33-25402-A
LANIER BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
GEORGIA 58-1814713
State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Indentification No.)
854 WASHINGTON STREET, GAINESVILLE, GEORGIA 30501
(Address of Principal Executive Offices) (Zip Code)
(770) 536-2265
(Issuer's Telephone Number, Including Area Code)
(Former name, former address and former fiscal year,
if changed since last report)
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. Yes____ No____
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest most practicable date:
CLASS OUTSTANDING AT August 1, 1996
Common Stock, $1.00 par value 534,539 shares
<PAGE>
LANIER BANKSHARES, INC. & SUBSIDIARIES
INDEX
Page No.
Part I. Financial Information
Consolidated Balance Sheet-June 30, 1996 3
Consolidated Statements of Income-Three and Six Months Ended
June 30, 1996 and 1995 4
Consolidated Statements of Cash Flows-Six Months Ended
June 30, 1996 and 1995 5
Notes To Consolidated Financial Statements 6
Management's Discussion and Analysis of Financial Condition
and Results of Operations 7 and 8
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
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<TABLE>
LANIER BANKSHARES, INC. & SUBSIDIARIES
<CAPTION>
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<S> <C>
ASSETS June 30, 1996
Cash and due from banks $ 3,701,031
Securities available for sale at fair value 8,444,669
Securities held for investment at cost( fair
value $10,330,485) 10,570,557
Federal funds sold 0
Loans 50,424,186
Less reserve for loan losses 675,402
Net loans 49,748,784
Premises & equipment, net 2,927,582
Other assets 2,179,104
___________
Total Assets $77,571,727
-----------
LIABILITIES & STOCKHOLDERS' EQUITY
Deposits:
Demand $10,272,895
Interest-bearing demand 11,597,064
Savings 7,454,653
Certificates of deposit 39,701,607
Total deposits $69,026,219
Obligations under captial lease 139,745
Other short-term borrowings 350,000
Other liabilities 762,998
___________
Total liabilities $70,278,962
Stockholders' Equity
Common stock, $1.00 par, 10,000,000 shares
authorized, 534,539 shares issued and
outstanding 534,539
Surplus 4,810,851
Retained earnings 2,036,987
Unrealized losses on securities available
for sale, net of taxes (89,612)
__________
Total stockholders' equity $7,292,765
----------
Total Liabil and Equity $77,571,727
-----------
</TABLE>
(3)
<PAGE>
<TABLE>
LANIER BANKSHARES, INC. & SUBSIDIARIES
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months ended Six Months ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest income:
Interest & fees on loans $1,339,184 $1,186,083 $2,674,384 $2,268,811
Interest on Fed funds sold 42,722 30,260 82,148 41,169
Interest on taxable secur 274,443 186,731 489,650 381,506
---------- ---------- ---------- ----------
$1,656,349 $1,403,074 $3,246,182 $2,691,486
Other Income
Interest on deposits $799,510 $695,460 $1,582,612 $1,301,797
Interest on oth borrowings 9,907 11,869 21,699 19,904
---------- ---------- ----------
- ----------
809,417 707,329 1,604,311 1,321,701
Net interest income before
provision for loan losses $846,932 $695,745 $1,641,871 $1,369,785
Provision for loan losses 30,000 30,000 60,000 60,000
---------- ---------- ---------- ----------
Net interest income $816,932 $665,745 $1,581,871 $1,309,785
Other income
Service chrgs on dep
accts and oth inc $122,940 $117,135 $241,639 $215,232
Net realized gains of
securities avail for sale 0 2,664 0 2,664
-------- -------- -------- --------
$122,940 $119,799 $241,639 $217,896
Other expense
Salaries & empl benefits $306,437 $264,567 $610,758 $522,961
Other operating expenses 248,671 255,039 498,174 508,373
-------- -------- ----------
- ----------
$555,108 $519,606 $1,108,932 $1,031,334
Net income before applic
income taxes $384,764 $265,938 $714,578 $496,347
Applicable income taxes 121,404 75,000 223,122 140,000
-------- -------- --------
- --------
Net income $263,360 $190,938 $491,456 $356,347
======== ======== ========
========
Net income per common and
common equivalent share $0.45 $0.34 $0.84 $0.63
Dividends per share of
common stock $0.00 $0.00 $0.00 $0.00
Average common and common
equiv shares outstanding 581,280 526,239 582,168 526,228
</TABLE>
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<TABLE>
LANIER BANKSHARES, INC. & SUBSIDIARIES
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six months ended June 30,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $491,456 $356,347
Adjust to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 94,157 88,842
Provision for loan losses 60,000 60,000
Net realized gains on securities
available for sale 0 (2,664)
Increase in interest receivable (64,117) (40,731)
Increase (decrease) in interest payable (118,195) 125,703
Gain on sale of other real estate owned (604) 0
Other assets and liabilities, net (415,401) (208,181)
----------- ---------
Total adjustments ($444,160) $22,969
----------- ---------
Net cash provided by operating activities $47,296 $379,316
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities avail for sale ($2,750,625) $0
Proceeds from sales of securities
available for sale 0 502,664
Proceeds from maturities of securities
available for sale 928,817 213,489
Purchases of secur held for investment (6,010,185) (500,000)
Proceeds from maturities of securities
held for investment 2,422,373 166,404
Purchases of premises and equipment (6,935) (360,708)
Proceeds from sale of oth R/E Owned 4,389 0
Increase in loans, net (654,125) (4,133,657)
Purchase of cash value of life insurace 0 (1,000,000)
(Incr) decr in Fed funds sold, net 3,000,000 (200,000)
------------ -----------
Net cash used in investing activities ($3,066,291) ($5,311,808)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in deposits $4,076,457 $7,560,090
Repayment of capital lease (16,034) (10,673)
Proceeds from issuance of common stock 13,000 10,000
Incr (decr) in other borrowings, net (350,000) 700,000
Decrease in Federal funds purchased, net 0 (1,500,000)
Cash dividends paid 0 (78,935)
---------- -----------
Net cash provided by financing activities $3,723,423 $6,680,482
Net incr (decr) in cash and due from banks $704,428 $1,747,990
Cash and due from banks, beg of period 2,996,603 2,805,230
Cash and due from banks, end of period $3,701,031 $4,553,220
---------- ----------
Cash paid during the period for:
Interest $1,722,506 $1,196,818
Taxes $217,622 $211,462
NONCASH TRANSACTIONS
Unreal losses on securities avail for sale $162,133 $318,867
Prin bal of loan trans to oth real estate $0 $679,000
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</TABLE>
<PAGE>
LANIER BANKSHARES, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation
The financial information included herein 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.
The results of operations for the six months ended June 30, 1996 are not
necessarily indicative of the results to be expected for the full year.
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<PAGE>
LANIER BANKSHARES, INC. & 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 company's financial position
and operating results during the periods included in
the accompanying consolidated financial statements.
Financial Condition
As of June 30, 1996, the Company experienced an increase in
total assets of 5.07%, as compared to December 31, 1995.
Total loans increased $636,000 during this period or
approximately 1.28%. Deposits increased $4,076,000 or 6.28%
during this period. The increase in total assets, loans and
deposits are attributed to the improvement in the
stability of the local economy and the normal growth of the bank.
Liquidity
As of June 30, 1996, the liquidity rate was 32.68%, which management
considers to be to meet the Company's funding needs. Liquidity is
measured by the ratio of net cash, short term and marketable securities
to net deposits and short-term liabilities.
Capital
Banking regulations require the banks and bank holding companies
to maintain minimum capital ratios to assets. At June 30, 1996,
the Company's capital ratios on a combined basis exceeded
the required ratios as follows:
Regulatory
Actual Requirement
Leverage capital ratio 9.22% 4.00%
Risk based capital ratios:
Core capital 12.94% 4.00%
Total capital 14.18% 8.00%
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<PAGE>
LANIER BANKSHARES, INC. & SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net interest income for the six months ended June 30, 1996
increased 19.85% to $1,642,000 over the $1,370,000 for the
same period in 1995. Interest income for the six month period
increased $555,000 or 20.61%, while interest expense increased
$283,000 or 21.38%. Net interest income for the three month period
ended June 30, 1996 increased $151,000 or 21.73% compared
to the three month period ended June 30, 1995. Interest income
for the three month period increased $253,000 or 18.05% and
interest expense increased $102,000 or 14.43% compared to
the same period in 1995. The increase in interest income and expense
is primarily due to the increase in balance of loans and interest
bearing deposits as well as the effect of an increase in
interest rates.
The provision for loan losses remained the same during the six
months ended June 30,1996 as compared to the same period in 1995.
The loan loss reserve as a percentage of total loans
increasesd from 1.27% at December 31, 1995 to 1.34% at June 30,1996.
Based on management's assessment of the economic environment and
prior charge-off and collection history, the reserve
for loan losses is considered adequate to meet future losses
inherent in the portfolio.
Total other income increased $24,000 during the six month period
ended June 30, 1996, as compared to 1995. The most significant change
occurred in NSF charges which increased from $ 103,000 as of
June 30, 1995 to $134,000 for the same period in 1996. This
increase is primarily due to new procedures implemented by the
Bank to reduce the number of reversals of NSF charges. No other
changes in other operating income were material.
Other operating expenses increased 7.52% or $78,000. The increase
is primarily attributable to an
increase of $88,000 in salary and employee benefits. The increase
in salaries was the result of increases in staff in connection
with the Bank's growth. No other other operating
expenses were material.
Net income increased for the six month period ended June 30, 1996
by $135,000 as compared to the same period in 1995. The subsidiary
bank continues to experience growth, which has
enabled the Company to increase earnings.
This trend is expected to continue.
Income tax expense increased by $83,000 for the six months ended
June 30, 1996 as compared to the six month period ended June 30, 1995.
The effective rate increased to 31% as compared
to 28% for the same period in 1995.
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<PAGE>
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.
LANIER BANKSHARES, INC. & SUBSIDIARIES
Date: August 12, 1996
By:
Joseph D. Chipman, Jr.
President and Chief Executive Officer
(Principal Executive Officer)
By:
Jeffrey D. Hunt
Senior Vice President, Operations
(Principal Financial and Accounting Officer)
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<PAGE>
LANIER BANKSHARES, INC. & SUBSIDIARIES
PART II - OTHER INFORMATION
Item 4 - Any matter submitted to the security holders for a vote.
The annual meeting of the shareholders of Lanier Bankshares, Inc.
was held on April 17, 1996. A total of 317,656 of the shares
issued and outstanding registered
for the meeting either by proxy or in person.
The shareholders voted and approved
the election of Class III directors. The results
of the election are as follows:
For Against Abstained
Class III Directors
Lewis W. Coker 317,656 - - - -
Carlton W. Rogers, Sr. 317,656 - - - -
Stewart Teaver 317,656 - - - -
Michael Wilson 317,656 - - - -
Item 6 - Exhibits and reports on Form 8-K.
(a) Exhibits.
None.
(a) Reports on Form 8-K.
None.
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<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,701,031
<INT-BEARING-DEPOSITS> 98,000
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 8,444,669
<INVESTMENTS-CARRYING> 10,570,557
<INVESTMENTS-MARKET> 10,330,485
<LOANS> 50,424,186
<ALLOWANCE> 675,402
<TOTAL-ASSETS> 77,571,727
<DEPOSITS> 69,026,219
<SHORT-TERM> 350,000
<LIABILITIES-OTHER> 762,998
<LONG-TERM> 0
0
0
<COMMON> 534,539
<OTHER-SE> 6,758,226
<TOTAL-LIABILITIES-AND-EQUITY> 77,571,727
<INTEREST-LOAN> 2,674,384
<INTEREST-INVEST> 489,650
<INTEREST-OTHER> 82,148
<INTEREST-TOTAL> 3,246,182
<INTEREST-DEPOSIT> 1,582,612
<INTEREST-EXPENSE> 1,604,311
<INTEREST-INCOME-NET> 1,641,871
<LOAN-LOSSES> 60,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,108,932
<INCOME-PRETAX> 714,578
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 491,456
<EPS-PRIMARY> .84
<EPS-DILUTED> .84
<YIELD-ACTUAL> 9.28
<LOANS-NON> 174,000
<LOANS-PAST> 162,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 633,732
<CHARGE-OFFS> 19,832
<RECOVERIES> 1,501
<ALLOWANCE-CLOSE> 675,401
<ALLOWANCE-DOMESTIC> 60,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
