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FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 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, GAINSVILLE, 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) ofthe Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes__x__ No____
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 MAY 1, 1996
Common Stock, $1.00 par value 533,239 shares
<PAGE>
LANIER BANKSHARES, INC. & SUBSIDIARIES
INDEX
Page No.
Part I. Financial Information
Consolidated Balance Sheet-March 31, 1996 3
Consolidated Statements of Income-Three Months Ended
March 31, 1996 and 1995 4
Consolidated Statements of Cash Flows-Three Months Ended
March 31, 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
Signatures 9
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
- 2 -
<PAGE>
<TABLE>
LANIER BANKSHARES, INC. & SUBSIDIARIES
<CAPTION>
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<S> <C>
ASSETS March 31, 1996
Cash and due from banks $3,958,625
Federal funds sold 2,400,000
Securities available for sale, at fair value 7,592,875
Securities held to maturity, at cost (fair value $8,671,788) 8,692,401
Loans 48,507,656
Less reserve for loan losses 654,461
Net loans 47,853,195
Premises & equipment, net 2,961,999
Other assets 2,025,528
___________
Total Assets $75,484,623
LIABILITIES & STOCKHOLDERS' EQUITY
Deposits:
Demand $9,838,236
Interest-bearing demand 10,413,164
Savings 7,442,536
Certificates of deposit 38,877,784
Total deposits $66,571,720
Obligations under capital lease 147,832
Other borrowings 700,000
Other liabilities 965,338
__________
Total liabilities $68,384,890
Stockholders' Equity
Common stock, $1.00 par, 10,000,000 shares authorized,
533,239 shares issued and outstanding $533,239
Surplus 4,799,151
Retained earnings 1,773,628
Unreal. losses on securities avail. for sale,net of taxes
(6,285)
___________
Total stockholders' equity $7,099,733
___________
$75,484,623
</TABLE>
- 3 -
<PAGE>
<TABLE>
LANIER BANKSHARES, INC. & SUBSIDIARIES
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months ended
March 31,
1996 1995
<S> <C> <C>
Interest income:
Interest & fees on loans $1,335,200 $1,082,728
Federal funds sold 39,426 10,909
Interest on nontaxable securities 50,342 50,363
Interest on taxable securities 164,865 144,412
__________ __________
$1,589,833 $1,288,412
Interest expense:
Interest on deposits $783,102 $606,337
Interest on other borrowings 11,792 8,035
________ _______
794,894 614,372
Net interest income before
provision for loan losses $794,939 $674,040
Provision for loan losses 30,000 30,000
________ ________
Net interest income $764,939 $644,040
Other income
Service charges on deposit accounts
and other income $118,700 $98,097
Other expense
Salaries & employee benefits $304,321 $258,394
Other operating expenses $249,503 $253,334
________ ________
$553,824 $511,728
Net income before applicable income taxes $329,815 $230,409
Applicable income taxes 101,718 65,000
________ --------
Net income $228,097 $165,409
-------- --------
Net income per share of common stock $0.43 $0.31
Dividends per share of common stock $0.00 $0.00
Average shares outstanding 533,239 526,217
</TABLE>
- 4 -
<PAGE>
<TABLE>
LANIER BANKSHARES, INC. & SUBSIDIARIES
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three months ended March 31,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $228,097 $165,409
-------- --------
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 48,472 43,709
Provision for loan losses 30,000 30,000
Decrease in interest receivable 61,150 37,737
Increase in interest payable 8,746 41,978
Other assets and liabilities, net (332,739) (1,147,745)
---------- -----------
Total adjustments ($184,371) ($994,321)
Net cash provided by (used in)
operating activities $43,726 ($828,912)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities avail. for sale ($1,250,625) $0
Proceeds from maturities of securities
available for sale 395,870 699,445
Purchases of securities held to maturity (3,790,185) 0
Proceeds from maturities of
securities held to maturity 2,080,592 0
Purchases of premises and equipment (2,831) (434,175)
Decrease (increase) in loans, net 1,271,464 (1,141,957)
(Increase) decrease in federal funds sold,net 600,000 (1,300,000)
Net cash used in investing activities ($695,715) ($2,176,687)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in deposits $1,621,958 $3,754,991
Proceeds from issuance of common stock 0 10,000
Increase in other borrowings, net 0 700,000
Decrease in Federal funds purchased 0 (1,500,000)
Repayment of capital lease obligation (7,947) 0
Cash dividends paid 0 (78,935)
Net cash provided by financing activities $1,614,011 $2,886,056
Net decrease in cash and due from banks $962,022
($119,543)
Cash and due from banks, beginning of period 2,996,603 2,805,230
Cash and due from banks, end of period $3,958,625 $2,685,687
Cash paid during the period for:
Interest $786,149 $572,394
Taxes $111,622 $82,862
NONCASH TRANSACTIONS
Unrealized gains(losses) on securities
available for sale ($46,874) $136,536
Principal balances of loan transferred
to other real estate $0 $612,989
- 5 -
</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 three months ended March 31, 1996 are not
necessarily indicative of the results to be expected for the full year.
Note 2. Other Borrowings
Other borrowings at March 31, 1996 consisted of advances from the Federal Home
Loan Bank. The advances mature in equal amounts on May 30, 1996 and
February 28, 2000, with interest at rates of 6.06% and 7.39%.
The advances were utilized to fund loans in
connection with the Community Reinvestment Act.
-6-
<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 the Company's financial position and operating
results during the periods included in
the accompanying consolidated financial statements.
Financial Condition
As of March 31, 1996, the Company experienced an increase in total
assets of $1,656,000 or 2.24%, as compared to December 31, 1995.
Total loans decreased $1,281,000 during this period or approximately 2.57%.
Deposits increased $1,622,000 or 2.50% during this period.
The increases in total assets and deposits are attributed to the normal
growth of the bank.
The decrease in loans is due to a pay out during the first quarter
of 1996 of approximately
2.2 million in loans secured by certificates of deposits.
Liquidity
As of March 31, 1996, the liquidity rate was 33.59%, which
management considers to be adequate 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 March 31, 1996, the Bank's capital ratios
exceeded the required ratios as
follows:
Regulatory
Actual Requirement
------ -----------
Leverage capital ratio 9.06% 4.00%
Risk based capital ratios:
Core capital 12.80% 4.00%
Total capital 14.03% 8.00%
- 7 -
<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 three months ended 3/31/96 increased 29.48% to
$795,000 over the $614,000 for the same period in 1995. Interest income for
the three month period increased $301,000 or
23.39%, while interest expense increased $181,000 or 29.38%.
The increase in interest income and expense is primarily due to the increase in
balance of loans and interest bearing deposits at March 31, 1996 as compared
to March 31, 1995.
Management made no changes to the provision for loan losses during the three
months ended March 31, 1996 as compared to the same period in 1995, which
which remained at $30,000. The loan loss reserve as a
percentage of total loans increased from 1.27% at December 31, 1995 to
1.35% at March 31, 1996. This increase was due to the decrease in loans
during the period. 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 $21,000 during the three month period ended
March 31,1996, as compared to 1995 and is the result of increases in
the service charges on deposit accounts.
Service charges on deposit accounts increased $20,000 during the three
month period ending March 31, 1996 as compared to 1995. The increase is
the result of the growth in demand deposits of approximately of $3,251,000
from March 31, 1995 to March 31, 1996.
Other operating expenses increased 8.23% or $42,000 for the period ending
March 31, 1996 as compared to the same period in 1995. The increase is
primarily attributable to an increase of $46,000 in salary and employee
benefits. The increase in salaries is the result of increases in
staff in connection with the Bank's growth. No other changes in other
operating expenses were material.
Income tax expense increased by $37,000 for the three month period ended
March 31, 1996 as compared to the same period in 1995. The effective
tax rate increased to 31% as compared to 28% for the same period.
Net income increased for the three month period ended March 31, 1996
by $63,000 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.
- 8 -
<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.
LANIER BANKSHARES, INC. & SUBSIDIARIES
Date: May 5, 1996 By:
Joseph D. Chipman, Jr.
President and Chief Executive Officer
(Principal Executive Officer)
Date: May 5, 1996 By:
Jeffrey D. Hunt
Senior Vice President, Operations
(Principal Financial and Accounting Officer)
- 9 -
LANIER BANKSHARES, INC. & SUBSIDIARIES
PART II - OTHER INFORMATION
Item 4 - Any matter submitted to the security holders for a vote.
No items were submitted to the shareholders for a vote during
the quarter ended March 31, 1996.
Item 6 - Exhibits and reports on Form 8-K.
(a) Exhibits.
None.
(a) Reports on Form 8-K.
None.
- 10 -
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 3,958,625
<INT-BEARING-DEPOSITS> 10,413,164
<FED-FUNDS-SOLD> 2,400,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 7,592,875
<INVESTMENTS-CARRYING> 8,692,401
<INVESTMENTS-MARKET> 8,671,788
<LOANS> 48,507,656
<ALLOWANCE> 654,461
<TOTAL-ASSETS> 75,484,623
<DEPOSITS> 66,571,720
<SHORT-TERM> 350,000
<LIABILITIES-OTHER> 1,113,170
<LONG-TERM> 350,000
0
0
<COMMON> 533,239
<OTHER-SE> 6,566,494
<TOTAL-LIABILITIES-AND-EQUITY> 75,484,623
<INTEREST-LOAN> 1,335,200
<INTEREST-INVEST> 254,633
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 1,589,833
<INTEREST-DEPOSIT> 783,102
<INTEREST-EXPENSE> 794,894
<INTEREST-INCOME-NET> 794,939
<LOAN-LOSSES> 30,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 553,824
<INCOME-PRETAX> 329,815
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 228,097
<EPS-PRIMARY> .43
<EPS-DILUTED> .43
<YIELD-ACTUAL> 4.71
<LOANS-NON> 141,000
<LOANS-PAST> 1,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 633,732
<CHARGE-OFFS> 9,387
<RECOVERIES> 116
<ALLOWANCE-CLOSE> 654,461
<ALLOWANCE-DOMESTIC> 30,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
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