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 June 30, 1997
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
(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 June 30, 1997
Common Stock, $1.00 par value 617,013 shares
LANIER BANKSHARES, INC. & SUBSIDIARIES
INDEX Page No.
Part I. Financial Information
Consolidated Balance Sheet-June 30, 1997 3
Consolidated Statements of Income-Three and Six
Months Ended June 30, 1997 and 1996 4
Consolidated Statements of Cash Flows-Six Months Ended
June 30, 1997 and 1996 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
- 2 -
LANIER BANKSHARES, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
June 30, 1997
Cash and due from banks $3,995,156
Securities available for sale at fair value 9,659,399
Securities held for investment at cost
(fair value $11,604,447) 11,147,504
Federal funds sold 2,700,000
Loans 55,050,885
Less reserve for loan losses 765,343
Net loans 54,285,542
Premises & equipment, net 3,056,105
Other assets 2,142,924
-----------
$86,986,630
===========
LIABILITIES & STOCKHOLDERS' EQUITY
Deposits:
Demand $11,715,865
Interest-bearing demand 13,503,110
Savings 8,495,886
Certificates of deposit 42,721,109
-----------
Total deposits $76,435,970
Obligations under captial lease 105,960
Other short-term borrowings 577,256
Other liabilities 909,354
-----------
Total liabilities $78,028,540
Stockholders' Equity
Common stock, $1.00 par, 10,000,000 shares authorized,
618,913 shares issued $618,913
Surplus 5,232,102
Retained earnings 3,123,536
Treasury stock (41,200)
Unrealized gains on securities available for sale, net of taxes 24,739
----------
Total stockholders' equity $8,958,090
$86,986,630
===========
- 3 -
LANIER BANKSHARES, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months ended
Six Months
ended
June 30, June 30,
1997 1996 1997 1996
Interest income:
Interest & fees on loans $1,481,745 $1,339,184 $2,873,898 $2,674,384
Interest on Federal funds sold 29,625 42,722 47,179 82,148
Interest on taxable securities 238,260 274,443 478,712 489,650
Interest on nontaxable securities 78,571 0 155,344 0
---------- ---------- --------- ----------
$1,828,201 $1,656,349 $3,555,133 $3,246,182
Interest expense:
Interest on deposits $840,367 $799,510 $1,638,664 $1,582,612
Interest on other borrowings 10,626 9,907 17,237 21,699
-------- -------- ---------- ---------
850,993 809,417 1,655,901 1,604,311
Net interest income before
provision for loan losses $977,208 $846,932 $1,899,232 $1,641,871
Provision for loan losses 30,000 30,000 60,000 60,000
-------- -------- ---------- ----------
Net interest income $947,208 $816,932 $1,839,232 $1,581,871
Other income
Service charges on deposit accounts
and other income $163,906 $122,940 $311,755 $241,639
Net realized gains of securities
available for sale 0 0 31 0
-------- -------- -------- --------
$163,906 $122,940 $311,786 $241,639
Other expense
Salaries & employee benefits $341,923 $306,437 $683,198 $610,758
Other operating expenses 292,229 248,671 543,005 498,174
-------- -------- -------- ---------
$634,152 $555,108 $1,226,203 $1,108,932
Net income before applicable
income taxes $476,962 $384,764 $924,815 $714,578
Applicable income taxes 154,625 121,404 279,317 223,122
-------- -------- -------- -------
Net income $322,337 $263,360 $645,498 $491,456
Net income per common and common
equivalent share $0.52 $0.45 $1.04 $0.84
Dividends per share of common stock $0.00 $0.00 $0.00 $0.00
Average common and common equivalent
shares outstanding 617,816 581,280 618,154 582,168
- 4 -
LANIER BANKSHARES, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six months ended June 30,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $645,498 $491,456
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 101,982 94,157
Provision for loan losses 60,000 60,000
Net realized gains on securities available
for sale (31) 0
Increase in interest receivable (40,383) (64,117)
Decrease in interest payable (93,513) (118,195)
Gain on sale of other real estate owned 0 (604)
Other assets and liabilities, net (171,100) (415,401)
---------- ---------
Total adjustments ($143,045) ($444,160)
Net cash provided by operating activities $502,453 $47,296
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities available for sale ($1,068,572) ($2,750,625)
Proceeds from sales of securities available
for sale 248,359 0
Proceeds from maturities of securities
available for sale 697,438 928,817
Purchases of securities held for investment (442,540) (6,010,185)
Proceeds from maturities of securities
held for investment 779,244 2,422,373
Purchases of premises and equipment (73,422) (6,935)
Proceeds from sale of other real estate owned 0 4,389
Increase in loans, net (3,767,019) (654,125)
(Increase) decrease in Federal funds
sold, net (900,000) 3,000,000
Net cash used in investing activities ($4,526,512) ($3,066,291)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in deposits $2,600,548 $4,076,457
Repayment of capital lease (17,186) (16,034)
Proceeds from issuance of common stock 0 13,000
Increase (decrease) in other borrowings,net 43,826 (350,000)
Purchase of treasury stock (41,200) 0
Net cash provided by financing activities $2,585,988 $3,723,423
Net increase (decrease) in cash and due
from banks ($1,438,071) $704,428
Cash and due from banks, beginning of
period 5,433,227 2,996,603
Cash and due from banks, end of period $3,995,156 $3,701,031
Cash paid during the period for:
Interest $1,749,414 $1,722,506
Taxes $263,300 $217,622
NONCASH TRANSACTIONS
Unrealized(gains) losses on securities
available for sale ($47,521) $162,133
- 5 -
LANIER BANKSHARES, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(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, 1997 are not
necessarily indicative of the results to be expected for the full year.
- 6 -
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 June 30, 1997, the Company experienced an increase in total assets
of 3.63%, as compared to December 31, 1996. The increase was primarily
the result of increased loan growth of $3.7 million or 7.34%. The increase
was funded by a growth in deposits of $2.6
million or 3.52%.
Liquidity
As of June 30, 1997, the liquidity ratio was 35.66%, 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 June 30, 1997, the Company's capital
ratios on a combined basis exceeded
the required ratios as follows:
Regulatory
Actual Requirement
Leverage capital ratio 9.62% 4.00%
Risk based capital ratios:
Core capital 14.56% 4.00%
Total capital 15.81% 8.00%
- 7 -
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, 1997 increased 15.68%
to $1,899,000 over the $1,642,000 for the same period in 1996. Interest
income for the six month period increased $309,000 or 9.52%, while interest
expense increased $52,000 or 3.22%. Net interest income for the three month
period ended June 30, 1997 increased $130,000 or 15.38% compared
to the three month period ended June 30, 1996. Interest income for the
three month period increased $172,000 or 10.38% and interest expense
increased $42,000 or 5.14% compared to
the same period in 1996. The increase in interest income and expense is
primarily due to the increase in the average balance of loans and interest
bearing deposits.
The provision for loan losses remained the same during the six months ended
June 30,1997 as compared to the same period in 1996. The loan loss reserve
as a percentage of total loans
increasesd from 1.38% at December 31, 1996 to 1.39% at June 30,1997. 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 $70,000 during the six month period ended
June 30, 1997, as compared to 1996. The most significant changes occurred
in NSF fees and service charges which increased $57,000 and $14,000,
respectively, compared to the same period in 1996. The increase
in NSF fees is primarily due to procedures implemented by the Bank to
reduce the number of reversals of NSF charges. The change in service
charges is due to a new charge on return items as well as an
increase in charges on business checking accounts.
Other operating expenses increased 10.58% or $117,000. The increase is
primarily attributable to an increase of $72,000 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 changes
in other operating expense were material.
Net income increased for the six month period ended June 30, 1997 by
$154,000 as compared to the same period in 1996. 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 $56,000 for the six months ended
June 30, 1997 as compared to the six month period ended June 30, 1996.
The effective tax rate decreased to 30% as compared
to 31% for the same period in 1996.
- 8 -
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: August 10, 1997
By: Joseph D. Chipmans
President and Chief Executive Officer
(Principal Executive Officer)
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.
The annual meeting of the shareholders of Lanier Bankshares, Inc. was held
on April 23, 1997. A total of 379,342 of the shares issued and outstanding
were presented for the meeting either by proxy or in person.
The shareholders voted and approved the election of Class I directors.
The results of the election are as follows:
Class I Directors
John W. Browning 379,342 - - - -
Joseph D. Chipman, Jr. 379,342 - - - -
C. Edmondson Daniel 379,342 - - - -
Item 6- Exhibits and reports on Form 8-K
(a) Exhibits.
27. Financial Data Schedule
(a) Reports on Form 8-K.
None.
- 10 -
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