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Previous: EXECUTIVE TELECARD LTD, 10-Q, 1998-11-16 |
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<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Mark One
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1998
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to __________
Commission File Number: 0-12498
Lanier Bankshares, Inc.
-----------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Georgia 58-1814713
--------------------------------- ---------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
854 Washington Street, Gainesville, Georgia 30503
---------------------------------------------------------
(Address of principal executive offices)
(770) 536-2265
-----------------------------------
(Issuer's telephone number)
N/A
------------------------------------------------------------------------------
(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 X No
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of November 1, 1998: 1,200,000; $1.00 par value.
Transitional Small Business Disclosure Format (Check One) Yes No X
--- ---
<PAGE>
LANIER BANKSHARES, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
INDEX
-----
Page No.
-------
PART I. FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheet - September 30, 1998 3
Consolidated Statements of Income and Comprehensive
Income - Three Months Ended September 30, 1998 and 1997
and Nine Months Ended September 30, 1998 and 1997 4
Consolidated Statements of Cash Flows - Nine
Months Ended September 30, 1998 and 1997 5 and 6
Notes to Consolidated Financial Statements 7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
PART II. OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders 16
Item 6 - Exhibits and Reports on Form 8-K 16
Signatures 17
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LANIER BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Assets
------
<S> <C>
Cash and due from banks $ 4,476,835
Interest-bearing deposits in banks 60,999
Securities available-for-sale, at fair value 10,010,060
Securities held-to-maturity (fair value $12,482,000) 12,211,110
Federal funds sold 3,300,000
Loans 74,618,044
Less allowance for loan losses 995,919
-------------------
Loans, net 73,622,125
-------------------
Premises and equipment 3,520,160
Other assets 3,063,347
-------------------
$ 110,264,626
===================
Liabilities and Stockholders' Equity
------------------------------------
Deposits
Noninterest-bearing demand $ 14,815,252
Interest-bearing demand 18,094,535
Savings 11,051,180
Time 53,016,593
-------------------
Total deposits 96,977,560
Obligation under capital lease 60,294
Other borrowings 1,462,870
Other liabilities 1,429,014
-------------------
Total liabilities 99,929,738
-------------------
Commitments and contingent liabilities
Stockholders' equity
Common stock, par value $1.00; 10,000,000 shares authorized;
1,237,826 shares issued 1,237,826
Capital surplus 5,230,107
Retained earnings 4,196,595
Treasury stock, 37,826 shares (419,024)
Accumulated other comprehensive income 89,384
-------------------
Total common stockholders' equity 10,334,888
-------------------
$ 110,264,826
===================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
LANIER BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 AND
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Month. Ended
September 30, September 30,
--------------------------- ----------------------------
1998 1997 1998 1997
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Interest income
Loans $ 2,013,888 $ 1,670,162 $ 5,826,744 $ 4,544,060
Taxable securities 171,562 216,948 484,956 595,860
Nontaxable securities 124,122 78,413 322,948 233,757
Federal funds sold 46,516 3,729 101,788 50,908
Deposits in banks 845 - 1,951 -
----------- ------------ ----------- -----------
Total interest income 2,356,933 1,969,252 6,738,287 5,524,385
----------- ------------ ----------- -----------
Interest expense
Deposits 1,100,689 895,910 3,080,569 2,534,574
Other borrowings 28,418 7,794 54,078 25,031
----------- ------------ ----------- -----------
Total Interest expense 1,129,107 903,704 3,134,647 2,559,605
----------- ------------ ----------- -----------
Net interest income 1,227,826 1,065,548 3,603,640 2,964,780
Provision for loan losses 90,000 50,000 210,000 110,000
----------- ------------ ----------- -----------
Net interest income after
provision for loan Losses 1,137,826 1,015,548 3,393,640 2,854,780
----------- ------------ ----------- -----------
Other Income
Service charges on deposit accounts 132,013 133,711 405,275 388,102
Other operating income 35,893 28,902 113,963 86,266
Gain on sale of securities available-for-sale - 6,056 - 6,087
----------- ------------ ----------- -----------
167,906 168,669 519,238 480,455
----------- ------------ ----------- -----------
Other expenses
Salaries end employee benefits 399,284 346,860 1,153,674 1,030,056
Equipment end occupancy expenses 111,201 100,049 311,844 311,321
Other operating expenses 183,159 163,210 531,887 494,943
----------- ------------ ----------- -----------
693,624 610,119 1,997,405 1,838,322
----------- ------------ ----------- -----------
Income before income taxes 612,108 574,098 1,915,473 1,498,913
Income tax expense 181,660 183,522 573,469 442,839
----------- ------------ ----------- -----------
Net income 430,448 410,576 1,342,004 1,056,074
----------- ------------ ----------- -----------
Other comprehensive income (loss):
Unrealized gains (losses) on securities
available-for-sale arising during period, net of tax 32,989 19,804 30,746 51,188
Less: reclassification adjustment for gains
included in net income, net of tax - (3,755) - (3,774)
----------- ------------ ----------- -----------
Total other comprehensive income 32,988 18,049 30,740 47,414
----------- ------------ ----------- -----------
Comprehensive Income $ 463,437 $ 426,625 $ 1,372,750 $ 1,103,488
=========== ============ =========== ===========
Basic earnings per common share $ 0.36 $ 0.33 $ 1.12 $ 0.86
=========== ============ =========== ===========
Diluted earnings par common share $ 0.35 $ 0.33 $ 1 .09 $ 0.84
=========== ============ =========== ===========
Cash dividends per share of common stock $ 0.14 $ 0.08 $ 0.14 $ 0.08
=========== ============ =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
LANIER BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 1,342,004 $ 1,056,074
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 137.780 149,656
Provision for loan losses 210,000 110,000
Net realized gains on securities available-for-sale - (6,087)
increase in interest receivable (91,096) (27,690)
Increase in interest payable 162,579 14,881
Other operating activities (372,779) (212,377)
------------ ------------
Net cash provided by operating activities 1,399,488 1,084,457
------------ ------------
INVESTING ACTIVITIES
Increase in interest-bearing deposits in banks (24,364) -
Purchases of securities available-for-sale (7,927,844) (2,136,112)
Proceeds from sales of securities available-for-sale - 699,319
Proceeds from maturities of securities available-for-sale 6,835,000 2,902,561
Purchases of securities held-to-maturity (5,448,039) (567,540)
Proceeds from maturities of securities held-to-maturity 2,130,000 2,076,172
Net (increase) decrease in Federal funds sold (3,100,000) 1,800,000
Net increase in loans 16,834,930) (14,521,627)
Purchase of premises and equipment (502,368) (90,853)
Payment of life insurance premiums (600,000) -
------------ ------------
Net cash used in investing activities (15,472,545) (9,838,080)
------------ ------------
FINANCING ACTIVITIES
Net increase in deposits 13,962,770 8,198,823
Repayment of obligations under capital lease (27,873) (26,005)
Net proceeds of other borrowings 737,903 300,545
Purchase of treasury stock (12,400) (434,560)
Proceeds from sale of treasury stock 6,000 19,941
Dividends paid (168,000) (92,552)
------------ ------------
Net cash provided by financing activities 14,498,400 7,966,192
------------ ------------
Net increase (decrease) in cash and due from banks 414,343 (787,431)
Cash and due from banks at beginning of period 4,062,492 5,433,227
------------ ------------
Cash and due from banks at end of period $ 4,476,835 $ 4,645,796
============ ============
</TABLE>
5
<PAGE>
LANIER BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
-------------- --------------
<S> <C> <C>
CASH FLOW INFORMATION
Cash paid during the period for;
Interest $ 2,972,068 $ 2,544,724
Income taxes $ 697,161 $ 422,100
NONCASH TRANSACTIONS
Unrealized (gains) on securities available-for-sale $ (46,595) $ (71,839)
</TABLE>
The accompanying notes are an Integral part of these consolidated financial
statements.
6
<PAGE>
LANIER BANKSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The consolidated 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 nine month period ended September
30, 1998 are not necessarily indicative of the results to be expected
for the full year.
NOTE 2. EARNINGS PER COMMON SHARE
The following is a reconciliation of net income (the numerator) and
weighted-average shares outstanding (the denominator) used in
determining basic and diluted earnings per common share (EPS):
<TABLE>
<CAPTION>
Three Months Ended September 30, 1998
--------------------------------------------------------
Net Weighted-Average
Income Shares Per share
(Numerator) (Denominator) Amount
-------------- ------------------ ------------
<S> <C> <C> <C>
Basic EPS $ 430,448 1,200,000 $ 0.36
=============
Effect of Dilutive Securities
Stock options - 30,948
-------------- ------------------
Diluted EPS $ 430,448 1,230,948 $ 0.35
============== ================== =============
<CAPTION>
Three Months Ended September 30, 1997
---------------------------------------------------------
Net Weighted-Average
Income Shares Per share
(Numerator) (Denominator) Amount
-------------- ------------------ -------------
<S> <C> <C> <C>
Basic EPS $ 410,576 1,226,120 $ 0.33
=============
Effect of Dilutive Securities
Stock options - 18,953
-------------- ------------------
Diluted EPS $ 410,576 1,245,073 $ 0.33
============== ================== =============
</TABLE>
7
<PAGE>
LANIER BANKSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 2. EARNINGS PER COMMON SHARE (Continued)
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1998
--------------------------------------------------------
Net Weighted-Average
Income Shares Per share
(Numerator) (Denominator) Amount
----------------- ------------------ -----------------
<S> <C> <C> <C>
Basic EPS $ 1,342,004 1,200,000 $ 1.12
=================
Effect of Dilutive Securities
Stock options - 27,447
----------------- ------------------
Diluted EPS $ 1,342,004 1,227,447 $ 1.09
================= ================== =================
<CAPTION>
Nine Months Ended September 30, 1997
--------------------------------------------------------
Net Weighted-Average
Income Shares Per share
(Numerator) (Denominator) Amount
----------------- ------------------ -----------------
<S> <C> <C> <C>
Basic EPS $ 1,056,074 1,232,921 $ 0.86
=================
Effect of Dilutive Securities
Stock options - 22,384
----------------- ------------------
Diluted EPS $ 1,056,074 1,255,305 $ 0.84
================= ================== =================
</TABLE>
Weighted-average shares for the periods ending September 30, 1997 have
been adjusted for a 1 for 1 common stock split declared in the first
quarter of 1998.
8
<PAGE>
LANIER BANKSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3. CURRENT ACCOUNTING DEVELOPMENTS
The adoption of the provisions of SFAS No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities" that became effective on January 1, 1998 did not have a
material effect on the Company's financial statements.
The adoption of SFAS No. 130, "Reporting Comprehensive Income", that
became effective on January 1, 1998 required the Company to report
comprehensive income in the Company's Statements of Income and
Comprehensive Income.
The Financial Accounting Standards Board has issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". SFAS
No. 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments imbedded in
other contracts and for hedging activities. It requires that all
derivatives be recognized as either assets or liabilities at fair
value. The accounting for changes in the fair value of derivative
instruments (gains and losses) depends on the intended use of the
derivative. Designated uses are fair value hedges, cash flow hedges,
and foreign currency hedges. The effective date of this statement is
for all fiscal quarters of fiscal years beginning after June 15, 1999.
The Company has not assessed the impact that this statement will have
on the financial statements.
There are no other recent accounting pronouncements that have had, or
are expected to have, a material effect on the Company's financial
statements.
9
<PAGE>
LANIER BANKSHARES, INC. AND SUBSIDIARIES
ITEM 2. 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 financial position and
operating results of the Company and its subsidiaries, Lanier National
Bank and Lanier Data Corporation during the periods included in the
accompanying consolidated financial statements.
Liquidity and Capital Resources
As of September 30, 1998, the liquidity ratio of the Bank, as
determined under guidelines established by regulatory authorities, was
satisfactory.
At September 30, 1998, the capital ratios of the Company and the Bank
were adequate based on regulatory minimum capital requirements. The
minimum capital requirements and the actual capital ratios for the
Company and the Bank are as follows:
Actual
------------------------
Lanier Lanier
Bankshares National Regulatory
Inc. Bank Requirement
------------ ---------- -----------
Leverage capital ratios 9.40% 9.21% 4.00%
Risk-based capital ratios:
Core capital 13.85 13.59 4.00
Total capital 15.10 14.84 8.00
10
<PAGE>
Financial Condition
Following is a summary of the Company's balance sheets for the periods
indicated:
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997 Increase (Decrease)
------------------ ------------------ --------------------------------------
(Dollars in Thousands) Amount Percent
---------------------------------------- --------------- -------------------
<S> <C> <C> <C> <C>
Cash and due from banks $ 4,477 $ 4,062 $ 415 10.22%
Interest-bearing deposits in banks 61 37 24 64.86
Securities 22,221 17,764 4,457 25.09
Federal funds sold 3,300 200 3,100 1,550.00
Loans, net 73,622 66,997 6,625 9.89
Premises and equipment 3,520 3,156 364 11.53
Other assets 3,063 2,256 807 35.77
------------------ ------------------ ---------------
$ 110,264 $ 94,472 $ 15,792 16.72
================== ================== ===============
Deposits $ 96,977 $ 83,015 $ 13,962 16.82%
Other borrowings 1,523 813 710 87.33
Other liabilities 1,429 1,507 (78) (5.18)
Stockholders' equity 10,335 9,137 1,198 13.11
------------------ ------------------ ---------------
$ 110,264 $ 94,472 $ 15,792 16.72
================== ================== ===============
</TABLE>
As indicated in the above table, the Company's total assets grew at a rate of
16.72%. Deposits grew at a rate of 16.82%. Coupled with increased other
borrowings, this growth funded loan growth of 9.89%. The excess funds were
invested in Federal funds sold and securities.
11
<PAGE>
Results of Operations For The Three Months Ended September 30, 1998 and 1997 and
for the Nine Months Ended September 30, 1998 and 1997
Following is a summary of the Company's operations for the periods indicated.
<TABLE>
<CAPTION>
Three Months Ended
September 30,
----------------------------------------
1998 1997 Increase (Decrease)
------------------ ------------------ --------------------------------------
(Dollars in Thousands) Amount Percent
---------------------------------------- ---------------- ------------------
<S> <C> <C> <C> <C>
Interest income $ 2,357 $ 1,969 $ 388 19.71%
Interest expense 1,129 904 225 24.89
Net interest income 1,228 1,065 163 15.31
Provision for loan losses 90 50 40 80.00
Other income 168 169 (1) (0.59)
Other expense 694 610 84 13.77
Pretax income 612 574 38 6.62
Income taxes 182 163 19 11.66
Net income 430 411 19 4.62
<CAPTION>
Nine Months Ended
September 30,
----------------------------------------
1998 1997 Increase (Decrease)
------------------ ------------------ --------------------------------------
(Dollars in Thousands) Amount Percent
---------------------------------------- ---------------- ------------------
<S> <C> <C> <C> <C>
Interest income $ 6,738 $ 5,524 $ 1,214 21.98%
Interest expense 3,134 2,559 575 22.47
Net interest income 3,604 2,965 639 21.55
Provision for loan losses 210 110 100 90.91
Other income 519 480 39 8.13
Other expense 1,997 1,836 161 8.77
Pretax income 1,916 1,499 417 27.82
Income taxes 574 443 131 29.57
Net income 1,342 1,056 286 27.08
</TABLE>
As indicated in the above tables, the Company's net interest income has
increased by $163,000 and $639,000 for the three and nine month periods in 1998
as compared to the same periods in 1997. The Company's net interest margin
increased to 5.15% during the first nine months of 1998 as compared to 5.07% for
the previous year. These increases are due primarily to increases in average
interest-earning assets.
12
<PAGE>
The provision for loan losses increased by $40,000 and $100,000 for the three
and nine month periods in 1998 as compared to the same periods in 1997. This
increase is due to net loan growth and increased net charge-offs of $51,000. The
Company's allowance for loan losses to total loans amounted to 1.34% at
September 30, 1998 as compared to 1.23% at December 31, 1997. The allowance for
loan losses is maintained at a level that is deemed appropriate by management to
adequately cover all known and inherent risks in the loan portfolio.
Management's evaluation of the loan portfolio includes a continuing review of
loan loss experience, current economic conditions which may affect the
borrower's ability to repay and the underlying collateral value. The Company had
no other real estate owned at September 30, 1998 or December 31, 1997.
Information with respect to nonaccrual, past due, and restructured loans at
September 30, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
September 30,
-------------------------------------
1998 1997
----------------- -----------------
(Dollars in Thousands)
-------------------------------------
<S> <C> <C>
Nonaccrual loans $ 190 $ 78
Loans contractually past due ninety days or more as to interest
or principal payments and still accruing 534 50
Restructured loans - -
Loans, now current about which there are serious doubts as to the
ability of the borrower to comply with loan repayment terms - -
Interest income that would have been recorded on nonaccrual
and restructured loans under original terms 13 7
Interest income that was recorded on nonaccrual and restructured loans - -
</TABLE>
It is the policy of the Bank to discontinue the accrual of interest income when,
in the opinion of management, collection of such interest becomes doubtful. This
status is accorded such interest when (1) there is a significant deterioration
in the financial condition of the borrower and full repayment of principal and
interest is not expected and (2) the principal or interest is more than ninety
days past due, unless the loan is both well-secured and in the process of
collection. The increase in loans contractually past due ninety days or more and
still accruing interest is due primarily to a real estate loan to a group of
family-related borrowers. Management believes that this loan does not meet
either of the criteria for discontinuance of interest accrual.
Loans classified for regulatory purposes as loss, doubtful, substandard, or
special mention that have not been included in the table above do not represent
or result from trends or uncertainties which management reasonably expects will
materially impact future operating results, liquidity or capital resources.
These classified loans do not represent material credits about which management
is aware of any information which causes management to have serious doubts as to
the ability of such borrowers to comply with the loan repayment terms.
13
<PAGE>
Information regarding certain loans and allowance for loan loss data through
September 30, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------------------------
1998 1997
----------------- -----------------
(Dollars in Thousands)
-------------------------------------
<S> <C> <C>
Average amount of loans outstanding $ 71,437 $ 55,501
================= =================
Balance of allowance for loan losses at beginning of period $ 837 $ 707
----------------- -----------------
Loans charged off
Commercial and financial $ 1 $ -
Real estate mortgage - 29
Instalment 54 5
----------------- -----------------
55 34
----------------- -----------------
Loans recovered
Commercial and financial - -
Real estate mortgage - -
Instalment 4 -
----------------- -----------------
4 -
----------------- -----------------
Net charge-offs (51) (34)
----------------- -----------------
Additions to allowance charged to operating expense during period 210 110
----------------- -----------------
Balance of allowance for loan losses at end of period $ 996 $ 783
================= =================
Ratio of net loans charged off during the period to
average loans outstanding .07% .06%
================= =================
</TABLE>
Other income was virtually unchanged for the third quarter in 1998 as compared
to the same period in 1997. For the nine month period, other income increased by
$39,000 due to increased service charges of $17,000 and other miscellaneous
revenues of $22,000.
Other expenses increased for the three and nine month periods in 1998 as
compared to the same periods in 1997 by $84,000 and $161,000. Increased salaries
and employee benefits of $52,000 and $124,000 accounted for the majority of the
increase.
The Company's provision for income taxes increased by $19,000 and $131,000 for
the three and nine month periods in 1998 as compared to the same periods in 1997
due to higher pre-tax income. The Company's effective tax rate increased to
29.9% for the first nine months of 1998 as compared to 29.5% for the first nine
months of 1997.
14
<PAGE>
Capability of Data Processing Software to Accommodate the Year 2000
- -------------------------------------------------------------------
The Company relies upon computers for the daily conduct of their business and
for data processing generally. There is concern among industry experts that
commencing on January 1, 2000, computers will be unable to "read" the new year
and that there may be widespread computer malfunctions.
The Company has conducted a comprehensive review of its computer systems,
programs, applications, and other electronic components used in the operations
of the Company to identify the areas that should be affected by the Year 2000
issue, and has developed a plan to identify non-compliant components. This is a
continuing process as testing will be performed throughout the remainder of 1998
and 1999. Based on the review of computer and other components, management does
not believe the cost of compliance will be material to the Company's financial
statements, although there can be no assurances in this regard. Management also
believes that the Company is in substantial compliance with regulatory timetable
requirements regarding the year 2000 issue. Because the Company's data
processing subsidiary, Lanier Data Corporation, processes only for the Bank,
there is no additional Year 2000 risk associated with the providing of data
processing services to outside customers. The Company has developed contingency
plans for its mission-critical systems. In the event that compliance efforts are
not effective, there could be a material negative impact upon the Company's
liquidity, capital resources, and results of operations.
The Company is not aware of any known trends, events or uncertainties, other
than the effect of events as described above, that will have or that are
reasonably likely to have a material effect on its liquidity, capital resources
or operations. The Company is also not aware of any current recommendations by
the regulatory authorities which, if they were implemented, would have such an
effect.
15
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
None
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.
LANIER BANKSHARES, INC.
BY: /s/ Joseph D. Chipman, Jr.
---------------------------------------
Joseph D. Chipman, Jr. President
and Chief Executive Officer
(Principal Executive Officer)
BY: /s/ Jeffrey D. Hunt
---------------------------------------
Jeffrey D. Hunt, Senior Vice
President, Operations (Principal
Financial and Accounting Officer)
DATE: November 13, 1998
-------------------------------------
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 4,476,835
<INT-BEARING-DEPOSITS> 60,999
<FED-FUNDS-SOLD> 3,300,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 10,010,060
<INVESTMENTS-CARRYING> 12,211,110
<INVESTMENTS-MARKET> 12,482,000
<LOANS> 74,618,044
<ALLOWANCE> 995,919
<TOTAL-ASSETS> 110,264,626
<DEPOSITS> 96,977,560
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,429,014
<LONG-TERM> 1,469,164
0
0
<COMMON> 1,237,826
<OTHER-SE> 9,097,062
<TOTAL-LIABILITIES-AND-EQUITY> 10,334,888
<INTEREST-LOAN> 5,826,744
<INTEREST-INVEST> 807,904
<INTEREST-OTHER> 103,639
<INTEREST-TOTAL> 6,738,287
<INTEREST-DEPOSIT> 3,080,569
<INTEREST-EXPENSE> 3,134,647
<INTEREST-INCOME-NET> 3,603,640
<LOAN-LOSSES> 210,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,997,405
<INCOME-PRETAX> 1,915,473
<INCOME-PRE-EXTRAORDINARY> 1,915,473
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,342,004
<EPS-PRIMARY> 1.12
<EPS-DILUTED> 1.09
<YIELD-ACTUAL> 5.15
<LOANS-NON> 190,000
<LOANS-PAST> 534,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 837,000
<CHARGE-OFFS> 55,000
<RECOVERIES> 4,000
<ALLOWANCE-CLOSE> 996,000
<ALLOWANCE-DOMESTIC> 996,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
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