<PAGE>
1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE PERIOD ENDED JUNE 30, 1998
Commission File Number: 33-28514-A
----------
BRYAN BANCORP OF GEORGIA, INC.
-------------------------------------------------------------------------------
(exact name of small business issuer as specified in its charter)
GEORGIA 58-1835646
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9971 Ford Avenue, Richmond Hill, Georgia 31324
- ---------------------------------------- ------------------------------------
(Address of principal executive offices) (Zip code)
(912) 756-4444
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(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name,former address and former fiscal year,if changed since last report)
Check whether the registrant (1) filed all reports to be filed by section 13 or
15(d) of the Securities Exchange Act of 1934 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 CORPORATE ISSUERS
State the number of shares outstanding of each issuer's classes of common stock,
as of the latest practicable date:
Common Stock, $1.00 Par Value - 506,508 shares as of July 20, 1998
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Transitional Small Business Disclosure Format:
Yes No X
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Page 1 of 11 Pages
Exhibit Index - Not Applicable
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2
INDEX
BRYAN BANCORP OF GEORGIA, INC. AND SUBSIDIARY
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheet - June 30, 1998
Consolidated Statements of Income and Comprehensive Income - Three
Months Ended June 30, 1998 and 1997; Six Months Ended June 30, 1998
and 1997
Consolidated Statements of Cash Flows - Three Months Ended June 30,
1998 and 1997; Six Months Ended June 30, 1998 and 1997
Notes to Consolidated Financial Statements - June 30, 1998
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
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3
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
- ----------------------------
BRYAN BANCORP OF GEORGIA, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET - (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, 1998
---------------
ASSETS
<S> <C>
Cash and due from banks $ 2,601,757
Federal funds sold 2,940,000
Investment securities available for sale 8,024,509
Investment securities held to maturity (estimated market
value of $3,976,465) 3,863,065
Loans 52,186,271
Less allowance for loan losses (586,106)
---------------
Loans, net 51,600,165
Interest receivable 520,116
Premises and equipment, net 1,197,936
Other assets 295,073
---------------
Total assets $ 71,042,621
===============
LIABILITIES
Deposits:
Noninterest-bearing $ 10,242,778
Interest-bearing 49,265,004
---------------
Total deposits 59,507,782
Federal Home Loan Bank advances 3,532,500
Other borrowed funds 100,000
Interest payable 176,310
Other liabilities 106,427
---------------
Total liabilities 63,423,019
---------------
SHAREHOLDERS' EQUITY
Common stock - par value $1 per share;
authorized 10,000,000 shares;
issued 532,258 shares 532,258
Additional paid-in capital 5,052,465
Retained earnings 2,557,570
Accumulated other comprehensive income (loss) (1,341)
---------------
8,140,952
Less 25,750 shares of treasury stock- at cost (521,350)
---------------
Total shareholders' equity 7,619,602
---------------
Total liabilities and shareholders' equity $ 71,042,621
===============
</TABLE>
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4
BRYAN BANCORP OF GEORGIA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------------------------
1998 1997 1998 1997
---------- ----------- ----------- -----------
INTEREST INCOME:
<S> <C> <C> <C> <C>
Loans $ 1,304,809 $ 1,186,850 $ 2,555,716 $ 2,307,171
Investment securities:
Taxable 133,931 108,828 273,462 199,449
Tax-exempt 45,703 38,936 86,082 77,622
Federal funds sold 39,497 16,332 63,643 45,371
Deposits in other banks 8,451 538 18,372 709
----------- ----------- ----------- -----------
Total interest income 1,532,391 1,351,484 2,997,275 2,630,322
----------- ----------- ----------- -----------
INTEREST EXPENSE:
Deposits 581,838 517,616 1,156,282 1,019,270
Federal Home Loan Bank advances 54,164 12,185 92,918 19,041
Other borrowed funds 3,516 1,617 9,545 2,548
----------- ----------- ----------- -----------
639,518 531,418 1,258,745 1,040,859
----------- ----------- ----------- -----------
NET INTEREST INCOME 892,873 820,066 1,738,530 1,589,463
----------- ----------- ----------- -----------
PROVISION FOR LOAN LOSSES 45,000 45,000 90,000 90,000
----------- ----------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 847,873 775,066 1,648,530 1,499,463
NONINTEREST INCOME:
Service charges on deposit accounts 76,120 85,356 155,129 178,816
Loan servicing fees 63,369 27,715 123,129 45,568
Other service charges and fees 34,014 25,687 60,077 51,007
Net realized gain (loss) on sales of available
for sale securities 1,158 1,158 (675)
Gain on sale of property 57,401
Other 35,332 36,731 70,838 86,986
----------- ----------- ----------- -----------
209,993 175,489 467,732 361,702
----------- ----------- ----------- -----------
NONINTEREST EXPENSES:
Salaries and employee benefits 346,541 284,822 687,993 567,883
Occupancy 24,000 23,652 44,848 45,839
Equipment and processing expense 55,736 45,103 111,051 90,927
Other 157,880 143,114 353,127 313,568
----------- ----------- ----------- -----------
584,157 496,691 1,197,019 1,018,217
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 473,709 453,864 919,243 842,948
PROVISION FOR INCOME TAXES 162,700 163,090 299,300 280,650
----------- ----------- ----------- -----------
NET INCOME 311,009 290,774 619,943 562,298
----------- ----------- ----------- -----------
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses)
arising during the period (42) 31,092 5,763 9,767
Less reclassification adjustment for
(gains) losses included in net income (695) (695) 405
----------- ----------- ----------- -----------
Other comprehensive income (loss) (737) 31,092 5,068 10,172
----------- ----------- ----------- -----------
COMPREHENSIVE INCOME $ 310,272 $ 321,866 $ 625,011 $ 572,470
=========== =========== =========== ===========
Basic earnings per share $ 0.62 $ 0.58 $ 1.23 $ 1.11
=========== =========== =========== ===========
Diluted earnings per share $ 0.60 $ 0.56 $ 1.20 $ 1.08
=========== =========== =========== ===========
</TABLE>
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5
BRYAN BANCORP OF GEORGIA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------------
1998 1997
----------- -----------
OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 619,943 $ 562,298
Adjustments to reconcile net income
to cash provided by operating activities:
Depreciation 65,559 59,657
Amortization and accretion, net 2,064 1,765
Provision for loan losses 90,000 90,000
Gain on sale of property (57,401)
Net realized (gain) loss on available for sale securities (1,158) 675
Changes in:
Interest receivable (67,854) (67,236)
Other assets (63,827) 67,790
Interest payable (33,980) (14,663)
Other liabilities (21,998) 69,061
----------- ------------
Net cash provided by operating activities 531,348 769,347
----------- ------------
INVESTING ACTIVITIES:
Net decrease in time deposits in other banks 990,000
Net (increase) decrease in federal funds sold (2,902,000) 5,280,000
Proceeds from sale of investment securities:
Available for sale securities 1,107,750 199,250
Proceeds from maturities of investment securities:
Available for sale securities 2,881,487 1,268,290
Purchase of investment securities:
Available for sale securities (2,702,109) (3,448,203)
Held to maturity securities (515,900) (223,500)
Net increase in loans (4,076,543) (3,628,403)
Proceeds from sale of property 358,896
Additions to premises and equipment (71,327) (39,902)
----------- ------------
Net cash used for investing activities (4,929,746) (592,468)
----------- ------------
FINANCING ACTIVITIES:
Net increase in deposits 3,527,697 152,618
Federal Home Loan Bank advance proceeds 2,000,000 150,000
Repayment of Federal Home Loan Bank advances (57,500) (170,000)
Net increase (decrease) in other borrowings (30,000) 460,449
Dividends paid (506,508) (428,704)
Exercise of stock options 39,720
Acquisition of treasury stock (12,500) (4,000)
----------- ------------
Net cash provided by financing activities 4,960,909 160,363
----------- ------------
Increase in cash and cash equivalents 562,511 337,242
Cash and cash equivalents - beginning 2,039,246 2,296,408
----------- ------------
Cash and cash equivalents - ending $ 2,601,757 $ 2,633,650
=========== ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes $ 255,500 $ 244,199
=========== ============
Interest $ 1,292,725 $ 1,055,522
=========== ============
</TABLE>
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6
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements of Bryan Bancorp of
Georgia, Inc. and subsidiary have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions to form 10-QSB. Accordingly, they
do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the six month
period ended June 30, 1998 are not necessarily indicative of the
results that may be expected for the year ended December 31, 1998. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on form
10-KSB for the year ended December 31, 1997.
Certain amounts in the consolidated financial statements for the six
month and three month periods ended June 30, 1997 have been
reclassified to conform to the six month and three month periods ended
June 30, 1998 presentation.
NOTE 2 - EARNINGS PER SHARE
Earnings per share has been calculated in accordance with the
provisions of Statement of Financial Accounting Standards (SFAS) No.
128 "Earnings Per Share" issued by the Financial Accounting Standards
Board. SFAS No. 128 requires presentation of earnings per share on a
basic computation and a diluted computation. The basic computation
divides net income by only the weighted average number of common shares
outstanding for the year and the diluted computation gives effect to
all diluted common shares that were outstanding during the year.
Earnings per share amounts for the six month and three month periods
ended June 30, 1997 have been restated to give effect to the
application of this new standard.
The following data shows the amounts used in computing earnings per
share and the effect on income and the weighted average number of
shares of dilutive potential common stock.
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------------------------------------
1998 1997 1998 1997
---------- --------- --------- ----------
Income available to common shareholders:
<S> <C> <C> <C> <C>
Used in basic earnings per share $ 311,009 $ 290,774 $ 619,943 $ 562,298
========= ========= ========= =========
Used in diluted earnings per share $ 311,009 $ 290,774 $ 619,943 $ 562,298
========= ========= ========= =========
Weighted average number of common
shares used in basic earnings per share 502,525 504,419 502,525 504,419
Effect of dilutive securities:
Stock options 15,543 15,702 15,543 15,702
--------- --------- --------- ---------
Weighted average number of common
and dilutive potential common shares
used in diluted earnings per share 518,068 520,121 518,068 520,121
========= ========= ========= =========
</TABLE>
<PAGE>
7
NOTE 3 - ACCOUNTING CHANGE
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income". This
statement establishes standards for reporting and display of
comprehensive income and its components in the financial statements.
Comprehensive income is defined as the change in equity of a business
enterprise during the period from transactions and other events and
circumstances from nonowner sources.
NOTE 4 - MERGER
On February 10, 1998, the Company signed a definitive agreement to
merge with The Savannah Bancorp, Inc., a bank holding company that owns
The Savannah Bank located in Savannah, Georgia. This merger would
result in The Savannah Bancorp, Inc. acquiring all of the Company's
outstanding stock in a business combination accounted for as a pooling
of interest. Upon consummation of this merger, which is subject to
regulatory and shareholder approvals, shareholders of the Company would
receive 1.85 shares of stock in The Savannah Bancorp, Inc. in exchange
for each share of the Company's stock.
<PAGE>
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations
-------------
Liquidity and Capital Resources
The goal of liquidity management is to ensure the availability of adequate funds
to meet the loan demand and the deposit withdrawal needs of the Bank's
customers. This is achieved through maintaining a combination of sufficient
liquid assets, core deposit growth, and unused capacity to purchase funds in the
money markets. With ample funds for lending being supplied primarily by core
deposit growth, the company has considerable liquidity and funding flexibility.
The Company meets most of its daily liquidity needs through the management of
cash and federal funds sold. The Company continues in a liquid position at June
30, 1998, with $2.9 million invested in daily federal funds sold and $2.6
million in cash and due from banks. The Company's cash and cash equivalents plus
federal funds sold increased by approximately $3.5 million at June 30, 1998
compared to December 31, 1997. This increase was due primarily from matured
certificate of deposits with other banks of approximately $1.0 million; increase
in borrowings from the Federal Home Loan Bank of approximately $1.9 million and
a decrease in investment securities of approximately $.8 million.
Management monitors the company's asset and liability positions in order to
maintain a balance between rate sensitive assets and rate sensitive liabilities
and, at the same time, maintain sufficient liquid assets to meet expected
customer needs for loans and for withdrawal of deposits.
The Company has the ability on a short-term basis to borrow funds from other
financial institutions. In addition to a credit line with the Federal Home Loan
bank which allows advances up to seventy-five percent of the book value of
one-to-four family first mortgage loans, the Company has federal funds line of
credit arrangements aggregating $4 million. As of June 30, 1998, the Company had
borrowed approximately $3.5 million on its credit line with the Federal Home
Loan Bank.
There are no trends, demands, commitments, events or uncertainties that will
result in or are reasonably likely to result in the Company's liquidity
increasing or decreasing in any material way.
The Company's total assets increased from $65.5 million at December 31, 1997 to
$71 million at June 30, 1998, representing an increase of $5.5 million or 8.4%.
Loans increased $4 million or 8.3% during the first six months of 1998 and
deposits increased $3.5 million or 6.3%.
Shareholders' equity at June 30, 1998 was $7.6 million or 10.7% of total assets.
The Company paid a cash dividend of $1.00 per share during the first six months
of 1998. The company also repurchased 500 shares of its own common stock during
the first six months of 1998 at a cost of $25 per share. There were 4,000 stock
options exercised during the first six months at a price of $9.93 per share.
Management anticipates that capital will be adequate to sustain the Company's
anticipated 1998 growth.
<PAGE>
9
The Company's capital is in excess of the applicable regulatory requirements. At
June 30, 1998 the Company's leverage ratio was 10.68% and its tier 1 and total
risk-based capital ratios were 13.89% and 14.98%, respectively.
Results of Operations
Net interest income increased in the second quarter of 1998 by $72,800 or 8.9%
over the same quarter in 1997. For the six months ended June 30, 1998, net
interest income was up approximately $149,000 or 9.4% over the same period of
1997. This increase is primarily attributable to the growth of the loan
portfolio. Management anticipates that demand for loans will continue strong
throughout the remainder of 1998.
The provision for loan losses was $90,000 for six months ended June 30, 1998 and
1997 or .18% of average loans outstanding at June 30, 1998, compared to .20% of
average loans outstanding at June 30, 1997. Net charge-offs during the second
quarter of 1998 were $84,149 up $76,767 from the same period in 1997. Net
charge-offs for the six months ended June 30, 1998 were $87,326 or .18% of
average outstanding loans, compared to $36,045 or .08% of average outstanding
loans for the same period in 1997.
The provision reflects management's assessment of the adequacy of the allowance
for loan losses to absorb potential write-offs in the loan portfolio. Factors
considered in this assessment are past loss experience, known and inherent risks
in the loan portfolio, current and anticipated economic conditions and other
pertinent factors.
Nonperforming Assets
- --------------------
6/30/98 12/31/97
-------- --------
Nonaccrual loans $284,000 $304,000
Restructured loans -0- -0-
-------- --------
Total nonperforming loans $284,000 $304,000
Foreclosed real estate -0- -0-
-------- --------
Total nonperforming assets $284,000 $304,000
======== ========
Accruing loans past due 90 days or more $20,000 $8,000
======== ========
Nonperforming loans to total loans .54 .63
======== ========
Allowance for loan losses times
nonperforming loans 2.06 1.92
======== ========
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10
Non-interest income increased in the second quarter of 1998 approximately
$35,000 or 19.9% over the same quarter of 1997. For the six months ended June
30, 1998, non-interest income was up $106,000 or 29.3% over the same six months
of 1997. This increase during the first six months is primarily attributable to
increase in mortgage loan origination fees of approximately $77,000 and gain on
sale of property of $57,000. Service fees on deposit activity decreased
approximately $24,000 as a result of a decrease in NSF charges.
Non-interest expenses totaled approximately $584,000 for the quarter ended June
30, 1998 compared to approximately $497,000 for the same quarter in 1997. For
the six months ended June 30, 1998, non-interest expenses totaled approximately
$1,197,000, compared to approximately $1,018,000 during the same six months of
1997. This increase of 17.6% in the first six months is due primarily to an
increase in salaries and employee benefits. The Company's efficiency ratio
(non-interest expense divided by the sum of net interest income after provision
for loan losses and non-interest income) was 57% for the first six months of
1998 as compared to 55% for the first six months of 1997.
Net income for the quarter ended June 30, 1998 was $311,009 or 7% increase
compared to $290,774 for the same period in 1997. For the six months ended June
30, 1998, net income was $619,943 which is a 10.3% increase over the same period
in 1997.
PART II. - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
No. 27 Financial Data Schedules (SEC use only)
(b) Reports on Form 8-K:
No report on Form 8-K was filed during the quarter ended June 30,
1998.
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11
SIGNATURES
Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
BRYAN BANCORP OF GEORGIA, INC.
Date: September 29, 1998 By: /s/ E. James Burnsed
------------------ --------------------
E. James Burnsed,
President and Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BRYAN BANCORP OF GEORGIA, INC. FOR THE PERIOD ENDED
JUNE 30, 1998 , AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,601,757
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,940,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 8,024,509
<INVESTMENTS-CARRYING> 3,863,065
<INVESTMENTS-MARKET> 3,976,465
<LOANS> 52,186,271
<ALLOWANCE> 586,106
<TOTAL-ASSETS> 71,042,621
<DEPOSITS> 59,507,782
<SHORT-TERM> 265,000
<LIABILITIES-OTHER> 3,650,237
<LONG-TERM> 0
0
0
<COMMON> 532,258
<OTHER-SE> 7,087,344
<TOTAL-LIABILITIES-AND-EQUITY> 71,042,621
<INTEREST-LOAN> 2,555,716
<INTEREST-INVEST> 359,544
<INTEREST-OTHER> 82,015
<INTEREST-TOTAL> 2,997,275
<INTEREST-DEPOSIT> 1,156,282
<INTEREST-EXPENSE> 1,258,745
<INTEREST-INCOME-NET> 1,738,530
<LOAN-LOSSES> 90,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,197,019
<INCOME-PRETAX> 619,943
<INCOME-PRE-EXTRAORDINARY> 619,943
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 619,943
<EPS-PRIMARY> 1.23
<EPS-DILUTED> 1.20
<YIELD-ACTUAL> 5.11
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 583,432
<CHARGE-OFFS> 126,481
<RECOVERIES> 39,155
<ALLOWANCE-CLOSE> 586,106
<ALLOWANCE-DOMESTIC> 586,106
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
