<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-19040
SOUTH FLORIDA BANK HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
FLORIDA 65-0221393
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2017 MCGREGOR BOULEVARD, FORT MYERS, FLORIDA 33901
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (941) 334-2020
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
--- ---
As of October 31, 1997, there were outstanding 1,210,975 shares of the
Registrant's Common Stock.
1
<PAGE> 2
SOUTH FLORIDA BANK HOLDING CORPORATION
FORM 10-Q - FOR THE QUARTER ENDED SEPTEMBER 30, 1997
INDEX
<TABLE>
<CAPTION>
PAGE
NO.
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
a) Unaudited Consolidated Statements of Financial
Condition - September 30, 1997 and December 31, 1996.............. 3
b) Unaudited Consolidated Income Statements - Nine
Months Ended September 30, 1997 and 1996.......................... 4
c) Unaudited Consolidated Income Statements - Three
Months Ended September 30, 1997 and 1996.......................... 5
c) Unaudited Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1997 and 1996..................... 6
e) Notes to Unaudited Consolidated Financial Statements.............. 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................................... 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 18................................................. 18
SIGNATURES................................................................................... 19
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION Item 1. Financial Statements
SOUTH FLORIDA BANK HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
ASSETS (Unaudited)
- ------
<S> <C> <C>
Cash and due from banks ................................. $ 4,499,420 $ 4,663,206
Federal funds sold ...................................... 6,417,905 5,179,000
Investments available-for-sale .......................... 12,478,125 8,476,165
Investments held-to-maturity (market value of
$11,150,000 and $8,140,000) ........................ 11,153,109 8,163,011
Loans, net of allowance for loan losses of
$894,463 and $904,562 .............................. 46,922,961 43,135,706
Premises and equipment, net ............................. 563,968 408,434
Accrued interest receivable ............................. 501,427 451,821
Other real estate owned ................................. 529,211 548,500
Other assets ............................................ 585,875 503,684
------------ ------------
Total assets ....................................... $ 83,652,001 $ 71,529,527
============ ============
LIABILITIES
- -----------
Deposits:
Demand deposits .................................... $ 13,611,332 $ 15,215,611
NOW accounts ....................................... 9,416,991 7,841,350
Money market accounts .............................. 10,151,140 7,749,782
Savings deposits ................................... 3,372,236 2,725,840
Time deposits under $100,000 ....................... 31,526,224 25,975,567
Time deposits $100,000 and over .................... 5,782,744 4,379,625
------------ ------------
Total deposits ................................. 73,860,667 63,887,775
Securities sold under agreements to repurchase .......... 1,741,669 749,057
Accrued interest payable ................................ 472,624 443,538
Other liabilities ....................................... 117,637 41,432
------------ ------------
Total liabilities .................................. 76,192,597 65,121,802
------------ ------------
SHAREHOLDERS' EQUITY
Common stock, $ 01 par value, 10,000,000
shares authorized, 1,210,975 outstanding ........... 12,110 12,110
Additional paid-in capital .............................. 10,366,378 10,366,378
Net unrealized securities losses ........................ (9,412) (32,911)
Retained deficit ........................................ (2,909,672) (3,937,852)
------------ ------------
Total shareholders' equity ......................... 7,459,404 6,407,725
------------ ------------
Total liabilities and shareholders' equity ......... $ 83,652,001 $ 71,529,527
============ ============
</TABLE>
The accompanying Notes to Unaudited Consolidated Financial Statements are an
integral part of these financial statements.
3
<PAGE> 4
SOUTH FLORIDA BANK HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1997 1996
---------- ----------
INTEREST AND FEE INCOME FROM EARNING ASSETS: (UNAUDITED)
<S> <C> <C>
Loans ....................................................... $3,213,952 $2,744,455
Federal funds sold .......................................... 279,037 124,092
Investment securities ....................................... 809,882 732,320
---------- ----------
Total interest income .................................. 4,302,871 3,600,867
---------- ----------
INTEREST EXPENSE:
Deposits:
NOW accounts ........................................... 97,325 94,297
Money market accounts .................................. 165,051 177,771
Savings deposits ....................................... 52,775 38,414
Time deposits under $100,000 ........................... 1,170,331 961,600
Time deposits $100,000 and over ........................ 222,431 120,746
Other ....................................................... 29,553 31,694
---------- ---------
Total interest expense ................................. 1,737,466 1,424,522
NET INTEREST INCOME ......................................... 2,565,405 2,176,345
Provision (Benefit) for loan losses ......................... -- --
---------- ----------
Net interest income after provision for loan losses ......... 2,565,405 2,176,345
---------- ----------
NON-INTEREST INCOME:
Service charge income ....................................... 360,915 328,970
Realized securities gains ................................... -- 3,828
Other ....................................................... 66,558 133,233
---------- ----------
Total non-interest income .............................. 427,473 466,031
---------- ----------
NON-INTEREST EXPENSES:
Personnel expense ........................................... 1,009,885 917,144
Occupancy expense ........................................... 396,810 397,805
Advertising ................................................. 73,406 42,166
Loan collection expenses .................................... 73,052 45,118
Supplies .................................................... 59,397 49,161
Legal expenses .............................................. 52,023 84,007
Other ....................................................... 390,125 419,148
---------- ----------
Total non-interest expenses ............................ 2,054,698 1,954,549
---------- ----------
INCOME BEFORE INCOME TAXES .................................. 938,180 687,827
BENEFIT FOR INCOME TAXES .................................... 90,000 45,000
---------- ----------
NET INCOME .................................................. $1,028,180 $ 732,827
========== ==========
NET INCOME PER SHARE ........................................ $ .84 $ .60
========== ==========
Weighted average number of common shares and
common share equivalents outstanding ................... 1,229,331 1,218,065
========== ==========
</TABLE>
The accompanying Notes to Unaudited Consolidated Financial Statements are an
integral part of these financial statements.
4
<PAGE> 5
SOUTH FLORIDA BANK HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
--------------------------------
1997 1996
---------- ----------
INTEREST AND FEE INCOME FROM EARNING ASSETS: (UNAUDITED)
<S> <C> <C>
Loans ....................................................... $1,118,788 $ 939,798
Federal funds sold .......................................... 118,833 30,294
Investment securities ....................................... 296,324 219,883
---------- ----------
Total interest income .................................. 1,533,945 1,189,975
---------- ----------
INTEREST EXPENSE:
Deposits:
NOW accounts ........................................... 32,851 29,564
Money market accounts .................................. .59,754 58,175
Savings deposits ....................................... 19,486 12,653
Time deposits uner $100,000 ............................ 419,150 320,754
Time deposits $100,000 and over ........................ 82,453 38,211
Other ....................................................... 13,424 9,966
---------- ----------
Total interest expense ................................. 627,118 469,323
---------- ----------
NET INTEREST INCOME ......................................... 906,827 720,652
PROVISION (BENEFIT) FOR LOAN LOSSES ......................... -- --
---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES ......... 906,827 720,652
---------- ----------
NOT-INTEREST INCOME:
Service charge income ....................................... 124,198 101,592
Realized securities gains ................................... -- --
Other ....................................................... 18,973 90,276
---------- ----------
Total non-interest income .............................. 143,171 191,868
---------- ----------
NON-INTEREST EXPENSES:
Personnel expense ........................................... 358,766 305,700
Occupancy expense ........................................... 154,347 125,078
Advertising ................................................. 25,568 11,867
Supplies .................................................... 24,580 11,348
Loan collection expenses .................................... 23,605 1,693
Legal expense ............................................... 14,254 16,796
Other ....................................................... 128,792 161,617
---------- ----------
Total non-interest expenses ............................ 729,912 634,099
---------- ----------
INCOME BEFORE INCOME TAXES .................................. 320,086 278,421
BENEFIT FOR INCOME TAXES .................................... 30,000 15,000
---------- ----------
NET INCOME .................................................. $ 350,086 $ 293,421
========== ==========
NET INCOME PER SHARE ........................................ $ .29 $ .24
========== ==========
Weighted average number of common shares and
common share equivalents outstanding ................... 1,231,907 1,215,520
========== ==========
</TABLE>
The accompanying Notes to Unaudited Consolidated Financial Statements are an
integral part of these financial statements.
5
<PAGE> 6
SOUTH FLORIDA BANK HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1997 1996
------------ ------------
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: (Unaudited)
<S> <C> <C>
Interest received .............................................. $ 4,253,265 $ 3,653,531
Non-interest income ............................................ 427,473 466,031
Interest paid .................................................. (1,708,380) (1,565,051)
Personnel expenses ............................................. (1,009,885) (917,144)
Other operating expenditures ................................... (864,057) (923,140)
------------ ------------
Net cash provided by operating activities ...................... 1,098,416 714,227
------------ ------------
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Investments available-for-sale:
Purchases ................................................. (5,964,058) (3,049,983)
Maturities ................................................ 2,000,000 7,000,000
Sales ..................................................... -- 1,954,923
Investments held-to-maturity:
Purchases ................................................. (3,987,090) (4,239,999)
Maturities ................................................ 996,992 862,183
Increase in loans .............................................. (3,851,266) (6,709,742)
Proceeds from the sales of
other real estate owned ................................... 83,300 31,665
Increase in premises and equipment ............................. (266,679) (43,971)
------------ ------------
Net cash used in investing activities .......................... (10,988,801) (4,194,924)
------------ ------------
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Increase (Decrease) in:
Demand deposits ........................................... (1,604,279) 752,412
NOW accounts .............................................. 1,575,641 (749,973)
Money market accounts ..................................... 2,401,358 712,101
Savings deposits .......................................... 646,396 19,198
Time deposits ............................................. 6,953,776 900,126
Securities sold under agreements to repurchase ................. 992,612 (701,408)
Proceeds from issuance of common stock ......................... -- 75,000
------------ ------------
Net cash provided by (used in) financing activities ............ 10,965,504 1,007,456
------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ........... 1,075,119 (2,473,241)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ............... 9,842,206 8,081,597
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ..................... $ 10,917,325 $ 5,608,356
============ ============
</TABLE>
The accompanying Notes to Unaudited Consolidated Financial Statements are an
integral part of these financial statements.
6
<PAGE> 7
SOUTH FLORIDA BANK HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
Reconciliation of net income to net cash provided by operating activities
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1997 1996
----------- -----------
(Unaudited)
<S> <C> <C>
Net income ................................................ $ 1,028,180 $ 732,827
Adjustments:
Depreciation and amortization ........................ 111,145 106,958
Benefit for income taxes ............................. (90,000) (45,000)
Decrease (Increase) in:
Accrued interest receivable ...................... (49,606) 52,664
Other assets ..................................... (6,594) (8,137)
Increase (Decrease) in:
Accrued interest payable ......................... 29,086 (140,529)
Other liabilities ................................ 76,205 15,444
----------- -----------
Net cash provided by operating activities ................. $ 1,098,416 $ 714,227
=========== ===========
Supplemental schedule of non-cash activities:
Net unrealized securities gains (losses) ............. $ 23,499 $ (76,580)
Loans transferred to other real estate owned ......... 106,586 29,140
</TABLE>
The accompanying Notes to Unaudited Consolidated Financial Statements are an
integral part of these financial statements.
7
<PAGE> 8
SOUTH FLORIDA BANK HOLDING CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of South
Florida Bank Holding Corporation (the "Holding Corporation"), its wholly-owned
subsidiary South Florida Bank ("Bank"), and the Bank's two wholly-owned
subsidiaries, New Town Properties, Inc. and Valu Prop, Inc. (collectively, the
"Company") after elimination of all material intercompany balances and
transactions.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-QSB and do not include
all of the information and footnotes required by generally accepted accounting
principles for complete consolidated financial statements. In the opinion of the
Company, the consolidated financial statements reflect all adjustments which are
of a normal recurring nature and which are necessary to present fairly the
consolidated financial position of the Company as of September 30, 1997 and
December 31, 1996, and the results of operations for the nine and three months
ended September 30, 1997 and 1996, and cash flows for the nine months ended
September 30, 1997 and 1996. The results of operations for the nine and three
months ended September 30, 1997 are not necessarily indicative of the results
which may be expected for the entire fiscal year.
Net Income Per Share
Net income per share is computed by dividing net income by the weighted
average number of shares of common stock outstanding during the period,
including the effect of unexercised stock options using the treasury stock
method. The treasury stock method assumes that common stock was purchased at the
average market price during the period. For the nine and three months ended
September 30, 1997 and 1996, the computation of weighted average number of
common shares and common share equivalents outstanding was as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------- ---------------------
Nine Three Nine Three
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Common shares ......... 1,210,975 1,210,975 1,206,580 1,210,975
Stock options ......... 18,356 20,932 11,485 4,545
--------- --------- --------- ---------
Total ............ 1,229,331 1,231,907 1,218,065 1,215,520
========= ========= ========= =========
</TABLE>
In February, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("FAS
128"), which becomes effective for the Company for the year ended December 31,
1997. FAS 128 replaces the presentation of primary earnings per share with a
presentation of basic earnings per share which excludes dilution and is computed
by dividing income available to common stockholders by the weighted-average
number of common shares outstanding for the period. Diluted earnings per share
reflects the potential dilution that would occur if securities or other
contracts to issue common stock were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in the earnings of the
entity. Diluted earnings per share is computed similarly to fully diluted
earnings per share pursuant to Accounting Principles Board Opinion No. 15,
"Earnings Per Share." FAS 128 also requires dual presentation of basic and
diluted earnings per share on the face of the income statement for all entities
with complex capital structure and requires a reconciliation of the numerator
and denominator of the basic earnings per share computation to the numerator and
denominator of the diluted earnings per share computation. The Company has not
yet determined the impact of implementing FAS 128.
NOTE B-INVESTMENTS AVAILABLE-FOR-SALE AND INVESTMENTS HELD-TO-MATURITY
As of September 30, 1997 and December 31, 1996, the carrying value,
gross unrealized gains and losses, and
8
<PAGE> 9
estimated market value of investments available-for-sale and investments
held-to-maturity were as follows:
<TABLE>
<CAPTION>
GROSS GROSS CARRYING
AMORTIZED UNREALIZED UNREALIZED VALUE
INVESTMENTS AVAILABLE-FOR-SALE: COST GAINS LOSSES (FAIR VALUE)
----------- ----------- ----------- ------------
1997
- ----
U.S. Agency obligations due:
<S> <C> <C> <C> <C>
In one year or less ....................... $ 2,503,145 $ 35 $ (8,805) $ 2,494,375
After one year through five years ......... 9,990,161 10,359 (16,770) 9,983,750
----------- ----------- ----------- -----------
Total investments
available-for-sale .................... $12,493,306 $ 10,394 $ (25,575) $12,478,125
=========== =========== =========== ===========
1996
- ----
U.S. Treasury obligations due
in one year or less ....................... $ 1,002,670 $ -- $ (170) $ 1,002,500
U.S. Agency obligations due:
In one year or less ....................... 1,000,000 -- (2,500) 997,500
After one year through five years ......... 6,526,578 -- (50,413) 6,476,165
----------- ----------- ----------- -----------
Total investments
available-for-sale .................... $ 8,529,248 $ -- $ (53,083) $ 8,476,165
=========== =========== =========== ===========
<CAPTION>
CARRYING
VALUE GROSS GROSS ESTIMATED
(AMORTIZED UNREALIZED UNREALIZED MARKET
INVESTMENTS HELD-TO-MATURITY: COST) GAINS LOSSES VALUE
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1997
- ----
U.S. Treasury obligations due
in one year or less ....................... $ 998,500 $ 1,500 $ -- $ 1,000,000
U.S. Agency obligations due:
In one year or less ....................... 1,000,000 -- (10,000) 990,000
After one year through five years ......... 7,272,334 8,833 (1,590) 7,279,577
Collateralized mortgage obligations
due after ten years ....................... 1,882,275 2,341 (4,079) 1,880,537
----------- ----------- ----------- -----------
Total investments held-to-maturity ............. $11,153,109 $ 12,674 $ (15,669) $11,150,114
=========== =========== =========== ===========
1996
U.S. Agency obligations due
after one year through five years ......... $ 5,626,637 $ 10,082 $ (22,500) $ 5,614,219
Collateralized mortgage obligations
due after ten years ....................... 2,536,374 126 (10,741) 2,525,759
----------- ----------- ----------- -----------
Total investments held-to-maturity ............. $ 8,163,011 $ 10,208 $ (33,241) $ 8,139,978
=========== =========== =========== ===========
</TABLE>
Expected maturities for the collateralized mortgage obligations will
differ from contractual maturities because borrowers may have the right to call
or prepay obligations with or without call or prepayment penalties.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Consolidated total assets of South Florida Bank Holding Corporation
(the "Holding Corporation"), its subsidiary South Florida Bank (the "Bank"), and
the Bank's wholly-owned subsidiaries, New Town Properties, Inc. and Valu Prop,
Inc. (collectively, the "Company") increased to $83.7 million as of September
30, 1997, from $71.5 million as of December 31, 1996, an increase of $12.2
million or 16.95%. During 1997, the Bank emphasized growth by
9
<PAGE> 10
means of an advertising campaign and an officer calling program, as well as the
opening of a new branch office. The Company's shareholders' equity increased to
$7.5 million as of September 30, 1997 from $6.4 million as of December 31, 1996,
an increase of $1.1 million or 16.41%. This increase was primarily the result of
net income of $1.0 million and the $23,000 increase resulting from unrealized
securities gains. As of September 30, 1997, the Bank's total risk-based capital
ratio was 15.38% and leverage ratio was 8.64%, as compared to 13.70% and 8.82%,
respectively, as of December 31, 1996.
Net income increased to $1.0 million for the nine months ended
September 30, 1997, or $.84 per share, from $733,000 for the nine months ended
September 30, 1996, or $.60 per share. Income before income taxes increased to
$938,000 for 1997, from $688,000 for 1996. The Company's improved earnings
during 1997 as compared to the prior year resulted primarily from net interest
income increasing $389,000 from 1996 to 1997 as the Bank's total
interest-earning assets grew. In addition, the Bank recorded a benefit for
income taxes of $90,000 during 1997, as compared to $45,000 during 1996.
The following discussion provides a more in-depth analysis of the
Company's financial condition and results of operations. The financial
statements and accompanying notes included in this report are an integral part
of this discussion and should be read in conjunction with it.
FINANCIAL CONDITION
The Bank's advertising campaign, coupled with an officer calling
program and the opening of a new branch office, resulted in an increase in total
assets and liabilities. The Company's total assets increased to $83.7 million as
of September 30, 1997 from $71.5 million as of December 31, 1996, an increase of
$12.2 million or 16.95%. Earning assets, comprised of loans and the investment
portfolio (which in turn is comprised of investments held-to-maturity,
investments available-for-sale, and federal funds sold) increased, as discussed
below, to $77.0 million as of September 30, 1997 from $64.9 million as of
December 31, 1996, an increase of $12.1 million or 18.50%. Non-earning assets,
comprised of cash and due from banks, premises and equipment, accrued interest
receivable, other real estate owned and other assets, increased to $6.7 million
as of September 30, 1997 from $6.6 million as of December 31, 1996, an increase
of $104,000 or 1.59%.
Net loans increased to $46.9 million as of September 30, 1997 from
$43.1 million as of December 31, 1996, an increase of $3.8 million or 8.78%.
Mortgage loans which increased $2.5 million were the primary components of
outstanding loans. In addition, installment loans increased $749,000 (primarily
with a mobile home loan product) and commercial loans increased $699,000.
Management's strategy is to lend to small-to-medium sized businesses.
The investment portfolio increased to $30.1 million as of September 30,
1997 from $21.8 million as of December 31, 1996, an increase of $8.3 million or
37.73%. The proceeds from the increase in deposits and securities sold under
agreements to repurchase were primarily used to fund the increase in loans and
the investment portfolio.
Deposits increased to $73.9 million as of September 30, 1997 from $63.9
million as of December 31, 1996, an increase of $10.0 million or 15.61%. Core
deposits increased to $68.1 million as of September 30, 1997 from $59.5 million
as of December 31, 1996, an increase of $8.6 million or 14.40%. This increase in
core deposits primarily reflected deposit accounts opened as a result of the
advertising campaign, officer calling program and the opening of a new branch
office. As of September 30, 1997 and December 31, 1996, the ratio of net loans
to deposits was 63.53% and 67.52%, respectively.
Securities sold under agreements to repurchase increased to $1.7
million as of September 30, 1997 from $749,000 as if December 31, 1996, or an
increase of $1.0 million or 132.51%. This increase resulted primarily from a new
account.
10
<PAGE> 11
For the nine months ended September 30, 1997 and 1996, the Bank's
average statements of financial condition, interest income and expense, and
yields earned and rates paid were as follows:
AVERAGE BALANCES, INTEREST YIELDS AND RATES
<TABLE>
<CAPTION>
1997 1996
----------------------------------- -----------------------------------
Average Yield/ Average Yield/
ASSETS: Balance Interest Rate Balance Interest Rate
- ------- ------------ ---------- ------ ------------ ---------- ------
<S> <C> <C> <C> <C> <C> <C>
Loans:
Commercial .................................. $ 8,221,553 $ 645,477 10.50% $ 7,415,756 $ 573,993 10.34%
Mortgage(a) ................................. 31,371,114 2,103,325 8.96 26,425,175 1,803,749 9.12
Installment ................................. 3,905,886 250,785 8.58 2,324,535 154,234 8.86
Other ....................................... 2,921,318 214,365 9.81 2,812,373 212,479 10.09
------------ ---------- ----- ------------ ---------- -----
Total loans, net of unearned income(b) ......... 46,419,871 3,213,952 9.26 38,977,839 2,744,455 9.41
Investment securities-all taxable .............. 18,476,791 809,882 5.84 16,572,891 732,320 5.89
Federal funds sold ............................. 6,867,941 279,037 5.43 3,109,390 124,092 5.33
------------ ---------- ----- ------------ ---------- -----
Total earning assets(c) ........................ 71,764,603 $4,302,871 8.02% 58,660,120 $3,600,867 8.20%
========== ===== ========== =====
Cash and due from banks ........................ 3,703,351 2,742,840
Other assets ................................... 2,053,673 1,866,105
Allowance for loan losses ...................... (918,392) (929,147)
------------ ------------
Total assets ................................... $ 76,603,235 $ 62,339,918
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
- -------------------------------------
Interest-bearing deposits:
NOW accounts ................................ $ 9,699,675 $ 97,325 1.34% $ 7,650,822 $ 94,297 1.65%
Money market ................................ 9,050,382 174,697 2.58 9,504,685 186,564 2.62
Savings ..................................... 3,171,479 52,775 2.22 2,312,747 38,414 2.22
Time deposits under $100,000 ................ 27,371,901 1,170,331 5.72 22,154,076 961,600 5.80
Time deposits $100,000 and over ............. 5,296,073 222,431 5.62 2,917,907 120,746 5.53
------------ ---------- ----- ------------ ---------- -----
Total interest-bearing deposits ................ 54,589,510 1,717,559 4.21 44,540,237 1,401,621 4.20
Sweep accounts ................................. 1,233,959 29,553 3.20 1,307,390 31,694 3.24
------------ ---------- ----- ------------ ---------- -----
Total interest-bearing liabilities ............. 55,823,469 $1,747,112 4.18% 45,847,627 $1,433,315 4.18%
========== ===== ========== =====
Demand deposits ................................ 13,792,957 10,758,786
Other liabilities .............................. 507,976 434,291
Shareholders' equity ........................... 6,478,833 5,299,214
------------ ------------
Total .......................................... $ 76,603,235 $ 62,339,918
============ ============
SPREAD AND INTEREST DIFFERENTIAL:
- ---------------------------------
Interest rate spread ........................... 3.84% 4.02%
===== =====
Excess of total earning assets over
total interest-bearing liabilities .......... $ 15,941,134 $ 12,812,493
============ ============
Net yield on interest-earnings assets .......... $2,555,759 4.76% $2,167,552 4.94%
========== ===== ========== =====
</TABLE>
- ------------------------------
(a) Interest income on mortgage loans included loan fees recognized as
income of $13,000 and $10,000 during the nine months ended September 30,
1997 and 1996, respectively.
(b) Non-accrual loans were included in loans, net of unearned income.
(c) The Company has made no loans or investments that qualify for tax-exempt
treatment and, accordingly, has no tax-exempt income.
11
<PAGE> 12
For the three months ended September 30, 1997 and 1996, the Bank's
average statements of financial condition, interest income and expense, and
yields earned and rates paid were as follows:
AVERAGE BALANCES, INTEREST YIELDS AND RATES
<TABLE>
<CAPTION>
1997 1996
----------------------------------- ----------------------------------
Average Yield/ Average Yield/
ASSETS: Balance Interest Rate Balance Interest Rate
- ------- ------------ ---------- ------ ------------ ---------- ------
<S> <C> <C> <C> <C> <C> <C>
Loans:
Commercial .................................. $ 8,350,592 $ 216,594 10.29% $ 7,726,260 $ 182,605 9.40%
Mortgage(a) ................................. 31,817,917 733,734 9.15 27,809,654 621,272 8.89
Installment ................................. 4,209,54 9 95,761 9.03 2,877,287 61,817 8.55
Other ....................................... 2,947,791 72,699 9.78 2,969,566 74,104 9.93
------------ ---------- ----- ------------ ---------- ----
Total loans, net of unearned income(b) ......... 47,325,849 1,118,788 9.38 41,382,767 939,798 9.03
Investment securities-all taxable .............. 0,216,393 296,324 5.86 15,034,726 219,883 5.85
Federal funds sold ............................. 8,505,805 118,833 5.54 2,268,244 30,294 5.31
------------ ---------- ----- ------------ ---------- ----
Total earning assets(c) ........................ 76,048,047 $1,533,945 8.00% 58,685,737 $1,189,975 8.07%
========== ===== ========== ====
Cash and due from banks ........................ 3,834,144 2,680,664
Other assets ................................... 2,189,186 1,860,748
Allowance for loan losses ...................... (912,930) (933,419)
------------ ------------
Total assets ................................... $ 81,158,447 $ 62,293,730
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
- -------------------------------------
Interest-bearing deposits:
NOW accounts ................................ $ 9,698,549 $ 32,851 1.34% $ 7,333,599 $ 29,564 1.60%
Money market ................................ 9,820,842 64,736 2.62 9,427,588 61,235 2.58
Savings ..................................... 3,479,631 19,486 2.22 2,299,707 12,653 2.19
Time deposits under $100,000 ................ 29,102,632 419,150 5.71 22,262,983 320,754 5.73
Time deposits $100,000 and over ............. 5,807,309 82,453 5.63 2,867,226 38,211 5.30
------------ ---------- ----- ------------ ---------- ----
Total interest-bearing deposits ................ 57,908,963 618,676 4.24 44,191,103 462,417 4.16
Sweep accounts ................................. 1,654,691 13,424 3.22 1,203,599 9,966 3.29
------------ ---------- ----- ------------ ---------- ----
Total interest-bearing liabilities ............. 59,563,654 $ 632,100 4.21% 45,394,702 $ 472,383 4.14%
========== ===== ========== ====
Demand deposits ................................ 14,204,347 10,940,056
Other liabilities .............................. 559,333 426,387
Shareholders' equity ........................... 6,831,113 5,532,585
------------ ------------
Total .......................................... $ 81,158,447 $ 62,293,730
============ ============
SPREAD AND INTEREST DIFFERENTIAL:
- ---------------------------------
Interest rate spread ........................... 3.79% 3.93%
===== ====
Excess of total earning assets over
total interest-bearing liabilities .......... $ 16,484,393 $ 13,291,035
============ ============
Net yield on interest-earnings assets .......... $ 901,845 4.70% $ 717,592 4.86%
========== ===== ========== ====
</TABLE>
- ------------------------------
(a) Interest income on mortgage loans included loan fees recognized as
income of $5,000 and $6,000 during the three months ended September 30,
1997 and 1996, respectively.
(b) Non-accrual loans were included in loans, net of unearned income.
(c) The Company has made no loans or investments that qualify for tax-exempt
treatment and, accordingly, has no tax-exempt income.
LOAN PORTFOLIO
The Bank's loan portfolio is primarily concentrated in commercial,
mortgage, and installment loans. As of
12
<PAGE> 13
September 30, 1997 and December 31, 1996, the composition of the Bank's loan
portfolio was as follows:
<TABLE>
<CAPTION>
1997 1996
---------------------- ----------------------
% OF % OF
TOTAL TOTAL
AMOUNT LOANS AMOUNT LOANS
------------ ------ ------------ ------
<S> <C> <C> <C> <C>
Commercial .................... $ 8,761,365 18.32% $ 8,062,573 18.31%
Mortgage:(a)
Construction ............. 862,005 1.80 1,029,003 2.34
Non-construction ......... 30,836,076 64.49 28,172,195 63.97
Installment(b) ................ 4,338,801 9.07 3,589,684 8.15
Other loans(c) ................ 3,019,177 6.32 3,186,813 7.23
------------ ------ ------------ ------
Total loans, net of
unearned income .......... 47,817,424 100.00% 44,040,268 100.00%
====== ======
Allowance for loan losses ..... (894,463) 1.87% (904,562) 2.05%
------------ ====== ------------ ======
Loans, net .................... $ 46,922,961 $ 43,135,706
============ ============
</TABLE>
- --------------------
(a) In addition to loans for the purchase, construction, improvement of or
investment in real estate, the Bank's real estate loans include all
loans for various other consumer or business purposes which are secured
by real estate mortgages.
(b) Installment loans generally include loans secured with mobile homes,
automobiles, trucks, boats, and equipment.
(c) Other loans generally include credit card loans, equity lines to
individuals, deposit overdraft protection and deposit overdrafts.
Allowance for Loan Losses
For the nine months ended September 30, 1997 and 1996, the Bank's loan
loss experience and its provision for loan losses were as follows:
<TABLE>
<CAPTION>
1997 1996
----------- ------------
<S> <C> <C>
Average loans outstanding ................................... $46,419,871 $ 38,977,839
=========== ============
Net loans at end of period .................................. $46,922,961 $ 42,405,444
=========== ============
Allowance for loan losses at beginning of period ............ $ 904,562 $ 852,270
Loans charged-off:
Commercial ............................................. 11,386 27,535
Mortgage ............................................... 25,999 17,348
Installment ............................................ 12,506 3,303
Other loans ............................................ 5,979 8,687
----------- ------------
Total loans charged-off ..................................... 55,870 56,873
----------- ------------
Recoveries of loans previously charged-off:
Commercial ............................................. 24,799 115,993
Mortgage ............................................... 19,595 20,302
Installment ............................................ 674 3,097
Other loans ............................................ 703 1,682
----------- ------------
Total recoveries ............................................ 45,771 141,074
----------- ------------
Net loan charged-offs (recoveries) .......................... 10,099 (84,201)
Provision charged to expense ................................ -- --
----------- ------------
Allowance for loan losses at end of period .................. $ 894,463 $ 936,471
=========== ============
Ratio of net charge-offs (recoveries) during period
to average net loans outstanding ....................... .03% (.29)%
Allowance for loan losses as a percentage of loans,
net of unearned income at end of period ................ 1.87% 2.16 %
</TABLE>
13
<PAGE> 14
During 1997, nine loans were charged-off. During 1997, the largest loan
recovery was $17,000, or 37.90% of total recoveries. The remaining recoveries,
which totaled $29,000, encompassed 20 loans.
Non-performing assets increased to $886,000 as of September 30, 1997 as
compared to $811,000 as of December 31, 1996, or an increase of $75,000 or
9.18%. The ratio of non-performing loans as a percent of total loans, net of
unearned income, was .75% and .60% as of September 30, 1997 and December 31,
1996, respectively. The allowance for loan losses as a percentage of
non-performing loans was 250.94% and 344.34% as of September 30, 1997 and
December 31, 1996, respectively.
As of September 30, 1997 and December 31, 1996, the Bank's
non-performing loans and repossessed assets were as follows:
<TABLE>
<CAPTION>
1997 1996
--------------- ---------------
% OF % OF
TOTAL TOTAL
AMOUNT LOANS AMOUNT LOANS
-------- ----- -------- -----
<S> <C> <C> <C> <C>
Non-accruing loans:
Under 90 days delinquent ........................ $138,312 .29% $117,930 .27%
90 or more days delinquent ...................... 218,136 .46 144,762 .33
-------- --- -------- ---
Total non-accruing loans ............................. $356,448 .75% $262,692 .60%
======== === ======== ===
Total real estate owned .............................. $529,211 $548,500
-------- --------
Total non-performing assets .......................... $885,659 $811,192
======== ========
Loans delinquent and accruing:
30 to 59 days ................................... $ 68,308 .14% $ 21,818 .05%
60 to 89 days ................................... 25,283 .05 105,835 .24
-------- --- -------- ---
Total ....................................... $ 93,591 .19% $127,653 .29%
======== === ======== ===
Total delinquencies 30 days and over ................. $450,039 .94% $390,345 .89%
======== === ======== ===
</TABLE>
As of September 30, 1997 and December 31, 1996, the Bank did not have
any troubled debt restructurings or loans delinquent over 90 days still
accruing.
Non-accruing loans totaled $356,000 as of September 30, 1997 as
compared to $263,000 as of December 31, 1996, an increase of $93,000 or 35.69%.
The largest non-accruing loan as of September 30, 1997 was a $112,000 first
mortgage loan collateralized with commercial real estate. The Bank has begun
foreclosure proceedings on the collateral. The second largest non-accruing loan
as of September 30, 1997 was a $101,000 first mortgage loan collateralized with
commercial real estate. As of September 30, 1997, this loan was current.
Management continues to manage its non-performing assets to restore
them to performing status when possible, or otherwise liquidate such assets in
an orderly fashion to maximize the value of such assets to the Company. Although
the Company is endeavoring to actively manage the risks in its loan portfolio,
there is no assurance that the level of non-accrual loans and other real estate
owned will not increase during 1997.
CAPITAL RESOURCES
The Holding Corporation's total shareholders' equity was $7.5 million
and $6.4 million as of September 30, 1997 and December 31, 1996, respectively.
This increase was the result of 1997's net income of $1.0 million and the
$23,000 decrease in the net unrealized securities losses to September 30, 1997
from December 31, 1996. The Bank's total shareholder's equity was $7.0 million
and $6.0 million as of September 30, 1997 and December 31, 1996, respectively.
The increase in the Bank's shareholder's equity was the result of the Bank's net
income of $1.0 million and the $23,000 decrease in the net unrealized securities
losses to September 30, 1997 from December 31, 1996.
14
<PAGE> 15
The Bank's total risk-based capital (total capital to risk-weighted
assets), Tier 1 risk-based capital (Tier 1 capital to risk-weighted assets) and
leverage (Tier 1 capital to total average assets during the prior three months)
ratios as compared to the ratios mandated by the FDIC were as follows:
<TABLE>
<CAPTION>
TOTAL TIER 1
RISK-BASED RISK-BASED LEVERAGE
CAPITAL RATIO CAPITAL RATIO RATIO
------------- ------------- --------
<S> <C> <C> <C>
Well capitalized per FDIC(minimum ratios) ........ 10.00% 6.00% 5.00%
Bank: December 31, 1996 .......................... 13.70 12.45 8.82
September 30, 1997 ......................... 15.38 14.12 8.64
</TABLE>
LIQUIDITY
During the nine months ended September 30, 1997 and 1996, investing
activities used $11.0 million and $4.2 million, respectively, of cash. During
the nine months ended September 30, 1997 and 1996, financing activities provided
$11.0 million and $1.0 million, respectively, of cash. During 1997 and 1996, the
Company focused on growth with an advertising campaign, an officer calling
program and the opening of a new branch office.
RESULTS OF OPERATIONS
SUMMARY
The Company's net income was $1,028,000 and $350,000 for the nine and
three months ended September 30, 1997, respectively, or $.84 and $.29 per share,
as compared to $733,000 and $293,000 for the nine and three months ended
September 30, 1996, or $.60 and $.24 per share. For the nine and three months
ended September 30, 1997 and 1996, the Company's annualized performance ratios
were as follows:
<TABLE>
<CAPTION>
1997 1996
--------------- ---------------
Nine Three Nine Three
---- ----- ----- -----
<S> <C> <C> <C> <C>
Return on average assets .................. 1.79% 1.73% 1.57% 1.88%
Return on average equity .................. 21.16 20.50 18.44 21.21
Average equity to average assets .......... 8.46 8.42 8.50 8.88
</TABLE>
NET INTEREST INCOME
The Bank's earnings are dependent primarily on its net interest income
which is the excess of interest income earned on earning assets (primarily loans
and the investment portfolio - all of which are taxable) over interest expense
paid on deposits and short-term borrowings. Changes in net interest income are
caused by changes in the interest rates earned or paid and by volume changes in
loans, the investment portfolio, deposits and short-term borrowings.
The Bank's net interest income increased to $2.6 million during the
nine months ended September 30, 1997 from $2.2 million during the nine months
ended September 30, 1996, an increase of $388,000 or 17.91%. The increase was
primarily due to the increase in average interest-earning assets and average
interest-bearing liabilities. The 18.73% volume increase in 1997 from 1996 in
loan interest income was primarily attributable to the 16.03% increase in
average loans and the 27.37% volume increase in 1997 from 1996 in investment
interest income was primarily attributable to the 22.34% increase in average
investments. The 24.72% volume increase in 1997 from 1996 in interest expense
was primarily attributable to the 17.87% increase in average interest-bearing
liabilities. The interest rate variance for loans primarily resulted from the
decrease in interest rates charged on loans in 1997 from 1996. The yield on the
investment portfolio decreased 8 basis points reflecting the reinvestment of the
proceeds from investment securities maturing subsequent to 1996 at lower
interest rates. The interest rates paid on interest-bearing liabilities
increased 1 basis point as the Bank paid higher rates on new deposit accounts
than those maturing subsequent to 1996. The result was a decrease in the net
interest margin to 4.76% during 1997 from 4.94% during 1996.
15
<PAGE> 16
The increase (decrease) during the nine months ended September 30, 1997
from the nine months ended September 30, 1996 in the Bank's interest income
earned and interest expense paid resulting from changes in volumes of, rates
earned or paid on, and the combined effect of changes in both volume and rate
on, various categories of interest-earning assets and interest-bearing
liabilities were as follows:
<TABLE>
<CAPTION>
VOLUME/
VOLUME RATE RATE TOTAL
--------- -------- -------- ---------
<S> <C> <C> <C> <C>
ASSETS:
- -------
Loans:
Commercial .............................. $ 62,484 $ 8,773 $ 227 $ 71,484
Mortgage ................................ 338,220 (30,456) (8,188) 299,576
Installment ............................. 105,115 (4,854) (3,710) 96,551
Other ................................... 8,246 (5,929) (431) 1,886
--------- -------- -------- ---------
Total loans ......................... 514,065 (32,466) (12,102) 469,497
Investment securities ........................ 84,129 (5,890) (677) 77,562
Federal funds sold ........................... 150,273 2,360 2,312 154,945
--------- -------- -------- ---------
Total interest income ........................ 748,467 (35,996) (10,467) 702,004
--------- -------- -------- ---------
LIABILITIES:
- ------------
Interest-bearing deposits:
NOW accounts ............................ 25,298 (17,491) (4,779) 3,028
Money market accounts ................... (8,934) (2,934) 1 (11,867)
Savings deposits ........................ 14,289 107 (35) 14,361
Time deposits:
Under $100,000 ...................... 226,894 (13,518) (4,645) 208,731
$100,000 and over ................... 98,591 1,920 1,174 101,685
--------- -------- -------- ---------
Total interest-bearing deposits ......... 356,138 (31,916) (8,284) 315,938
Securities sold under agreements
to repurchase ........................... (1,783) (354) (4) (2,141)
--------- -------- -------- ---------
Total interest expense ....................... 354,355 (32,270) (8,288) 313,797
--------- -------- -------- ---------
Net interest income .......................... $ 394,112 $ (3,726) $ (2,179) $ 388,207
========= ======== ======== =========
</TABLE>
The Bank's net interest income increased to $902,000 during the three
months ended September 30, 1997 from $718,000 during the nine months ended
September 30, 1996, an increase of $184,000 or 25.68%. The increase was
primarily due to the increase in average interest-earning assets and average
interest-bearing liabilities. The 14.01% volume increase in 1997 from 1996 in
loan interest income was primarily attributable to the 12.56% increase in
average loans and the 63.41% volume increase in 1997 from 1996 in investment
interest income was primarily attributable to the 39.76% increase in average
investments. The 33.70% volume increase in 1997 from 1996 in interest expense
was primarily attributable to the 23.79% increase in average interest-bearing
liabilities. The interest rate variance for loans primarily resulted from the
increase in interest rates charged on loans in 1997 from 1996. The yield on the
investment portfolio increased 3 basis points reflecting the reinvestment of the
proceeds from investment securities maturing subsequent to 1996 at higher
interest rates. The interest rates paid on interest-bearing liabilities
increased 7 basis points as the Bank paid higher rates on new deposit accounts
than those maturing subsequent to 1996. The result was a decrease in the net
interest margin to 4.70% during 1997 from 4.86% during 1996.
The increase (decrease) during the three months ended September 30,
1997 from the three months ended September 30, 1996 in the Bank's interest
income earned and interest expense paid resulting from changes in volumes of,
rates earned or paid on, and the combined effect of changes in both volume and
rate on, various categories of interest-earning assets and interest-bearing
liabilities were as follows:
16
<PAGE> 17
<TABLE>
<CAPTION>
VOLUME/
VOLUME RATE RATE TOTAL
--------- -------- -------- ---------
<S> <C> <C> <C> <C>
ASSETS:
- -------
Loans:
Commercial .............................. $ 14,675 $ 17,154 $ 2,160 $ 33,989
Mortgage ................................ 89,059 18,178 5,225 112,462
Installment ............................. 28,467 3,439 2,038 33,944
Other ................................... (540) (1,062) 197 (1,405)
--------- -------- -------- ---------
Total loans ......................... 131,661 37,709 9,620 178,990
Investment securities ........................ 75,782 490 169 76,441
Federal funds sold ........................... 82,854 1,302 4,383 88,539
--------- -------- -------- ---------
Total interest income ........................ 290,297 39,501 14,172 343,970
--------- -------- -------- ---------
LIABILITIES:
- ------------
Interest-bearing deposits:
NOW accounts ............................ 9,482 (4,765) (1,430) 3,287
Money market accounts ................... 2,540 735 226 3,501
Savings deposits ........................ 6,457 189 187 6,833
Time deposits:
Under $100,000 ...................... 98,007 (983) 1,372 98,396
$100,000 and over ................... 38,969 2,374 2,899 44,242
--------- -------- -------- ---------
Total interest-bearing deposits ......... 155,455 (2,450) 3,254 156,259
Securities sold under agreements
to repurchase ........................... 3,715 (227) (30) 3,458
--------- -------- -------- ---------
Total interest expense ....................... 159,170 (2,677) 3,224 159,717
--------- -------- -------- ---------
Net interest income .......................... $ 131,127 $ 42,178 $ 10,948 $ 184,253
========= ======== ======== =========
</TABLE>
As interest rates continue to change, the Bank's net interest margin
may be squeezed by the repricing of the interest-earning assets at different
times than the repricing of interest-costing liabilities.
PROVISION FOR LOAN LOSSES
The Bank made no provision for loan losses during the nine and three
months ended September 30, 1997 and 1996. Net loan charge-offs (recoveries)
during the nine months ended September 30, 1997 were $10,000 as compared to
$(84,000) during the nine months ended September 30, 1996. The amount provided
for loan losses was based on an evaluation by management of the amount needed to
maintain the allowance at a level sufficient to cover anticipated losses and the
inherent risk of losses in the loan portfolio. As of September 30, 1997 and
December 31, 1996, the allowance for loan losses as a percentage of loans net of
unearned income was 1.87% and 2.05%, respectively, and as a percentage of
non-accrual loans was 250.94% and 344.34%, respectively. See "--Financial
Condition-Allowance for Loan Losses".
NON-INTEREST INCOME
Deposit service charge income increased $32,000 or 9.71% to $361,000
(or .70% of average deposits) during the nine months ended September 30, 1997
from $329,000 (or .79% of average deposits) during the nine months ended
September 30, 1996, and increased $22,000 or 22.25% to $124,000 (.69% of average
deposits) during the three months ended September 30, 1997 from $102,000 ( or
.74% of average deposits) during the three months ended September 30, 1996.
These increases primarily resulted from an increased volume of overdraft
charges.
Other non-interest income decreased to $67,000 and $19,000 during the
nine and three months ended September 30, 1997, respectively, from $133,000 and
$90,000 during the nine and three months ended September 30, 1996, or respective
decreases of $66,000 or 50.04% and $71,000 or 78.98%. These decreases resulted
primarily from a $70,000
17
<PAGE> 18
settlement during 1996 with Lee County for business damages resulting from the
Mid-Point bridge construction in front of the Colonial branch.
NON-INTEREST EXPENSE
Personnel expenses increased $93,000 or 10.11% to $1,010,000 during the
nine months ended September 30, 1997, from $917,000 during the nine months ended
September 30, 1996, and increased $53,000 or 17.36% to $359,000 during the three
months ended September 30, 1997, from $306,000 during the three months ended
September 30, 1996. These increases primarily resulted from compensation
increases for existing employees and the increase in the number of employees to
staff the new branch office. The monthly average of full-time equivalent
employees during the nine and three months ended September 30, 1997 was 36.20
and 36.75 as compared to 32.60 and 32.63 employees during the nine and three
months ended September 30, 1996, respectively. As of September 30, 1997 and
December 31, 1996, the Bank employed 35 and 33 full-time and five and five
part-time employees, respectively.
Occupancy expense decreased to $397,000 during the nine months ended
September 30, 1997, from $398,000 during the nine months ended September 30,
1996, or a decrease of $1,000 or .25%. This decrease primarily resulted from
lower depreciation expense as assets became fully depreciated, partially offset
with depreciation expense on newly acquired assets. Occupancy expense increased
to $154,000 during the three months ended September 30, 1997, from $125,000
during the three months ended September 30, 1996, or an increase of $29,000 or
23.40%. This increase primarily resulted from increased depreciation expense on
newly acquired assets, including those of the new branch office.
Loan collection expenses, excluding legal expenses but including real
estate taxes, insurance, gain (loss) on the sale of other real estate owned, and
appraisal costs on real estate in foreclosure, increased to $73,000 and $24,000
during the nine and three months ended September 30, 1997, respectively, from
$45,000 and $2,000 during the nine and three months ended September 30, 1996, or
respective increases of $28,000 or 61.91% and $22,000 or 1294.27%. These
increases resulted primarily from an increase in write-downs of other real
estate owned.
Advertising expense increased to $73,000 and $26,000 during the nine
and three months ended September 30, 1997, respectively, from $42,000 and
$12,000 during the nine and three months ended September 30, 1996, or respective
increases of $31,000 or 74.09% and $14,000 or 115.45%. These increases primarily
resulted from the cost of the advertising campaign conducted during 1997.
Legal expenses decreased to $52,000 and $14,000 during the nine and
three months ended September 30, 1997, respectively, from $84,000 and $17,000
during the nine and three months ended September 30, 1996, or respective
decreases of $32,000 or 38.07% and $3,000 or 15.13%. These decreases reflected
the reduction in collection actions handled by the Bank's attorneys.
INCOME TAXES
During the nine and three months ended September 30, 1997, the Company
had a benefit for income taxes of $90,000 and $30,000, respectively, as compared
to $45,000 and $15,000 during the nine and three months ended September 30,
1996, respectively, by recording deferred income tax assets resulting from the
corresponding reduction in the valuation allowance associated with the Company's
tax loss carry forward.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Exhibits: 27 - Financial Data Schedule (for SEC use only).
During the three months ended September 30, 1997, the Company filed no reports
on Form 8-K.
18
<PAGE> 19
SIGNATURES
Pursuant to the requirements 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.
SOUTH FLORIDA BANK HOLDING CORPORATION
Date: November 10, 1997 By: /s/ William P. Valenti
----------------- ----------------------------------
William P. Valenti, President and
Chief Executive Officer
(Principal financial officer)
Date: November 10, 1997 By: /s/ Sharon Landel
----------------- ----------------------------------
Sharon Landel, Controller
(Principal accounting officer)
19
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SOUTH FLORIDA BANK HOLDING CORPORATION FOR THE 9 MONTHS
ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 4,499,420
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 6,417,905
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 12,478,125
<INVESTMENTS-CARRYING> 11,153,109
<INVESTMENTS-MARKET> 11,150,000
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0
0
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</TABLE>
