<PAGE>
U. S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
EXCHANGE ACT
COMMISSION FILE NUMBER 0-19030
COMMUNITY TRUST FINANCIAL SERVICES CORPORATION
(Exact name of small business issuer as specified in its charter)
Georgia 58-1856582
(State of incorporation) (I.R.S.Employer Identification No.)
1784 ATLANTA HIGHWAY, HIRAM, GEORGIA 30141
(Address of principal executive offices)
(770) 445-1014
(Issuer's telephone number including area code)
---------------
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
PROCEEDINGS 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 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 the latest practicable date: There were 839,264 shares of Common
Stock outstanding as of November 7, 1997.
Transitional Small Business Disclosure Format (check one): Yes ; No X
--- ---
<PAGE>
COMMUNITY TRUST FINANCIAL SERVICES CORPORATION
QUARTERLY REPORT ON FORM 10-QSB
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
ITEM PAGE
NUMBER NUMBER
- ------ ------
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
1. Consolidated Balance Sheets at September 30, 1997 (unaudited)
and December 31, 1996 (audited)........................................ 1
2. Consolidated Statements of Earnings for the three months
ended September 30, 1997 and September 30, 1996, and the nine months
ended September 30, 1997 and September 30, 1996 (unaudited)............ 2
3. Consolidated Statements of Cash Flows for the nine months
ended September 30, 1997 and September 30, 1996 (unaudited)............ 3
4. Notes to Consolidated Financial Statements............................. 5
Item 2. Management's Discussion and Analysis or Plan of Operation............. 6
PART II - OTHER INFORMATION................................................... 9
Item 1. Legal Proceedings..................................................... 9
Item 2. Changes in Securities and Use of Proceeds............................. 9
Item 3. Defaults upon Senior Securities....................................... 9
Item 4. Submission of Matters to a Vote of Security Holders................... 9
Item 5. Other Information..................................................... 9
Item 6. Exhibits and Reports on Form 8-K...................................... 9
Signatures............................................................ 10
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
COMMUNITY TRUST FINANCIAL SERVICES CORPORATION
Consolidated Balance Sheets
September 30, 1997 and December 31, 1996
<TABLE>
<CAPTION>
Assets
September 30, December 31,
1997 1996
------------ ------------
(Unaudited) (Audited)
<S> <C> <C>
Cash and due from banks 3,961,810 3,011,164
Federal funds sold 5,630,000 7,020,000
---------- ----------
Cash and cash equivalents 9,591,810 10,031,164
U. S. Treasury and other U. S. Government
agency securities available for sale 16,955,365 19,701,854
State, county, and municipal securities
available for sale 4,537,323 2,716,836
Other investments 301,100 255,000
Loans 52,877,913 49,425,713
Less: Allowance for loan losses (806,655) (713,518)
---------- ----------
Loans, net 52,071,258 48,712,195
Premises and equipment 2,199,799 2,296,111
Accrued interest receivable 787,039 757,276
Other real estate and repossessions 37,460 3,000
Other assets 695,778 730,182
---------- ----------
87,176,932 85,203,618
========== ==========
Liabilities and Stockholders' Equity
Deposits:
Demand 11,816,741 9,648,648
Interest-bearing demand 18,806,807 17,211,638
Savings 11,416,561 15,546,932
Time 21,994,877 21,280,978
Time, in excess of $100,000 14,463,118 13,209,565
---------- ----------
Total deposits 78,498,104 76,897,761
Accrued interest payable 737,447 805,693
Accrued expenses and other liabilities 551,588 614,540
---------- ----------
Total liabilities 79,787,139 78,317,994
Minority interest 2,161 7,748
Stockholders' equity:
Common stock, $2.50 par value;
5,000,000 shares authorized; 839,264 and
839,164 issued and outstanding 2,098,160 2,097,910
Additional paid-in capital 2,101,939 2,101,401
Retained earnings 3,145,497 2,682,999
Net unrealized gain (loss) on
securites available for sale, net of tax 42,036 (4,434)
---------- ----------
Total stockholders' equity 7,387,632 6,877,876
---------- ----------
87,176,932 85,203,618
========== ==========
</TABLE>
The consolidated balance sheet at December 31, 1996 has been taken from the
audited financial statements.
See accompanying notes to consolidated financial statements.
Page 1 of 10
<PAGE>
COMMUNITY TRUST FINANCIAL SERVICES CORPORATION
Consolidated Statements of Earnings
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $1,564,958 $1,441,584 $4,474,467 $4,016,004
Interest on federal funds sold 40,115 45,967 148,330 106,718
Interest on investment securities:
U.S. Treasury and U.S. Government agencies 269,039 234,949 828,621 779,377
Other 59,232 36,351 159,064 90,597
---------- ---------- ---------- ----------
Total interest income 1,933,344 1,758,851 5,610,482 4,992,696
Interest expense:
Interest on deposits
Demand $ 100,555 $ 107,839 $ 288,995 $ 297,501
Savings 88,360 87,889 292,916 264,415
Time 323,743 302,350 954,857 859,055
Time, in excess of $100,000 206,379 175,781 598,320 469,929
Interest expense - other 6,689 12,001 19,266 25,205
---------- ---------- ---------- ----------
Total interest expense 725,726 685,860 2,154,354 1,916,105
---------- ---------- ---------- ----------
Net interest income 1,207,618 1,072,991 3,456,128 3,076,591
Provision for loan losses 36,633 55,639 164,071 149,317
---------- ---------- ---------- ----------
Net interest income after
provision for loan losses $1,170,985 $1,017,352 $3,292,057 $2,927,274
---------- ---------- ---------- ----------
Other income:
Service charges and fees $ 232,233 $ 207,179 $ 698,233 $ 603,863
Insurance commissions 61,497 59,108 182,315 121,626
Loss on sales of investment securities (3,219) (1,618) (3,219) (9,851)
Appraisal fees 27,051 23,950 69,902 71,405
Miscellaneous 11,890 14,058 33,950 44,892
---------- ---------- ---------- ----------
Total other income 329,452 302,677 981,181 831,935
Other expenses:
Salaries and employee benefits $ 586,144 $ 496,161 $1,671,414 $1,367,598
Occupancy 160,285 140,332 491,167 401,605
Other operating 378,164 281,041 1,046,112 848,080
---------- ---------- ---------- ----------
Total other expenses 1,124,593 917,534 3,208,693 2,617,283
---------- ---------- ---------- ----------
Earnings before income taxes $ 375,844 $ 402,495 $1,064,545 $1,141,926
Income taxes 158,292 137,843 397,816 389,615
Minority interest in earnings (loss) of consolidated subsidiary (7,213) 548 (5,586) 7,387
---------- ---------- ---------- ----------
Net earnings $ 224,765 $ 264,104 $ 672,315 $ 744,924
========== ========== ========== ==========
Net earnings per common share $ 0.27 $ 0.32 $ 0.80 $ 0.89
========== ========== ========== ==========
Weighted average common shares outstanding 839,264 835,797 839,250 835,945
========== ========== ========== ==========
Dividends per common share $ 0.00 $ 0.00 $ 0.25 $ 0.25
========== ========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
Page 2 of 10
<PAGE>
COMMUNITY TRUST FINANCIAL SERVICES CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30, September 30,
1997 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 672,315 $ 744,924
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation, amortization, and accretion 261,157 193,819
Provision for loan losses 164,071 149,317
Net loss on sale of investment securities 3,219 9,852
Net gain on sale of other real estate 0 (1,330)
Net gain on sale of fixed asset (1,000) (1,422)
Net change in:
Interest receivable (29,763) 25,992
Interest payable (68,246) 62,815
Other assets (79,201) (484,437)
Accrued expenses and other liabilities (68,539) 530,480
----------- -----------
Net cash provided by operating activities $ 854,013 $ 1,230,010
----------- -----------
Cash flows from investing activities:
Purchase of investment securities (4,845,782) (8,863,275)
Proceeds from maturities of investment securities 3,045,000 4,860,000
Proceeds from sales, calls, and paydowns
of investment securities 2,821,777 4,823,184
Purchase of equity securities (46,100) (205,000)
Net increase in loans (3,560,499) (9,987,160)
Purchase of bank premises and equipment (100,078) (185,302)
Proceeds from sale of other real estate 0 101,841
Improvements to other real estate 0 (3,053)
Proceeds from sale of fixed asset 1,000 3,850
----------- -----------
Net cash used in investing activities $(2,684,682) $(9,454,915)
----------- -----------
Cash flows from financing activities:
Net change in demand and savings deposits (367,109) 4,312,586
Net change in time deposits 1,967,452 5,764,872
Dividends paid (209,816) (209,125)
Retirement of stock 0 (7,000)
Exercise of stock options 788 6,772
----------- -----------
Net cash provided by financing activities $ 1,391,315 $ 9,868,105
----------- -----------
Net decrease in cash and cash equivalents (439,354) 1,643,200
Cash and cash equivalents at beginning of period 10,031,164 5,907,523
----------- -----------
Cash and cash equivalents at end of period $ 9,591,810 $ 7,550,723
=========== ===========
See accompanying notes to consolidated financial statements.
Page 3 of 10
</TABLE>
<PAGE>
COMMUNITY TRUST FINANCIAL SERVICES CORPORATION
Consolidated Statement of Cash Flows, continued
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30, September 30,
1997 1996
------------- -------------
<S> <C> <C>
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest 2,222,600 1,853,290
Noncash investing activities:
Transfers of loans to other real estate 37,365 0
Change in unrealized gain/(loss) on securities available
for sale, net of tax of $25,670 and $63,725 46,470 (117,272)
</TABLE>
See accompanying notes to consolidated financial statements.
Page 4 of 10
<PAGE>
COMMUNITY TRUST FINANCIAL SERVICES CORPORATION
Notes to Consolidated Financial Statements
1. Basis of Presentation
---------------------
The consolidated financial statements include the accounts of Community
Trust Financial Services Corporation (the Company), its wholly-owned
subsidiaries, Community Trust Bank (the Bank) and Metroplex Appraisals, Inc.
(Metroplex), and its majority-owned subsidiary Community Loan Company (CLC).
All significant intercompany accounts and transactions have been eliminated in
consolidation. Effective September 1, 1995, the Company established CLC as a
non-bank subsidiary engaged in the consumer finance business in Woodstock,
Georgia. Effective April 1, 1996, CLC acquired two additional consumer finance
offices located in Rockmart, Georgia, and Rossville, Georgia. The Company owns
75% of CLC's outstanding capital stock. The remaining 25% of CLC's outstanding
capital stock is owned by an individual who is employed as President of CLC.
The Company has helped finance the operations of CLC through a revolving line of
credit which, at September 30, 1997, had a maximum availability of $1,900,000.
Effective May 16, 1997, the Company entered into a joint venture with JRH
Diversified, Inc. to establish a non-bank subsidiary that engages in the
business of selling, leasing, or servicing automated teller machines that
provide cash or cash equivalents. The Company owns 49% of the equity in Cash
Transactions, LLC, ("CT") therefore, the Company's ownership in CT is considered
an investment in an unconsolidated subsidiary. The financial data of the
Company is not significantly affected by the operations of CT.
The consolidated financial information furnished herein reflects all
adjustments which are, in the opinion of management, necessary to present a fair
statement of the Company's financial position as of September 30, 1997 and the
results of its operations and cash flows for the periods covered herein. All
such adjustments are of a normal recurring nature.
2. Recent Accounting Pronouncements
--------------------------------
During February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards 128 ("SFAS 128"). SFAS 128
simplifies current standards by eliminating the presentation of primary earnings
per share ("EPS") and requiring the presentation of basic earnings per share,
which includes no potential common shares and thus no dilution. The Statement
also requires entities with complex capital structures to present basic and
diluted EPS on the face of the income statement and also eliminates the modified
treasury stock method of computing potential common shares. The Statement is
effective for financial statements issued for periods ending after December 15,
1997. Early application is not permitted. Upon adoption, restatement of all
prior-period EPS data presented is required. Management does not expect this
new standard to have a material impact on the earnings per share calculation.
In June 1997, the FASB issued Statement of Financial Accounting Standards
130, "Reporting Comprehensive Income" ("SFAS 130") and Statement of Financial
Accounting Standards 131, "Disclosures about Segments of an Enterprise and
Related Information" ("SFAS 131"). SFAS 130 establishes standards for the
reporting and display of comprehensive income and its components in a full set
of general-purpose financial statements. SFAS 131 specifies the presentation and
disclosure of operating segment information reported in the annual report and
interim reports issued to stockholders. The provisions of both statements will
be effective for fiscal years beginning after December 15, 1997. The management
of the Company believes that the adoption of these statements will not have a
material impact on the Company's financial position, results of operations, or
liquidity.
3. Earnings Per Share
------------------
Earnings per share amounts are based on the weighted average number of
shares outstanding during the period.
Page 5 of 10
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
For the Nine Month Period Ended September 30, 1997
Management's discussion and analysis of financial condition and results of
operations analyzes the material changes in the consolidated balance sheets and
statements of earnings presented herein for Community Trust Financial Services
Corporation (the Company). Unless otherwise indicated, the term Company
includes Community Trust Bank (the Bank), Metroplex Appraisals, Inc.
(Metroplex), and Community Loan Company (CLC). Metroplex, located in Dallas,
Georgia, is a wholly-owned non-bank subsidiary of the Company which performs
appraisals of real and personal property. CLC is a majority-owned subsidiary
which is engaged in the consumer finance business with offices in Woodstock,
Georgia, Rockmart, Georgia, and Rossville, Georgia. The financial data analyzed
herein is not significantly affected by the operations of Metroplex or CLC.
Management anticipates that Metroplex and CLC will have only a minimal impact on
the Company's earnings and performance during 1997.
Financial Condition
- -------------------
Gross loans during the first nine months of 1997 increased approximately
$3,452,200 or 6.98% over the total gross loans at December 31, 1996, as compared
to an increase of $9,970,812, or 25.63%, for the same nine month period ended
September 30, 1996. Management believes that the decrease in loan growth was
due primarily to an increase in competition from other financial institutions
which have moved into the Bank's market area. Management believes that the
large increase in loan growth during the first nine months of 1996 was due
primarily to an increase in lending personnel. Since CLC operates from three
relatively small offices, its gross loans, totaling approximately $1,222,734 at
September 30, 1997, or 2.31% of the Company's gross loans, do not significantly
affect the financial data analyzed. Although management anticipates growth in
CLC's total loans, management anticipates that CLC will have only a minimal
impact on the Company's balance sheet. Management anticipates some continued
increase in the Bank's loan growth for the remainder of 1997 primarily due to
its increased marketing efforts which are designed to attract new borrowers in
its primary lending area and to provide additional loan products to its existing
borrowers. Management continues to strive for increased loan volume while
meeting the criteria set by its loan policy.
The Bank's increase in gross loans for the first nine months of 1997 was
funded primarily through an increase in deposits. Total deposits during the
first nine months of 1997 increased approximately $1,600,343 or 2.08%, from
$76,897,761 at December 31, 1996 to $78,498,104 at September 30, 1997. A factor
which has contributed to the relatively moderate deposit growth is the increased
competition from other financial institutions which have moved into Paulding
County. Management is monitoring core deposits and customer relationships in an
effort to maintain overall deposit growth. The Bank's increase in gross loans
for the first nine months of 1997 was also funded through a decrease in federal
funds sold. Federal funds sold decreased by $1,390,000, or 19.80%, from
$7,020,000 at December 31, 1996, to $5,630,000 at September 30, 1997.
Results of Operations
- ---------------------
Interest Income
- ---------------
Interest income for the first nine months of 1997 was $5,610,482,
representing an increase of $617,786, or 12.37% over the same period in 1996.
This increase was primarily attributable to a 10.22% increase in the Company's
total interest earning assets to $80,301,701 for the period ended September 30,
1997 as compared to $71,853,611 for the same period in 1996. The yield on
interest-earning assets was 9.60% for the period ended September 30, 1997, as
compared to 9.30% for the same period in 1996. This increase in yield was due
primarily to an increase in market interest rates. Investment securities during
the first nine months of 1997 decreased by approximately $926,002, or 4.13%
compared to total investment securities held at December 31, 1996.
Page 6 of 10
<PAGE>
Additionally, the Company holds approximately $2,235,230 or 10.40% of its
investment portfolio in mortgage-backed securities. These mortgage-backed
securities are subject to being prepaid in part or in whole. Because a premium
was paid for the purchase of some of these mortgage-backed securities, an
accelerated payback can decrease earnings through faster amortization of the
premium. Mortgage-backed securities also may be subject to a slowdown in
repayments, especially in a rising rate environment. This type of risk, called
extension risk, is not significant since the majority of the mortgage-backed
securities owned by the Company are variable rate securities or have a final
maturity of less than five years. Management monitors the pre-payment risk and
extension risk associated with the Company's investments in mortgage-backed
securities in an effort to maintain an overall acceptable level of risk.
Although the Company loses some interest income due to non-performing
assets, defined as loans placed on non-accrual status, real estate acquired
through foreclosure, and property acquired through repossession, management
considers the Company's level of non-performing assets to be at an acceptable
level. Non-performing assets totaled approximately $208,745, or 0.24% of the
Company's total assets as of September 30, 1997, as compared to $33,237, or
0.04% of the Company's total assets as of December 31, 1996. The Company's non-
performing assets as of September 30, 1997 are comprised of $171,285 in loans
placed on non-accrual status and $37,460 in real estate acquired through
foreclosure, as compared to its non-performing assets as of December 31, 1996,
which were comprised of $30,237 in loans placed on non-accrual status and $3,000
in property acquired through repossession. No material loss is anticipated on
non-accrual or restructured loans, therefore no specific reserves or writedowns
were considered necessary by management as of September 30, 1997. While there
are no specific reserves for the loans designated as non-accrual and
restructured, those loans were rated as either substandard or doubtful by the
Bank's internal rating system. A reserve is carried in the Bank's general
allowance for loan loss in an amount equal to 15% of the balance of any loans
classified as substandard and 50% of the balance of any loans classified as
doubtful.
The Bank has no accruing loans which are contractually past due ninety days
or more as of September 30, 1997, as compared to $4,605 in such delinquent loans
as of December 31, 1996. The Bank has one restructured loan with a balance of
$11,990 as of September 30, 1997, as compared to its balance of $18,090 as of
December 31, 1996. CLC has delinquent loans which are contractually past due
ninety days or more totaling $63,616, as compared to $92,202 as of December 31,
1996. Management considers the totals of delinquent loans at the Bank and CLC to
be at acceptable levels at this time; however, it is recognized that factors
such as a downturn in the local economy could cause levels of delinquent and
non-performing assets to rise.
Interest Expense
- ----------------
Interest expense for the first nine months of 1997 increased $238,249, or
12.43% as compared to the same period in 1996. This increase in interest
expense occurred despite a $567,750, or .84%, decrease in interest-bearing
deposits for that same time period, primarily as a result of the Company's
higher cost of funds resulting from higher market interest rates. As a result
of increases in market interest rates, the Company found it necessary to
increase rates paid on deposits but continued to seek opportunities to maintain
its net interest margin (net interest income divided by average interest-
earning assets). The Company's net interest margin as of September 30, 1997 was
5.96%, as compared to 5.58% as of September 30, 1996.
Other Income
- ------------
Other income increased approximately $149,246, or 17.94%, during the first
nine months of 1997 as compared to the same period in 1996 primarily due to
increased insurance commissions and service charges and fees. Service charges
and fee income increased approximately $94,370, or 15.63%, during the first nine
months of 1997 as compared to the same period in 1996, primarily due to an
increase in the number of deposit accounts. Insurance commissions increased
approximately $60,689, or 49.90%, during the first nine months of 1997 as
compared to the same period in 1996 primarily due to income derived from the
subsidiary CLC. Consumer finance companies typically sell credit life and
automobile liability insurance to many of their customers. Since CLC acquired
two additional loan offices after the first quarter of 1996, insurance
commissions for the first nine months of 1997 include commissions generated by
CLC's two additional offices for a full nine months. Insurance commissions are
generated by these two offices for only six months during the period ended
September 30, 1996.
Page 7 of 10
<PAGE>
Other Expenses
- --------------
Other expenses for the first nine months of 1997 increased $591,410, or
22.60%, as compared to the first nine months of 1996. This increase is
attributable primarily to an increase in salaries and employee benefits caused
by the (i) Bank's need for additional human resources due to the growing
customer base of the Bank, (ii) salary and benefit costs of CLC, and (iii)
routine salary increases. Occupancy expense increased by approximately $89,562,
or 22.30% for the first nine months of 1997 as compared to the same period for
1996, primarily due to increased furniture and equipment depreciation expense at
the Bank. Other operating expenses for the first nine months of 1997 increased
$198,032, or 23.35% as compared to the first nine months of 1996, primarily due
to payment of directors' fees being initiated at the Company and CLC levels.
Prior to 1997, directors of the Company and CLC had served without compensation.
Additionally, the purchase of two CLC offices in April 1996 generated additional
expense in the form of amortization of goodwill and a non-compete agreement.
Capital
- -------
The Company is subject to regulatory capital requirements imposed by the
Georgia Department of Banking and Finance (the "Department"). The Department
has established a minimum level of capital to total assets of 5%, with certain
adjustments, on a consolidated basis for bank holding companies. At September
30, 1997, the Company's ratio of capital to total average assets was 9.47%,
using the Department's guidelines. Under federal law, the Company and the Bank
are required to maintain a ratio of total capital to risk weighted assets of at
least 8.0%, of which at least one-half must be so-called Tier One capital.
Under applicable federal regulations and interpretations thereof, the Bank's
ratio of total capital to risk weighted assets at September 30, 1997 was 11.37%,
and its ratio of Tier One capital to risk weighted assets was 10.12%. Under
applicable federal regulations and interpretations thereof, the Company's ratio
of total capital to risk weighted assets at September 30, 1997 was 13.12%, and
its ratio of Tier One capital to risk weighted assets was 11.88%. Additionally,
under federal law, all but the most highly rated banks and bank holding
companies are required to maintain a minimum ratio of Tier One capital to total
average assets (Tier One leverage ratio) of 4.0% to 5.0%, including the most
highly-rated banks and bank holding companies that are anticipating or
experiencing significant growth. Three percent is the minimum Tier One leverage
ratio required for the most highly-rated banks and bank holding companies with
no plans to expand. The Bank substantially exceeds its Tier One leverage ratio
requirement with a Tier One leverage ratio of 7.07% as of September 30, 1997.
The Company also substantially exceeds its Tier One leverage ratio requirement
with a Tier One leverage ratio of 8.20% as of September 30, 1997. Through its
policy of controlled growth, the Company intends to maintain capital in excess
of the required minimum in order to support future growth.
Liquidity
- ---------
Liquidity represents the Company's ability to meet both loan commitments
and deposit withdrawals. As of September 30, 1997, the Bank's liquidity ratio
(defined as net cash, short term assets, and marketable assets divided by net
deposits and short term liabilities) was 33.22%, as compared to 31.28% at
September 30, 1996. The Bank maintains two lines of credit to borrow fed funds
that total $3,000,000 in order to enhance liquidity. The Bank is a member of
the Federal Home Loan Bank of Atlanta and borrowings are also available through
that relationship. The amount of that credit opportunity fluctuates based on
criteria set by the Federal Home Loan Bank. Additionally, in order to enhance
liquidity at the holding company level, the Company has obtained a $2,500,000
revolving credit facility.
Page 8 of 10
<PAGE>
COMMUNITY TRUST FINANCIAL SERVICES CORPORATION
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-------------------------
Not applicable
Item 2. Changes in Securities and Use of Proceeds
-------------------------------------------------
Not applicable
Item 3. Defaults upon Senior Securities
---------------------------------------
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
-----------------------------------------------------------
Not applicable
Item 5. Other Information
-------------------------
Not applicable
Item 6.a Exhibits
-----------------
Exhibit
Number Description
------ -----------
27 Financial Data Schedule, which is submitted electronically to
the Securities and Exchange Commission for information only
and not filed.
Item 6.b Reports on Form 8-K
----------------------------
Not applicable
Page 9 of 10
<PAGE>
COMMUNITY TRUST FINANCIAL SERVICES CORPORATION
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.
Community Trust Financial Services Corporation
----------------------------------------------
(Registrant)
DATE: November 7, 1997 /s/ Ronnie L. Austin
---------------------------------
Ronnie L. Austin, President
and Chief Executive Officer
(Duly Authorized Officer)
DATE: November 7, 1997 /s/ Angel J. Byrd
---------------------------------
Angel J. Byrd
(Principal Accounting Officer)
Page 10 of 10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,961,810
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 5,630,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 21,492,688
<INVESTMENTS-CARRYING> 21,492,688
<INVESTMENTS-MARKET> 21,492,688
<LOANS> 52,877,913
<ALLOWANCE> 806,655
<TOTAL-ASSETS> 87,176,932
<DEPOSITS> 78,498,104
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,289,035
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0
0
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<OTHER-SE> 5,289,472
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<INTEREST-INVEST> 987,685
<INTEREST-OTHER> 148,330
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<INTEREST-DEPOSIT> 2,135,088
<INTEREST-EXPENSE> 2,154,354
<INTEREST-INCOME-NET> 3,456,128
<LOAN-LOSSES> 164,071
<SECURITIES-GAINS> (3,219)
<EXPENSE-OTHER> 3,208,693
<INCOME-PRETAX> 1,064,545
<INCOME-PRE-EXTRAORDINARY> 672,315
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 672,315
<EPS-PRIMARY> .801
<EPS-DILUTED> .758
<YIELD-ACTUAL> 0
<LOANS-NON> 0
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<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
