Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OF 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended June 30, 1996 Commission File Number: 0-19212
JEFFERSONVILLE BANCORP
- ------------------------------------------------------
(Exact name of Registrant as specified in its charter)
New York 22-2385448
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer identification No.)
incorporation or organization)
P. O. Box 398, Jeffersonville, New York 12748
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (914) 482-4000
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 proceeding 12 months (or for such
shorter period that the Registrant was required to file such
report(s), and (2) has been subject to such filing requirements for
the past 90 days.
Yes [ X ] No [ ]
Indicate the number if shares outstanding in each Issuer's classes of
common stock, as of the lates practicable date:
Number of Shares Outstanding
Class of Common Stock as of July 25, 1996
- ---------------------- -------------------
$0.50 par value 1,193,206
INDEX TO FORM 10-Q
Page
Part 1
Item 1 Consolidated Interim Financial Statements (Unaudited)
Consolidated Balance Sheets at
June 30, 1996 and December 31, 1995 1
Consolidated Statements of Income for the Six
Months ended June 30, 1996 and 1995 2
Consolidated Statements of Income for
Three months ended June 30, 1996 and 1995 3
Consolidated Statements of Cash Flows for the Six
Months ended June 30, 1996 and 1995 4-5
Notes to Consolidated Interim Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operation 7-9
Part 2
Item 1 Legal Proceedings NONE
Item 2 Changes in Securities NONE
Item 3 Defaults upon Senior Securities NONE
Item 4 Submission of Matters to a Vote of Security Holders 10
Item 5 Other Information NONE
Item 6 Exhibits and Reports on Form 8-K NONE
Signatures 10
<TABLE>
Jeffersonville Bancorp Consolidated Balance Sheets
<CAPTION>
June 30, December 31,
1996 1995
(Unaudited)
<S> <C> <C>
ASSETS
Cash and due from banks 5,105,000 5,938,000
Federal funds sold 0 4,100,000
CASH AND CASH EQUIVALENTS 5,105,000 10,038,000
Investment securities available for sale, fair value 70,043,000 61,614,000
Investment securities held to maturity, fair value $2,464,000
and $1,866,000 in 1996 and 1995 2,413,000 1,782,000
Loans, less allowance for loan losses of $1,629,000 and
$1,675,000 in 1996 and 1995 112,387,000 109,288,000
Accrued interest receivable 1,252,000 1,180,000
Investments required by law, stock in Federal
Home Loan Bank 736,000 736,000
Premises and equipment 2,398,000 2,205,000
Other real estate owned 661,000 549,000
Other assets 2,059,000 1,511,000
TOTAL ASSETS 197,054,000 188,903,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Demand deposits-non-interest bearing 22,083,000 20,879,000
Now and Super NOW deposits 28,486,000 28,457,000
Savings and insured money market deposits 54,238,000 51,563,000
Time deposits 66,215,000 63,285,000
TOTAL DEPOSITS 171,022,000 164,184,000
Short term debt 2,569,000 197,000
Long-term debt 1,721,000 1,700,000
Accrued expenses and other liabilities 1,873,000 1,894,000
TOTAL LIABILITIES 177,185,000 167,975,000
Stockholders' equity:
Common stock; $.50 par value; 2,225,000 shares
authorized; 1,246,106 shares issued and
1,193,206 shares outstanding at June 30,1996, and
1,284,450 shares issued and 1,231,550 outstanding
at December 31, 1995 623,000 642,000
Paid-in capital 664,000 1,450,000
Undivided profits 19,253,000 18,425,000
Net unrealized gain (loss) on securities available for
sale, net of tax (461,000) 621,000
20,079,000 21,138,000
Less: treasury stock, 52,900 shares 210,000 210,000
TOTAL STOCKHOLDERS' EQUITY 19,869,000 20,928,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 197,054,000 188,903,000
See accompanying notes to consolidated financial statements
</TABLE>
<TABLE>
Jeffersonville Bancorp
Consolidated Statements of Income
<CAPTION>
For the Six Months
Ended June 30,
1996 1995
(Unaudited) (Unaudited)
<S> <C> <C>
INTEREST INCOME
Loan interest and fees $ 5,199,000 $ 4,944,000
Short-term investments 53,000 90,000
Investment securities:
Taxable 1,360,000 1,516,000
Non-taxable 797,000 888,000
TOTAL INTEREST INCOME 7,409,000 7,438,000
INTEREST EXPENSE
Deposits 3,011,000 3,056,000
Federal funds purchased and other short-term debt 37,000 9,000
Long-term debt 45,000 72,000
TOTAL INTEREST EXPENSE 3,093,000 3,137,000
NET INTEREST INCOME 4,316,000 4,301,000
Provision for loan losses (60,000) (40,000)
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 4,256,000 4,261,000
OPERATING INCOME
Service charges 326,000 293,000
Other non-interest income 204,000 161,000
Gains on investment securities available for sale, net 0 26,000
530,000 480,000
OPERATING EXPENSES
Salaries and wages 1,306,000 1,198,000
Employee benefits 417,000 424,000
Occupancy expense of bank premises 459,000 451,000
Other real estate owned expense,net 225,000 92,000
Other operating expense 848,000 911,000
3,255,000 3,076,000
Income before income taxes 1,531,000 1,665,000
Income taxes (320,000) (396,000)
NET INCOME $ 1,211,000 $ 1,269,000
Net income per share $ 1.00 $ 1.00
Weighted average shares outstanding 1,211,806 1,268,951
See accompanying notes to consolidated financial statements
</TABLE>
<TABLE>
Jeffersonville Bancorp
Consolidated Statements of Income
<CAPTION>
For the Three Months
Ended June 30,
1996 1995
(Unaudited) (Unaudited)
<S> <C> <C>
INTEREST INCOME
Loan interest and fees $ 2,641,000 $ 2,525,000
Short-term investments 0 48,000
Investment securities:
Taxable 702,000 753,000
Non-taxable 409,000 414,000
TOTAL INTEREST INCOME 3,752,000 3,740,000
INTEREST EXPENSE
Deposits 1,501,000 1,556,000
Federal funds purchased and other short-term debt 34,000 10,000
Long-term debt 22,000 29,000
TOTAL INTEREST EXPENSE 1,557,000 1,595,000
NET INTEREST INCOME 2,195,000 2,145,000
Provision for loan losses (60,000) 0
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 2,135,000 2,145,000
OPERATING INCOME
Service charges 163,000 149,000
Other non-interest income 147,000 106,000
Gains on investment securities available for sale 0 32,000
310,000 287,000
OPERATING EXPENSES
Salaries and wages 648,000 586,000
Employee benefits 227,000 222,000
Occupancy expense of bank premises 236,000 229,000
Other real estate owned expense,net 171,000 40,000
Other operating expense 455,000 473,000
1,737,000 1,550,000
Income before income taxes 708,000 882,000
Income taxes (119,000) (243,000)
NET INCOME $ 589,000 $ 639,000
Net income per share $ 0.49 $ 0.51
Weighted average shares outstanding 1,197,180 1,249,573
See accompanying notes to consolidated financial statements
</TABLE>
<TABLE>
Jeffersonville Bancorp
Consolidated Statements of Cash Flows
<CAPTION>
Six months ending June 30,
1996 1995
(unaudited) (unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 1,211,000 $ 1,269,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Write down of other real estate owned 12,000 40,000
Provision for loan losses 60,000 40,000
Depreciation and amortization 163,000 179,000
Gain on sale of securities available for sale, net 0 (26,000)
(Increase) decrease in accrued interest receivable (72,000) 37,000
(Increase) decrease in other assets 195,000 (465,000)
Increase (decrease) in accrued expenses and other liabilities (21,000) 301,000
TOTAL ADJUSTMENTS 337,000 106,000
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,548,000 1,375,000
INVESTING ACTIVITIES
Proceeds from maturity and calls of securities available for sale 6,666,000 5,546,000
Proceeds from sales of securities available for sale 500,000 9,228,000
Purchase of securities available for sale (17,721,000) (8,328,000)
Proceeds from maturity and calls of investment securities 309,000 263,000
Purchase of investment securities (640,000) (245,000)
Purchase of investments required by law 0 (36,000)
Net increase in loans (3,593,000) (5,772,000)
Purchases of premises and equipment (356,000) (319,000)
Cash proceeds from sale of other real estate owned 310,000 184,000
NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES (14,525,000) 521,000
FINANCING ACTIVITIES
Net increase in deposits accounts 6,838,000 1,135,000
Increase (decrease) in short-term debt 2,372,000 (97,000)
Increase (decrease) in long-term debt 21,000 (901,000)
Dividends paid (382,000) (387,000)
Purchase and retirement of common stock (805,000) (992,000)
Proceeds from sale of treasury stock 0 13,000
NET CASH (USED) PROVIDED BY FINANCING ACTIVITIES 8,044,000 (1,229,000)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4,933,000) 667,000
Cash and cash equivalents at beginning of year 10,038,000 7,524,000
Cash and cash equivalents at end of year $ 5,105,000 $ 8,191,000
Supplemental disclosure of cash flow information-cash paid
during the year for:
Interest $ 3,044,000 $ 3,097,000
Taxes $ 318,000 $ 286,000
Supplemental schedule of noncash investing activities:
Net change in net unrealized loss on securities
available for sale, net of tax $ 764,000 $ 3,727,000
Decrease in deferred tax on unrealized
loss on securities available for sale $ 310,000 $ 1,446,000
Transfer of loans to other real estate owned $ 434,000 $ 142,000
See accompanying notes to consolidated financial statements
</TABLE>
JEFFERSONVILLE BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
Part 1. Financial Statement Presentation
A. In the opinion of Management of Jeffersonville Bancorp, the
accompanying unaudited interim Consolidated Financial
Statements contains all adjustments necessary to present the
financial position as of June 30 1996 and December 31, 1995, the
Results of Operations for the six month periods and three months
periods ending June 30, 1996 and 1995,and Cash Flows for the six
month periods ended June 30, 1996 and 1995. All adjustments
are normal and recurring. The accompanying consolidated interim
statements should be read in conjunction with Jeffersonville
Bancorp's consolidated year-end financial statements, including
notes thereto, which are included in Jeffersonville Bancorp's
1995 Annual Report.
B. Earnings per share was calculated for the six month periods
ending June 30, 1996 and 1995 based on weighted average shares
outstanding of 1,211,806 and 1,268,951, respectively and for the
three month periods ending June 30, 1996 and 1995 based on
weighted average shares outstanding of 1,197,180 and 1,249,573
respectively.
Item 2: Management's discussion and analysis of Financial Conditions
and Results of Operations
A. Overview - Financial Conditions
During the period from December 31, 1995 to June 30, 1996,
total assets increased $8,151,000 or 4.31%. Investment
securities available for sale increased $8,429,000 or 13.68%.
This increase was the result of a redeployment of short term
funds in order to improve the yield on these investments. The
funds were invested in tax exempt securities as well as short to
intermediate term taxable securities. Federal funds sold, a short
term investment was reduced from $4,100,000 to zero as part of
the funds redeployment. Loans increased from $109,288,000 at
year end 1995 to $112,387,000 at June 30, 1996, an increase of
$3,099,000 or 2.84%. Growth was spread across all types of
loans, however the new Home Equity Loan product which was
successfully launched during the first quarter of 1996, accounted
for $2,067,000 of the increase in loans.
Deposits increased from $164,184,000 at December 31, 1995
to $171,022,000 at June 30, 1996, an increase of $6,838,000 or
4.16%. Growth in deposits occurred in savings and insured money
market deposits as a change in the top tier of the rate structure
attracted large deposits mainly from municipal depositors. Short
term debt increased $2,372,000 in response to short term
liquidity needs.
Total shareholder equity at $20,928,000 at December 31, 1995
and $19,869,000 at June 30, 1996 decreased $1,059,000 or 5.06%.
This decrease was the result of two factors. First, on January 9,
1996 the Board of Directors authorized the repurchase and
retirement of 50,000 shares of Common Stock at $21.00 per
share. As of June 30, 1996, 38,344 shares have been repurchased
and retired with the resultant reduction in Common Stock and
Paid In Capital of $805,000. Second, the net unrealized gain/loss
on securities available for sale decreased $1,082,000 from
$621,000 gain at December 31, 1995 to $461,000 loss at June 30, 1996.
B. Results of Operation
Net income for the first six months of 1996 was $1,211,000
compared to $1,269,000 for the same period in 1995, a decrease
of 4.57%. The Company's annualized return on average assets was
1.24% compared to 1.31% in the same period last year. The return
on average shareholder's equity was 11.74% and 13.14% for the
first six months of 1996 and 1995, respectively. Net income for
the three months ended June 30, 1996 was $589,000 compared to
$639,000 for the same period in 1995, a decrease of 7.82%.
Net Interest Income
Tax equivalent interest income was virtually unchanged in the first
six months of 1996 compared to the same period in 1995.
The yield on investment securities decreased 34 basis points
from 7.56% in 1995 to 7.22% in 1996. While commercial loan and
installment loan rates declined slightly, real estate mortgages
loans, the major portion of the loan portfolio, declined 7 basis
points to 8.78% for the six month period, but registered an
increase of 12 basis points for three month period ended June 30,
1996. The overall yield on interest earning assets was down 10
basis points from 8.56% for the six months ended June 30, 1995
to 8.46% for the same period in 1996. The decline in the yield on
interest earning assets was offset by an increase in average
earning assets. The average balance for earning assets was
$185,279,000 for the period ended June 30, 1996 compared to
$184,747,000 for the same period in 1995.
Interest expense only increased 3 basis points over the same
period last year to reach 4.10%. The overall net interest margin
decreased 5 basis points from 5.17% in 1995 to 5.12% in 1996.
The net interest margin for the three month period ended June 30,
1996 compared to the three month period ended March 31, 1996
showed an increase of 5 basis points from 5.07% to 5.12%, a
favorable indicator.
Provision for Loan Loss
The provision for loan losses reflects management's assessment of
the risk inherent in the loan portfolio, the general state of the
economy and past loan experience. The provision for loan loss was
$60,000 and $40,000 for the six months ended June 30, 1996 and 1995,
respectively. The net charge off for the 1996 period was $59,000
compared to a net recovery of $40,000 the prior year. Based on
management analysis of the loan portfolio, management believes the
current level of the allowance is adequate.
Operating Income and Expense
Operating income for the first six months of 1996 increased
$50,000 or 10.42% compared to the same period in 1995.
Operating expense at $3,255,000 for the first six months of
1996 compared to 3,076,000 for the same period in 1995, an
increase of $179,000 or 5.82%. This increase was the result of
increased salaries and wages required to staff new branch
offices and fund 1996 merit increases, and increased other real
estate owned expense to maintain and liquidate foreclosed
properties. Other operating expense declined primarily as the
result of a decrease in FDIC Insurance premium of $182,000. FDIC
Insurance expense will also be lower in future 1996 accounting
periods, because of decreased FDIC assessment rates.
Item 4: Submission of Matters to a Vote of Security Holders
On May 28, 1996, The annual meeting of shareholders was held.
The election of four Class I directors resulted in the reelection of
John K. Gempler, Hon. Lawrence H. Cooke, Gibson E. McKean and
Edward T. Sykes.
The proposal to ratify the firm of KPMG Peat Marwick LLP as
independent auditors for the fiscal year ended December 31, 1996
was approved.
The proposal to amend article Four of the Certificate of
Incorporation Authorizing the creation of 2,000,000 shares of
Preferred Stock was approved.
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 authorize.
JEFFERSONVILLE BANCORP
Date: 7/25/96
/s/ K.Dwayne Rhodes
- -------------------------------------------
K. Dwayne Rhodes
Treasurer and Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 5,105,000
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 70,043,000
<INVESTMENTS-CARRYING> 2,413,000
<INVESTMENTS-MARKET> 2,464,000
<LOANS> 114,016,000
<ALLOWANCE> 1,629,000
<TOTAL-ASSETS> 197,054,000
<DEPOSITS> 171,022,000
<SHORT-TERM> 2,569,000
<LIABILITIES-OTHER> 1,873,000
<LONG-TERM> 1,721,000
0
0
<COMMON> 623,000
<OTHER-SE> 19,456,000
<TOTAL-LIABILITIES-AND-EQUITY> 197,054,000
<INTEREST-LOAN> 5,199,000
<INTEREST-INVEST> 2,157,000
<INTEREST-OTHER> 53,000
<INTEREST-TOTAL> 7,409,000
<INTEREST-DEPOSIT> 3,011,000
<INTEREST-EXPENSE> 3,093,000
<INTEREST-INCOME-NET> 4,316,000
<LOAN-LOSSES> 60,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,255,000
<INCOME-PRETAX> 1,531,000
<INCOME-PRE-EXTRAORDINARY> 1,211,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,211,000
<EPS-PRIMARY> 1.00
<EPS-DILUTED> 1.00
<YIELD-ACTUAL> 4.67
<LOANS-NON> 2,480,000
<LOANS-PAST> 512,000
<LOANS-TROUBLED> 1,247,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,628,000
<CHARGE-OFFS> 131,000
<RECOVERIES> 72,000
<ALLOWANCE-CLOSE> 1,629,000
<ALLOWANCE-DOMESTIC> 470,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,159,000
</TABLE>
