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UNITED STATES
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, 1996
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number 33-40799
TIMBERLINE BANCSHARES, INC.
(Exact name of small business issuer as specified in its charter)
California 68-0269988
(State or other jurisdiction of (IRS Employer Identification No.)
of incorporation or organization)
123 N. Main Street P. O. Box 1087, Yreka, Ca 96097
(Address of principal executive offices)
( 916 )842-6191
(Issuer's telephone number)
(Former name, former address and former fiscal year, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d)
of the Exchange Act during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and report required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a
plan confirmed by a court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 954484
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
TIMBERLINE BANCSHARES, INC.
CONSOLIDATED INCOME STATEMENT
Periods Indicated
($ in thousand except per share)
Year Prior Year Prior Year
Quarter End to Date Quarter End to Date
09/30/96 09/30/96 09/30/95 09/30/95
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1. Interest and Fees on Loans 1,087 3,246 1,256 3,730
2. Interest On Securities
Held to Maturity 210 519 183 611
Available for Sale 111 303 129 276
3. Trading Account interest -0- -0- -0- -0-
4. Other interest 173 526 40 132
5. Total Interest Income 1,581 4,594 1,608 4,749
6. Interest on Deposits 501 1,537 580 1,680
7. Interest on short term borrowing -0- -0- -0- -0-
8. Interest on long term debt -0- -0- -0- -0-
9. Total Interest Expense 501 1,537 580 1,680
10. Net Interest Income 1,080 3,057 1,028 3,069
11. Provision for Loan Losses 15 15 11 41
12. Net Interest Income after
Provision for loan losses 1,065 3,042 1,017 3,028
13. Other Income 60 294 147 377
14. Other Expenses 759 2,308 752 2,342
15. Income before Tax 366 1,028 412 1,063
16. Income Tax Expense 61 328 138 381
17. Income before extraordinary
item 305 700 274 682
18. Extraordinary item net of tax -0- -0- -0- -0-
19. Cumulative effect of accounting
changes -0- -0- -0- -0-
20. Net Income $ 305 $ 700 $ 274 $ 682
21. Earnings per share $ .32 $ .73 $ .61 $1.32
Note 1: The financial statements included in this report are unaudited but,
in the opinion of management of the Corporation, reflect all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of financial position, results of operations, and
changes in financial position for the periods presented.
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TIMBERLINE BANCSHARES, INC.
CONSOLIDATED BALANCE SHEET
09/30/96
ASSETS
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1. Cash and Due from Banks $ 4,756
2. Interest Bearing Deposits other banks -0-
3. Federal Funds sold and securities
purchased under resale agreement 12,900
4. Trading Account Assets -0-
5. Other short-term investments 1,235
6. Investment securities
Held for Sale 6,980
Held to Maturity 10,791
7. Loans, Total 39,940
Allowance for loan losses (491)
Unearned Income (84)
8. Premises and Equipment 2,143
9. Due from customers on acceptances -0-
10. Other assets 1,300
11. Total Assets $ 79,470
LIABILITIES
12. Deposits, non-interest bearing $ 14,569
Interest bearing 57,795
13. Short-term borrowing -0-
14. Bank Acceptances outstanding -0-
15. Other liabilities 321
16. Long-term debt -0-
17. Commitments and contingent liabilities -0-
18. Minority Interests -0-
SHAREHOLDERS EQUITY
19 & 20. Preferred stock -0-
21. Common Stock 2,814
22. Other Shareholders equity 3,971
23. Total Liabilities and Shareholders Equity $ 79,470
($ in thousand)
Note: Held for Sale amount stated net of unrealized loss of $62.
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TIMBERLINE BANCSHARES, INC
CONSOLIDATED STATEMENT OF CASH FLOWS
For Periods Indicated
Year Year
($ in thousand) to Date to Date
09/30/96 09/30/95
Cash Flow from Operating Activities
Net income $ 700 $ 682
Non-cash items included in income
Depreciation 143 120
Net change in Bad Debt Provision 15 33
Cumulative effect of accounting
change
(Increase)Decrease in:
Other Assets (26) 244
Increase(Decrease) in:
Other Liabilities 1 (49) 45
Prior period adjustment -0- (7)
Net cash provided by operations 833 1,023
Cash Flow from Investing Activities
Increase(Decrease) in:
Deposits 2,531 (176)
(Increase)Decrease in:
Short Term Investment (43) (35)
Securities: Held for Sale 271 (1,910)
Held to Maturity 219 1,126
Federal Funds Sold (2,700) (400)
Loans (315) 1,176
(Purchase)Sale of Fixed assets (89) (348)
Net cash (used for) provided by
investing activities (126) (567)
Cash Flow from Financing Activities
Dividends Paid (249) (223)
Additional Paid In Capital 135 43
Net cash (applied to)provided by
financing activities (114) (180)
Net cash increase (decrease) in cash
and due from banks 593 276
Cash and Due from Banks at
beginning of year 4,163 4,542
Cash and Due from Banks at
end of year $4,756 $4,818
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Item 2. Management's Discussion
(a) Plan of Operation
It is the intention of management that its wholly-owned subsidiary, Timberline Community Bank, shall continue
to function much as it has in the past. When formed in June 1980, it was the intent of the Bank to serve the
needs of the communities of the County. This intention has not changed.
The bank has enjoyed sustained growth since it was opened and has established a solid deposit base and profitability
that has enabled it to maintain the cash requirements for operation. Management can foresee nothing that would
indicate that this condition will change in the future.
The Bank will continue to operate as a full service banking organization, continually enhancing the service to its
depositors, stay abreast of the changing environment of banking, always monitoring operational costs, maintaining
a respectable return to the shareholders, providing the best service possible to its customer base, and increasing
income to full potential.
(b) Management's Discussion and Analysis of Financial condition and Results of Operation
As is indicated by the financial statements, the Bank is maintaining the steady growth in profitability that it has
enjoyed in the past. The changes in income and expense from 1995 to 1996 are minimal in most categories and can be
attributed th the changes in interest rates, both earned and paid, the normal changes that occur with growth, including
increases in operating expenses. The Bank did experience a one-time refund in 1995 on the FDIC insurance premium paid
by all banks that enhanced the earnings in 1995.
The Bank has experienced a flattening of growth in loan demand in the past year. Management feels that this reflects
the same lack of growth in the local economy. The Bank, while a strong community lender, has not aggressively sought
to increase market share of deposits in order to maintain the profitable yield spread of 5%. This is possible through
careful management of interest rates and the investment portfolio. Loan delinquencies are minimal and with a loan loss
reserve well above regulatory requirements, the Bank has added a nominal amount the the loan loss reserve.
The shareholders enjoyed a two for one stock split in June of this year which is reflected in the earnings per share
comparison of 1996 with 1995. The earnings per share also reflects that the Bank is on the same income pace in 1996
as in 1995. With the deposit growth the Bank has experienced in 1996, it is apparent that overalll operating expenses
are being maintained at a reasonable level.
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PART 11 - OTHER INFORMATION
Item 1. Legal Proceedings
There are no legal proceedings pending other than those in the normal course of doing business that may have
a material impact on the bank.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
TIMBERLINE BANCSHARES, INC.
Date 10/24/96 /s/ Robert J. Youngs
Robert J. Youngs, President & CEO
Date 10/24/96 /s/ Helen L. Gaulden
Helen L. Gaulden, Vice President & Treasurer
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