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, 1997
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: 1,003,112
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
TIMBERLINE BANCSHARES, INC.
CONSOLIDATED INCOME STATEMENT
Periods Indicated
(Amounts stated in thousands)
Quarter Year Prior Prior Yr
Ended to Date Quarter End to Date
09/30/97 09/30/97 09/30/96 09/30/96
1. Interest and Fees on Loans $1,180 $3,355 $1,087 $3,246
2. Interest On Securities
Held to Maturity 216 499 210 519
Available for Sale 113 367 111 303
3. Trading Account interest -0- -0- -0- -0-
4. Other interest 146 458 173 526
5. Total Interest Income 1,655 4,679 1,581 4,594
6. Interest on Deposits 539 1,542 501 1,537
7. Interest on short term borrowing -0- -0- -0- -0-
8. Interest on long term debt -0- -0- -0- -0-
9. Total Interest Expense 539 1,542 501 1,537
10. Net Interest Income 1,116 3,137 1,080 3,057
11. Provision for Loan Losses -0- -0- 15 15
12. Net Interest Income after
Provision for loan losses 1,116 3,137 1,065 3,042
13. Other Income 108 331 60 294
14. Other Expenses 826 2,517 759 2,308
15. Income before Tax 398 951 366 1,028
16. Income Tax Expense 123 245 61 328
17. Income before extraordinary
item 275 706 305 700
18. Cumulative effect of accounting
changes -0- -0- -0- -0-
19. Net Income $ 275 $ 706 $ 305 $ 700
20. Earnings per share $ .27 $ .70 $ .30 $ .70
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.
TIMBERLINE BANCSHARES, INC.
CONSOLIDATED BALANCE SHEET
09/30/97
(Amounts stated in thousands)
ASSETS
1. Cash and Due from Banks $ 5,736
2. Interest Bearing Deposits other banks -0-
3. Federal Funds sold and securities
purchased under resale agreement 10,200
4. Trading Account Assets -0-
5. Other short-term investments 1,289
6. Investment securities
Held for Sale 14,848
Held to Maturity 7,215
7. Loans, Total 42,812
Allowance for loan losses (470)
Unearned Income (70)
8. Premises and Equipment 2,141
9. Due from customers on acceptances -0-
10. Other assets 1.319
11. Total Assets $85,020
LIABILITIES
12. Deposits, non-interest bearing $16,220
Interest bearing 60,889
13. Short-term borrowing -0-
14. Bank Acceptances outstanding -0-
15. Other liabilities 495
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 2,980
22. Other Shareholders equity 4,436
23. Total Liabilities and Shareholders Equity $85,020
Note: Held for Sale amount stated net of unrealized loss of $2.
TIMBERLINE BANCSHARES, INC
CONSOLIDATED STATEMENT OF CASH FLOWS
For Periods Indicated
(Amounts stated in thousands)
Year Year
to Date to date
09/30/97 09/30/96
Cash Flow from Operating Activities
Net Income $706 $ 700
Non-cash items included in income
Depreciation 194 143
Net change in Bad Debt Provision (21) 15
Cumulative effect of accounting
change
(Increase)Decrease in:
Other Assets 205 (26)
Increase(Decrease) in:
Other Liabilities 65 1
Net cash provided by operations 1,149 833
Cash Flow from Investing Activities
Increase(Decrease) in:
Deposits 6,841 2,531
(Increase)Decrease in:
Short Term Investments (40) (43)
Securities: Held for Sale (8,408) 271
Held to Maturity 2,359 219
Federal Funds Sold 2,500 (2,700)
Loans (3,544) (315)
(Purchase)Sale of Fixed assets (238) (89)
Net cash (used for) provided by
investing activities (530) (126)
Cash Flow from Financing Activities
Dividends (Paid) (251) (249)
Additional Paid in Capital 166 135
Net cash (applied to)provided by
financing activities (85) (114)
Net cash increase(decrease) in cash
and due from banks 534 593
Cash and Due from Banks at
beginning of year 5,202 4,163
Cash and Due from Banks at
end of period $5,736 $4,756
Item 2. Management's Discussion and Analysis or Plan of Operation.
(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
Operations
As is indicated by the financial statements, the Bank is maintaining the steady
profitability that it has enjoyed in the past. The changes in income and
expense from 1996 to 1997 are minimal in most categories and can be attributed
to the changes in interest rates, both earned and paid, the normal changes that
occur with growth, including increases in operating expenses. The Bank has
installed a voice response system for the convenience of our customers. The
Bank also shared startup costs with the lead bank of a Credit Card program for
California State Employees Association in which the Bank is a participant.
The Bank has experienced a flattening of growth in loan demand in the past
couple of years. 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
not increased the reserve in 1997.
The Bank paid a $.25 per share dividend in the first quarter of 1997 and the
Board of Directors has declared an additional $.25 per share dividend to be paid
in October.
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 10/27/97 /s/ Robert J. Youngs
Robert J. Youngs, President & CEO
Date 10/27/97 /s/ Helen L. Gaulden
Helen L. Gaulden, Vice Presidnt & Treasurer
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