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 March 31, 1998
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: 1,006,726
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
TIMBERLINE BANCSHARES, INC.
CONSOLIDATED INCOME STATEMENT
Periods Indicated
Year Prior Year
to Date to Date
03/31/98 03/31/97
1. Interest and Fees on Loans $ 1,213 $ 1,064
2. Interest on Securities:
Held for Sale 171 101
Held to Maturity 119 134
3. Trading Account interest -0- -0-
4. Other interest 164 183
5. Total Interest Income 1,667 1,482
6. Interest on Deposits 580 493
7. Interest on short term borrowing -0- -0-
8. Interest on long term debt -0- -0-
9. Total Interest Expense 580 493
10. Net Interest Income 1,087 989
11. Provision for Loan Losses 20 -0-
12. Net Interest Income after
Provision for loan losses 1,067 989
13. Other Income 108 114
14. Other Expenses 925 843
15. Income before Tax 250 260
16. Income Tax Expense 60 82
17. Income before extraordinary
item 190 178
18. Extraordinary item net of tax -0- -0-
19. Cumulative effect of accounting
changes -0- -0-
20. Net Income $ 190 $ 178
21. Earnings per share $ .19 $ .18
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.
-1-
TIMBERLINE BANCSHARES, INC.
CONSOLIDATED BALANCE SHEET
03/31/98
ASSETS 03/31/98 03/31/97
1. Cash and Due from Banks $ 4,241 $ 4,135
2. Interest Bearing Deposits other banks -0- -0-
3. Federal Funds sold and securities
purchased under resale agreement 16,400 14,600
4. Trading Account Assets -0- -0-
5. Other short-term investments 1,317 1,263
6. Investment securities:
Available for Sale 9,609 8,397
to be Held to Maturity 7,113 8,009
7. Loans, Total 46,727 39,961
Allowance for loan losses (410) (489)
Unearned Income (71) (57)
8. Premises and Equipment 2,504 2,075
9. Due from customers on acceptances -0- -0-
10. Other assets 999 1,370
11. Total Assets $88,427 $79,264
LIABILITIES
12. Deposits, non-interest bearing $14,388 $12,742
Interest bearing 65,835 59,108
13. Short-term borrowing -0- -0-
14. Bank Acceptances outstanding -0- -0-
15. Other liabilities 552 465
16. Long-term debt -0- -0-
17. Commitments and contingent liabilities -0- -0-
18. Minority Interests -0- -0-
SHAREHOLDERS EQUITY
19 & 20. Preferred stock -0- -0-
21. Common Stock 2,992 2,824
22. Other Shareholders equity 4,660 4,125
23. Total Liabilities and Shareholders Equity $88,427 $79,264
Note: Held for Sale amount includes unrealized gain of $2.
-2-
TIMBERLINE BANCSHARES, INC
STATEMENT OF CASH FLOWS
For Periods Indicated
Year Prior Year
to Date to date
03/31/98 03/31/97
Cash Flow from Operating Activities
Net Income $ 190 $ 178
Non-cash items included in income
Depreciation 105 45
Net change in Bad Debt Provision 9 (3)
(Increase)Decrease in:
Other Assets 582 141
Increase(Decrease) in:
Accrued Expenses 11 35
Net cash provided by operations 897 396
Cash Flow from Investing Activities
Increase(Decrease) in:
Deposits 2,665 1,582
(Increase)Decrease in:
Short term investments (14)
Securities - Held For Sale 3,507 (1,991)
- Held to Maturity 92 1,565
Federal Funds Sold (9,400) (1,900)
Loans 1,847 (706)
(Purchase)Sale of Fixed assets 577 (23)
Net cash (used for) provided by
investing activities (1,880) (1,473)
Cash Flow from Financing Activities
Dividends Paid -0- -0-
Additional Paid in Capital -0- 10
Net cash (applied to)provided by
financing activities -0- 10
Net cash increase(decrease) in cash
and due from banks (983) (1,067)
Cash and Due from Banks at
beginning of year 5,224 5,202
Cash and Due from Banks at
end of period $ 4,241 $ 4,135
-3-
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.
Efforts of management will now be concentrated on serving the customer base with
the personal service that only a community oriented bank can offer. It will
maintain and/or enhance the products most suited to the needs of the community
while continuing the profitability of the past 15 years.
(b) Management's Discussion and Analysis of Financial condition and Results of
Operations
As is indicated by the financial statements, the Bank is enjoying a steady
growth in size and maintaining a respectable level of income, as it has enjoyed
in the past.
The changes in income and expense from 1997 to 1998 are minimal in most
categories and can be attributed to the changes in the mix of loans, investments
and deposit growth on the balance sheet. Operating expenses have increased with
addition of personnel commensurate with growth, the cost of regulatory
compliance with the Year 2000, and normal increases due to growth.
The Bank hired an electronic bank officer to streamline it's LAN and Server
networks and to insure that those networks are Y2K compliant. The officer has
been working with the Bank's outside service bureau, vendors, and customers to
ensure compliance.
The Bank has initiated a Visa Debit card program in the first quarter of 1998
for the convenience of it's customers. We will continue to maintain the current
ATM program.
As loan demand remains flat in the bank's local service area, the Bank has
increased activity in it's Oregon Loan Production Office and has begun a loan
participation program with several Oregon Bank's to facilitate their lending and
to increase the Bank's profits. The Bank already enjoys similar relationships
with banks in the central and northern California areas.
At the March meeting, the Board of Directors of the Holding Company, declared
the shareholders of record of March 23, 1998 eligible to vote at the annual
meeting to be held May 9, 1998. Proxy statements and annual reports as
submitted to the SEC with the 10KSB for 1997 were mailed to the shareholders on
April 10, 1998.
-4-
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 4/28/98 ss/Robert J. Youngs
ROBERT J. YOUNGS, PRES. & CEO
Date 4/28/98 ss/Helen L. Gaulden
HELEN. L. GAULDEN, SR. VICE PRES
TREASURER
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