SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
1 QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
OR
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For transition period from ________ to ________
Commission File Number 0-20878
MNB BANCSHARES, INC.
(Exact name of Registrant as specified in its charter)
Delaware
48-1120026
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer Identification Number)
800 Poyntz Avenue, Manhattan, Kansas 66502
(Address of principal executive offices) (Zip Code)
(785) 565-2000
(Registrant's telephone number, including area code)
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 preceding 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 __
Indicate the number of shares outstanding of each
of the Registrant's classes of common stock as of the
latest practicable date: As of August 9, 1999, the
Registrant had outstanding 1,380,395 shares of its
common stock, $.01 par value per share.
MNB BANCSHARES, INC.
Form 10-Q Quarterly Report
Table of Contents
PART I
Page Number
Item 1. Financial Statements and Related Notes 1 - 5
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 6 - 9
Item 3. Quantitative and Qualitative Disclosures
about Market Risk 10
PART II
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of
Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Form 10-Q Signature Page 12
<TABLE>
MNB BANCSHARES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
June 30, December 31,
1999 1998
ASSETS (Unaudited)
<S> <C> <C>
Cash $ 3,109,499 $ 3,875,529
Investment securities:
Held-to-maturity at amortized cost 2,042,213 2,266,343
(estimated fair value of $2,052,000
and $2,296,000 respectively)
Available-for-sale at estimated fair value 45,672,435 48,384,518
Loans, net 79,915,583 75,052,990
Premises and equipment, net 2,191,452 2,231,850
Other assets 3,860,647 4,019,000
Total assets $ 136,791,829 $ 135,830,230
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 108,100,051 $ 115,062,022
Other borrowings 14,361,440 6,529,501
Accrued expenses,
taxes and other liabilities 1,145,099 997,034
Total liabilities 123,606,590 122,588,557
Stockholders' equity:
Common stock, $.01 par, 3,000,000 shares authorized,
1,380,395 and 1,367,976 shares issued and outstanding at
1999 and 1998, respectively 13,804 13,680
Additional paid in capital 8,262,283 8,199,525
Retained earnings 5,264,346 5,021,547
Accumulated other
comprehensive income/(loss) (142,334) 229,272
Unearned employee benefits (212,860) (222,351)
Total stockholders' equity 13,185,239 13,241,673
Total liabilities and
stockholders' equity $ 136,791,829 $ 135,830,230
<FN>
See accompanying notes to condensed consolidated
financial statements.
</TABLE>
<TABLE>
MNB BANCSHARES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
For the Six Months
Ended June 30,
1999 1998
<S> <C> <C>
Interest income:
Loans $ 3,255,134 $ 3,885,762
Investment securities 1,321,015 1,277,417
Other 52,373 217,954
Total interest income 4,628,522 5,381,133
Interest expense:
Deposits 2,168,836 2,636,829
Borrowed funds 255,234 296,676
Total interest expense 2,424,070 2,933,505
Net interest income 2,204,452 2,447,628
Provision for loan losses - 60,000
Net interest income after
provision for loan losses 2,204,452 2,387,628
Noninterest income:
Fees and service charges 392,266 399,232
Gains on sale of loans 89,191 170,300
Gains on sale of investments 7,147 10,795
Other 28,336 43,277
Total noninterest income 516,940 623,604
Noninterest expense:
Compensation and benefits 1,042,242 1,038,997
Occupancy and equipment 294,077 339,500
Federal deposit insurance
premiums 23,534 31,545
Data processing 67,225 78,161
Amortization 114,938 125,646
Advertising 32,482 30,911
Professional fees 79,740 110,786
Stationery, printing
and office supplies 52,765 60,098
Other 386,484 428,274
Total noninterest expense 2,093,487 2,243,918
Earnings before income taxes 627,905 767,314
Income tax expense 213,942 207,808
Net earnings $ 413,963 559,506
Earnings per share:
Basic $ 0.30 $ 0.41
Diluted $ 0.29 $ 0.40
Dividends per share $ 0.125 $ 0.125
<FN>
See accompanying notes to condensed
consolidated financial statements
</TABLE>
<TABLE>
MNB BANCSHARES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF EARNINGS
(Unaudited)
<CAPTION>
For the Three Months
Ended June 30,
<S> <C> <C>
1999 1998
Interest income:
Loans $ 1,657,140 $ 1,888,817
Investment securities 647,499 655,893
Other 20,629 101,177
Total interest income 2,325,268 2,645,887
Interest expense:
Deposits 1,063,645 1,306,255
Borrowed funds 135,593 145,554
Total interest expense 1,199,238 1,451,809
Net interest income 1,126,030 1,194,078
Provision for loan losses - 30,000
Net interest income after
provision for loan losses 1,126,030 1,164,078
Noninterest income:
Fees and service charges 210,828 195,168
Gains on sale of loans 36,388 108,574
Gains on sale of investments 5,500 10,795
Other 9,837 19,484
Total noninterest income 262,553 334,021
Noninterest expense:
Compensation and benefits 527,724 546,401
Occupancy and equipment 146,714 174,030
Federal deposit insurance
premiums 11,437 17,102
Data processing 33,429 35,952
Amortization 55,588 61,775
Advertising 22,518 15,238
Professional fees 37,130 61,571
Stationery, printing
and office supplies 32,223 38,024
Other 186,877 224,136
Total noninterest expense 1,053,640 1,174,229
Earnings before income taxes 334,943 323,870
Income tax expense 115,440 63,949
Net earnings $ 219,503 $ 259,921
Earnings per share:
Basic $ 0.16 $ 0.19
Diluted 0.16 $ 0.18
Dividends per share $ 0.0625 $ 0.0625
<FN>
See accompanying notes to condensed consolidated
financial statements.
</TABLE>
MNB BANCSHAES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
1999 1998
<S> <C> <C>
Net cash provided by
operating activities $ 1,222,675 $ 2,271,456
INVESTING ACTIVITIES
Net (increase) decrease in loans (5,030,905) 5,895,290
Maturities and prepayments
of investments held to maturity 134,654 3,297,458
Maturities and prepayments
of investments available for sale 8,782,480 5,672,472
Proceeds from sale of
investments available for sale 5,049,734 1,228,736
Proceeds from sale of
investments held to maturity 102,317 -
Purchase of investments
available for sale (11,747,633) (14,741,833)
Proceeds from sale of
foreclosed assets 50,000 16,185
Net proceeds from sale
of Beloit branch - 973,283
Purchases of premises
and equipment, net (100,529) (142,799)
Net cash provided by
(used in) investing activities (2,759,882) 2,198,792
FINANCING ACTIVITIES
FHLB advances (repayment), net 8,491,430 (642,856)
Net decrease in deposits (6,961,971) (4,983,147)
Net decrease in securities
sold under agreements to repurchase - (60,284)
Issuance of common stock
under stock option plan 62,882 75,013
Payment of dividends (171,164) (161,491)
Repayment on note payable (650,000) -
Net cash provided by
(used in) financing activities 771,177 (5,772,765)
Net decrease in cash (766,030) (1,302,515)
Cash at beginning of period 3,875,529 6,698,451
Cash at end of period $ 3,109,499 $ 5,395,934
Supplemental disclosure of cash flow information:
Cash paid during period
for interest $ 2,426,717 $ 2,950,716
Cash paid during period
for taxes $ 42,069 $ 759,634
Supplemental schedule of noncash investing activities:
Transfer of loans to
real estate owned $ 50,000 -
<FN>
See accompanying notes to condensed consolidated
financial statements.
</TABLE>
MNB BANCSHARES, INC. AND
SUBSIDIARIES
Notes to Condensed Consolidated Financial
Statements
1. Interim Financial Statements
The condensed consolidated financial
statements of MNB Bancshares, Inc. (the
"Company") and subsidiaries have been prepared
in accordance with the instructions to Form 10-Q.
To the extent that information and footnotes
required by generally accepted accounting
principles for complete financial statements are
contained in or consistent with the audited financial
statements incorporated by reference in the
Company's Form 10-K for the year ended December
31, 1998, such information and footnotes have not
been duplicated herein. In the opinion of
management, all adjustments, consisting of normal
recurring accruals, considered necessary for a fair
presentation of financial statements have been
reflected herein. The December 31, 1998
condensed consolidated balance sheet has been
derived from the audited balance sheet as of that
date. The results of the interim periods ended June
30, 1999 are not necessarily indicative of the results
expected for the year ended December 31, 1999.
2. Earnings Per Share
Basic earnings per share have been
computed based upon the weighted average number
of common shares outstanding during each year.
Diluted earnings per share include the effect of all
potential common shares outstanding. Earnings per
share for all periods presented have been adjusted
retroactively to give effect to the 5% stock
dividends paid by the Company annually since
1994.
The shares used in the calculation of basic
and diluted income per share are shown below:
<TABLE>
<CAPTION>
For the quarters For the six months
ended June 30, ended June 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Weighted
average common
shares outstanding 1,373,127 1,363,151 1,371,287 1,356,830
Stock options 42,996 56,317 44,921 59,189
Total 1,416,123 1,419,468 1,416,208 1,416,019
</TABLE>
3. Comprehensive Income
The Company adopted SFAS No. 130,
"Reporting Comprehensive Income", in the first
quarter of 1998. SFAS No. 130 requires the
reporting of comprehensive income and its
components. Comprehensive income is defined as
the change in equity from transactions and other
events and circumstances from non-owner sources
and excludes investments by and distributions to
owners. Comprehensive income includes net
income and other items of comprehensive income
meeting the above criteria. The Company's only
component of other comprehensive income is
the unrealized holding gains and losses on available
for sale securities.
<TABLE>
<CAPTION>
For the quarters For the six months
ended June 30, ended June 30,
<S> <C> <C> <C> <C>
1999 1998 1999 1998
Net income $ 219,503 $ 259,921 $ 413,963 $ 559,506
Unrealized holding gains (losses) (406,692) (28,824) (592,217) 15,319
Less - reclassification
adjustment for gain
included in net earnings 5,500 10,795 7,147 10,795
Net unrealized gains
(losses) on securities (412,192) (39,619) (599,364) 4,524
Income tax expense (benefit) (156,633) (15,055) (227,758) 1,719
Total comprehensive income $ 36,056 $ 235,357 $ 42,357 $ 562,311
</TABLE>
MNB BANCSHARES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
General. MNB Bancshares, Inc. (the
"Company") is a bank holding company
incorporated under the laws of the State of
Delaware and is engaged in the banking business
through its wholly-owned subsidiary, Security
National Bank (the "Bank"). The home office for
the Bank is Manhattan, Kansas, with branches
operating in Auburn, Osage City, and Topeka,
Kansas. The Company sold a branch in Beloit,
Kansas during June 1998, which included
approximately $3.3 million of loans and $2.8
million of deposits. In addition, just prior to the
sale, public funds of approximately $3.0 million
were withdrawn from the Beloit branch. The
Company's results of operations depend primarily
on net interest income, which is the difference
between interest income from interest-earning assets
and interest expense on interest-bearing liabilities.
The Company's operations are also affected by non-
interest income, such as service charges, loan fees
and gains and losses from the sale of newly
originated loans. The Company's principal
operating expenses, aside from interest expense,
consist of compensation and employee benefits,
occupancy costs, federal deposit insurance costs,
data processing expenses and provision for loan
losses.
Net earnings for the first six months of 1999
decreased $145,543, or 26.0%, to $413,963 as
compared to the first six months of 1998. Net
interest income decreased $183,177, or 7.7%, from
$2,387,627, to $2,204,452. Noninterest income
decreased $106,664, or 17.1%, from $623,604 to
$516,940, due to a decrease in gains on sale of
loans. Noninterest expense decreased $150,433 or
6.7%.
Net earnings for the second quarter of 1999
decreased 15.6% to $219,503 in comparison to the
same period in 1998. Net interest income decreased
from $1,164,078 to $1,126,030, or 3.3%, during this
period. Noninterest income decreased 21.4% to
$262,553 compared to $334,021 as a result of gains
on sale of loans declining. Noninterest expense
declined $120,589, or 10.3%.
Interest Income. Interest income decreased
$752,612, or 14.0%, to $4.6 million from $5.4
million in the first six months of 1998. The majority
of this decline was attributable to a significant
decrease in residential real estate loans beginning in
the second quarter of 1998. While June 30, 1999
and 1998 loan totals were comparable, the average
loan balance for the first six months of 1999 was
$76.2 million compared to $85.7 million for the first
six months of 1998.
Interest income for the second quarter of
1999 decreased by $320,619, or 12.1% compared to
the same period of 1998. Average loans for the
second quarter of 1999 were $78.0 million
compared to average loans of $83.3 million for the
second quarter of 1998. However, it is expected
that average loans in the third quarter of 1999 will
exceed the comparable 1998 period.
Interest Expense. As compared to the same
period a year earlier, interest expense during the
first six months of 1999 decreased by $509,435, or
17.4%. Interest expense on deposits decreased
$467,993, or 17.8% while interest expense on
borrowings, consisting of advances from the Federal
Home Loan Bank of Topeka (the "FHLB") and
funds borrowed for acquisitions decreased $41,442,
or 14.0%, during this time period. Interest expense
decreased as a result of a decline in interest rates, a
decline in deposits resulting from the Beloit branch
sale, and the principal repayments on the
Company's note payable.
Interest expense for the second quarter of
1999 decreased 17.4% to $1.2 million from $1.5
million in 1998. Deposit interest expense decreased
$242,610, or 18.6%, to $1.1 million. These
decreases were the result of the decline in interest
rates, the sale of the Beloit branch ($6.8 million in
deposits) and the principal repayments on the
Company's note payable.
Provision for Loan Losses. The Company
did not make a provision for loan losses for the first
six months of 1999, as a result of the strong credit
quality of the loan portfolio. The provision for loan
losses was $60,000 in the first six months of 1998.
At June 30, 1999, the allowance for loan losses was
$1,274,379, or 1.6% of gross loans outstanding,
compared to $1,341,912, or 1.7% of gross loans
outstanding, at June 30, 1998. The allowance for
loan losses was $1.3 million at December 31, 1998,
or 1.7% of gross loans outstanding.
Noninterest Income. Noninterest income
decreased $106,664, or 17.1%, for the first six
months of 1999 to $516,940 compared to the same
period in 1998, as gains on sales of loans in the first
six months declined $81,109 below the comparable
period in 1998. Noninterest income for the second
quarter of 1999 decreased 21.4% to $262,553
compared to $334,021 for the second quarter in
1998. Contributing to this decrease was a decline in
gains on sale of loans of $72,186, offset by an
increase in fee and service charge income of
$15,660.
Noninterest Expense. Noninterest expense
decreased $150,433, or 6.7%, to $2.1 million for the
first six months of 1999 over the same period in
1998. Noninterest expense decreased $120,589, or
10.3% for the second quarter of 1999 compared to
the same period in 1998 resulting from reduced
expenses for compensation and benefits, occupancy
and equipment and professional fees.
Asset Quality and Distribution. The
Company's total assets remained stable at $136.8
million at June 30, 1999 compared to $135.8
million at December 31, 1998. The Company's
primary ongoing sources of funds are deposits,
proceeds from principal and interest payments on
loans and investment securities and proceeds from
the sale of mortgage loans and investment
securities. While maturities and scheduled
amortization of loans are a predictable source of
funds, deposit flows and mortgage prepayments are
greatly influenced by general interest rates,
economic conditions, competition, and the
restructuring of the financial services industry.
The primary investing activities of the
Company are the origination of mortgage,
consumer, and commercial loans and the purchase
of investment and mortgage backed securities.
Generally, the Company originates long term fixed
rate residential mortgage loans for immediate sale
and does not warehouse loans to speculate on
interest rates.
Management believes that the quality of the
loan portfolio continues to be strong, as evidenced
by the small number and amount of loans past due
one month or more. As of June 30, 1999, eleven
real estate loans were more than one month past due
with a total balance of $724,452, which was 0.9%
of total loans outstanding. Seven of these loans,
totaling $532,994, were on non-accrual status as of
June 30, 1999. With the exception of guaranteed
student loans, five consumer loans totaling $46,521,
or 0.1%, were over one month past due as of June
30, 1999 and two of these loans with a
balance of $11,411 were on non-accural.
Additionally, thirteen commercial loans totaling
$239,126, or 0.3%, were past due. No commercial
loans were on non-accrual status.
During the six months ended June 30, 1999,
the Company purchased investment securities
available for sale in the amount of $11.7 million.
These activities were funded primarily by maturities
and sales of investment securities of $14.1 million.
Liability Distribution. At June 30, 1999,
total deposits had a net decrease of $7.0 million
from December 31, 1998, while borrowings
increased $7.8 million. The change in the liability
mix is primarily related to daily fluctuations
experienced on the deposit balances maintained by
our public funds providers.
Noninterest bearing demand accounts at the
end of the second quarter of 1999 totaled $9.5
million, or 8.8% of deposits, compared to
approximately 8.1%, or $9.3 million at December
31, 1998. Certificates of deposit decreased to $52.5
million at June 30, 1999 from $54.2 million, or
3.1%. Money market and NOW accounts decreased
12.9% from December 31, 1998 to $35.9 million
from $41.2 million, and were 33.2% of total
deposits, while savings accounts also decreased
from $10.3 million to $10.1 million. The decrease
in money market and NOW accounts primarily
resulted from the fluctuating balances of public
funds providers accounts.
Liquidity. The Company's most liquid assets
are cash and cash equivalents and investment
securities available for sale. The level of these
assets are dependent on the Company's operating,
financing, lending and investing activities during
any given period. At June 30, 1999, and December
31, 1998 respectively, these liquid assets totaled
$48.8 million and $52.3 million. During periods in
which the Company is not able to originate a
sufficient amount of loans and/or periods of high
principal prepayments, the Company increases its
liquid assets by investing in short-term U. S.
Government and agency securities.
Liquidity management is both a daily and
long-term function of management strategy. Excess
funds are generally invested in short-term
investments. In the event the Company requires
funds beyond its ability to generate them internally,
additional funds are generally available through the
use of FHLB advances, a line of credit with the
FHLB or through sales of securities. At June 30,
1999, the Company had outstanding FHLB
advances of $4.4 million and had $8.7 million
outstanding on its $15 million line of credit.
Additionally, the Company has guaranteed a loan
made to the Company's Employee Stock Ownership
Plan (the "ESOP") with an outstanding balance of
$212,860 at June 30, 1999, to fund the ESOP's
purchase of shares in the Company's common stock
offering in 1993. The total borrowings by the
Company were $14.4 million at June 30, 1999,
compared to $6.5 million at December 31, 1998.
Capital. The Federal Reserve Board has
established capital requirements for bank holding
companies which generally parallel the capital
requirements for national banks under the Office of
the Comptroller of the Currency (the "OCC")
regulations. The regulations provide that such
standards will generally be applied on a bank-only (rather
than a consolidated) basis in the case of a bank
holding company with less than $150 million in
total consolidated assets, such as the Company.
The Company's total capital of $13.2 million
is, however, well in excess of the Federal Reserve
Board's consolidated minimum capital
requirements.
At June 30, 1999, the Bank continued to
maintain a sound Tier 1 capital ratio of 8.78% and a
risk based capital ratio of 15.98%. As shown by the
following table, the Bank's capital exceeded the
minimum capital requirements (dollars in
thousands):
<TABLE>
<CAPTION>
June 30, 1999
Amount Percent Required
<S> <C> <C> <C>
Tier 1 Capital $12,014 8.78% 4.00%
Risk Based Capital 13,033 15.98% 8.00%
</TABLE>
Banks and bank holding companies are
generally expected to operate at or above the
minimum capital requirements. The above ratios
are well in excess of regulatory minimums and
should allow the Company to operate without
capital adequacy concerns. The Federal Deposit
Insurance Corporation Improvement Act of 1991
establishes a bank rating system based on the capital
levels of banks. The Bank is rated "well
capitalized", which is the highest rating available
under this capital-based rating system.
Year 2000 Compliance. The Company
utilizes and is dependent upon data processing
systems and software to conduct its business. The
data processing systems and software include those
developed and maintained by the Company's data
processing provider and purchased software which
is run on in-house computer networks. In 1997, the
Company established a committee and initiated a
review and assessment of all hardware and software
to confirm that it will function properly in the Year
2000.
The Company's data processing provider
and those vendors providing mission critical
systems and software which have been contacted
have indicated their hardware and/or software is
Year 2000 compliant. Testing of the mission
critical systems and software was completed as of
December 31, 1998. Testing on non-mission
critical items was completed as of March 31, 1999.
Additionally, alarms, elevators, heating and cooling
systems, and other computer-controlled mechanical
devices on which the Company relies have been
evaluated and no significant problems are
anticipated with such systems.
While there will be expenses incurred during
the year, the Company has not identified any
situations at this time that it anticipates will require
material expenditures in order to become fully
compliant. It is currently estimated that total Year
2000 costs could be approximately $150,000,
almost all of which has already been recognized and
of which a material component was the reallocation
of existing employee time to the Year 2000 project.
In the event utility company services to the
Company are significantly curtailed or interrupted,
it would have an adverse effect on the Company's
ability to conduct its business. However, the Year
2000 problem is pervasive and complex and can
potentially affect any computer process.
Accordingly, no assurance can be given that Year
2000 compliance can be achieved without
additional unanticipated expenditures and
uncertainties that might affect future financial
results.
An analysis has been done of the Company's
borrowing customers. The Company has initiated a
program to communicate with identified key bank
customers to ensure they are properly prepared for
the Year 2000. The Company does not anticipate
that these credit customers will cause serious
adverse consequences on the operations of the
Company. This same analysis has been performed
for large depositors and funds providers with similar
results.
A contingency and business resumption plan
has been developed and tested by the Company to
provide for reducing the business interruption of
normal business operation in the event of a Year
2000 related failure. This plan continues to be
evaluated and revised if necessary, based on testing
results and vendor notifications.
MNB BANCSHARES, INC. AND SUBSIDIARIES
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
The Company's assets and liabilities are
principally financial in nature and the resulting net
interest income thereon is subject to changes in
market interest rates and the mix of various assets
and liabilities. Interest rates in the financial markets
affect the Company's decision on pricing its assets
and liabilities which impacts net interest income, a
significant cash flow source for the Company. As a
result, a substantial portion of the Company's risk
management activities relates to managing interest
rate risk.
The Company's Asset/Liability
Management Committee monitors the interest rate
sensitivity of the Company's balance sheet using
earnings simulation models and interest sensitivity
GAP analysis. The Company has set policy limits
of interest rate risk to be assumed in the normal
course of business and monitors such limits through
its simulation process.
The Company has been successful in
meeting the interest rate sensitivity objectives set
forth in its policy. Simulation models are prepared
to determine the impact on net interest income for
the coming twelve months, including one using
rates at May 31, 1999 and forecasting volumes for
the twelve month projection. This position is then
subjected to a shift in interest rates of 200 basis
points rising and 200 basis points falling with an
impact to the Company's net interest income for the
next 12 month period as follows:
<TABLE>
<CAPTION>
$ change in net interest % of net
Scenario income int. income
<S> <C> <C>
200 basis point rising ($147,600) (4.45%)
200 basis point falling ($185,000) (5.58%)
The Company believes that no significant
changes in its interest rate sensitivity position have
occurred since May 31, 1999. The Company also
believes it is appropriately positioned for future
interest rate movements, although it may experience
some fluctuations in net interest income due to short
term timing differences between the repricing of
assets and liabilities.
Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995. This
quarterly report contains certain forward looking
statements within the meaning of Section 27A of
the Securities Act of 1933, as amended and Section
21E of the Securities Exchange Act of 1934, as
amended. The Company intends such forward-
looking statements to be covered by the safe harbor
provisions for forward-looking statements contained
in the Private Securities Reform Act of 1995, and is
including this statement for purposes of these safe
harbor provisions. Forward-looking statements,
which are based on certain assumptions and
describe future plans, strategies and expectations of
the Company, are generally identifiable by use of
the words "believe," "expect," "intend,"
"anticipate," "estimate," "project" or similar
expressions. The Company's ability to predict
results or the actual effect of future plans or
strategies is inherently uncertain. Factors which
could have a material adverse affect on the
operations and future prospects of the Company and
the subsidiary include, but are not limited to,
changes in: interest rates, general economic
conditions, legislative/regulatory changes, monetary
and fiscal policies of the U.S. Government,
including policies of the U.S. Treasury and the
Federal Reserve Board, the quality or composition
of the loan or investment portfolios, demand for
loan products, deposit flows, competition, demand
for financial services in the Company's market area
and accounting principles, policies and guidelines.
These risks and uncertainties should be considered
in evaluating forward-looking statements and undue
reliance should not be placed on such statements.
Further information concerning the Company and
its business, including additional factors that could
materially affect the company's financial results, is
included in the Company's filings with the
Securities and Exchange Commission.
MNB BANCSHARES, INC. AND
SUBSIDIARIES
PART II
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal
proceedings to which the Company
or its subsidiaries is a party other
than ordinary routine litigation
incidental to their respective
businesses.
ITEM 2. CHANGES IN SECURITIES.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO
VOTE OF SECURITY HOLDERS.
On May 19, 1999, the annual
meeting of stockholders was held.
At the meeting, Patrick L.
Alexander, Joseph L. Downey and
Jerry R. Pettle were elected to serve
as Class I directors with terms
expiring in 2002. Continuing as
Class II directors (term expires in
2000) are Susan E. Roepke and
Donald J. Wissman and continuing
as Class III directors (term expires in
2001) are Brent A. Bowman, Charles
D. Green and Vernon C. Larson. The
stockholders also ratified the
appointment of KPMG LLP as the
Company's independent public
accountants for the year ending
December 31, 1999.
There were 1,370,638 issued and
outstanding shares of Common Stock at the
time of the annual meeting. The voting
on each item at the annual meeting was as
follows:
</TABLE>
<TABLE>
<CAPTION>
For Withheld/ Broker
Against Abstain Non-Votes
<S> <C> <C> <C> <C>
Patrick L. Alexander 1,183,944 27,428
Joseph L. Downey 1,203,315 8,057
Jerry R. Pettle 1,201,516 9,856
KPMG LLP 1,152,328 4,200 29,321
</TABLE>
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
A. Exhibits
Exhibit 27. Financial Data Schedule.
B. Reports on Form 8-K
None
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.
MNB BANCSHARES, INC.
Date: August 11, 1999 /s/Patrick L. Alexander
President and Chief Executive Officer
Date: August 11, 1999 /s/Mark A. Herpich
Chief Financial Officer and Treasurer
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 3,109,499
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 45,672,435
<INVESTMENTS-CARRYING> 2,042,213
<INVESTMENTS-MARKET> 2,052,000
<LOANS> 79,915,583
<ALLOWANCE> 1,274,379
<TOTAL-ASSETS> 136,791,829
<DEPOSITS> 108,100,051
<SHORT-TERM> 8,670,000
<LIABILITIES-OTHER> 1,145,099
<LONG-TERM> 5,691,440
0
0
<COMMON> 13,804
<OTHER-SE> 13,171,435
<TOTAL-LIABILITIES-AND-EQUITY> 136,791,829
<INTEREST-LOAN> 3,255,134
<INTEREST-INVEST> 1,321,015
<INTEREST-OTHER> 52,373
<INTEREST-TOTAL> 4,628,522
<INTEREST-DEPOSIT> 2,168,836
<INTEREST-EXPENSE> 2,424,070
<INTEREST-INCOME-NET> 2,204,452
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 7,147
<EXPENSE-OTHER> 2,093,487
<INCOME-PRETAX> 627,905
<INCOME-PRE-EXTRAORDINARY> 413,963
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 413,963
<EPS-BASIC> .30
<EPS-DILUTED> .29
<YIELD-ACTUAL> 3.45
<LOANS-NON> 544,404
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,291,901
<CHARGE-OFFS> 53,726
<RECOVERIES> 36,204
<ALLOWANCE-CLOSE> 1,274,379
<ALLOWANCE-DOMESTIC> 915,834
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 358,545
</TABLE>
