SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
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 (I.R.S. Employer Identification Number)
of incorporation or organization)
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 May 8, 2000, the Registrant had outstanding 1,444,021
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 - 10
Item 3. Quantitative and Qualitative Disclosures about 11
Market Risk
PART II
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of
Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Form 10-Q Signature Page 14
MNB BANCSHARES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
March 31, December
31,
2000 1999
ASSETS
<S> <C> <C>
(Unaudited)
Cash and cash equivalents $2,788,113 $4,315,013
Investment securities:
Held-to-maturity at amortized cost 1,499,027 1,603,268
(estimated fair value of $1,497,000
and $1,602,000 respectively)
Available-for-sale at estimated fair value 44,099,536 43,402,200
Loans, net 88,539,535 87,720,201
Premises and equipment, net 2,280,603 2,288,028
Other assets 4,045,531 3,933,590
---------- ----------
Total assets $143,252,345 $143,262,300
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $113,780,895 112,336,329
Other borrowings 14,819,352 16,698,857
Accrued expenses, taxes and other liabilities 1,343,149 936,730
----------- -----------
Total liabilities 129,943,396 129,971,916
----------- -----------
Stockholders' equity:
Common stock, $.01 par, 3,000,000 shares
authorized, 1,449,702 and 1,449,303 shares issued
and outstanding at 2000 and 1999, respectively 14,497 14,493
Additional paid in capital 9,015,037 9,011,899
Treasury stock, at cost, 5,681 and 0 shares
at 2000 and 1999, respectively (45,448) -
Retained earnings 4,952,066 4,821,937
Accumulated other comprehensive income (456,433) (384,098)
Unearned employee benefits (170,770) (173,847)
----------- ----------
Total stockholders' equity 13,308,949 13,290,384
----------- -----------
Total liabilities and stockholders' equity $143,252,345 $143,262,300
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
MNB BANCSHARES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
<TABLE>
<S> <C> <C>
For the Three Months
Ended March 31,
2000 1999
Interest income:
Loans $ 1,905,825 $1,597,994
Investment securities 631,574 696,862
Other 9,115 8,379
----------- -----------
Total interest income 2,546,514 2,303,253
Interest expense:
Deposits 1,148,036 1,105,191
Borrowed funds 223,562 119,641
----------- -----------
Total interest expense 1,371,598 1,224,832
Net interest income 1,174,916 1,078,421
Provision for loan losses 15,000 -
----------- -----------
Net interest income after
provision for loan losses 1,159,916 1,078,421
Noninterest income:
Fees and service charges 213,806 181,438
Gains on sale of loans 14,318 52,803
Other 17,018 20,146
----------- -----------
Total noninterest income 245,142 254,387
Noninterest expense:
Compensation and benefits 555,898 514,519
Occupancy and equipment 161,719 147,363
Amortization 55,558 59,349
Data processing 35,061 33,796
Other 271,817 284,819
----------- -----------
Total noninterest expense 1,080,083 1,039,846
Earnings before income taxes 324,975 292,962
Income tax expense 104,264 98,502
----------- -----------
Net earnings $ 220,711 $194,460
Earnings per share:
Basic $ 0.15 $ 0.14
Diluted $ 0.15 $ 0.13
Dividends per share $ 0.0625 $ 0.0625
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
MNB BANCSHAES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<S> <C> <C>
For the Three Months
Ended March 31,
2000 1999
Net cash provided by operating activities $ 986,095 $ 793,883
INVESTING ACTIVITIES
Net increase in loans (1,135,009) (804,035)
Maturities and prepayments of
investments held to maturity 102,970 5,184
Maturities and prepayments of
investments available for sale 3,334,737 5,298,792
Proceeds from sale of investments
available for sale - 1,101,438
Proceeds from sale of investments held
to maturity - 102,317
Purchase of investments available for sale (4,171,956) (6,171,414)
Improvements of real estate owned (8,659) -
Purchases of premises and equipment, net (70,328) (19,065)
---------- ----------
Net cash used in investing activities (1,948,245) (486,783)
FINANCING ACTIVITIES
Net increase (decrease) in deposits 1,444,566 (3,734,019)
Federal Home Loan Bank borrowings
(repayment), net (1,976,428) 3,398,573
Purchase of treasury stock (45,448) -
Issuance of common stock under stock
option plan 3,142 10,428
Payment of dividends (90,582) (85,499)
Proceeds (repayments) on note payable 100,000 (650,000)
----------- ---------
Net cash used in financing activities (564,750) (1,060,517)
Net decrease in cash (1,526,900) (753,417)
Cash at beginning of period 4,315,013 3,875,529
----------- -----------
Cash at end of period $ 2,788,113 $ 3,122,112
Supplemental disclosure of cash flow
information:
Cash paid during period for interest $ 1,343,978 $ 1,212,238
Cash paid during period for taxes $ - $ -
Supplemental schedule of noncash investing
activities:
Transfer of loans to real estate owned $ 98,000 $ 50,000
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</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,
1999, 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, 1999 condensed consolidated balance sheet has been
derived from the audited balance sheet as of that date. The results
of the interim period ended March 31, 2000 are not necessarily
indicative of the results expected for the year ended December 31,
2000.
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 during each year. Earnings per share for
all periods presented have been adjusted 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, which have been restated for the annual 5% stock dividends
are shown below:
<TABLE>
<CAPTION>
<S> <C> <C>
For the quarters ended
March 31,
2000 1999
Weighted average common shares
outstanding 1,448,746 1,438,333
Stock options 32,687 40,092
Total 1,481,432 1,478,425
</TABLE>
3. Comprehensive Income
The Company's only component of other comprehensive income is
the unrealized holding gains and losses on available for sale
securities.
<TABLE>
<CAPTION>
<S> <C> <C>
For the three
months ended
March 31,
2000 1999
Net income $220,711 $194,460
Unrealized holding losses
Less - reclassification adjustment (116,670) (185,525)
for gain included on net income - 1,647
Net unrealized losses on
securities (116,670) (187,172)
Income tax benefit (44,335) (71,125)
Total comprehensive income $148,376 $78,413
</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, Manhattan,
Osage City, and Topeka, Kansas. On January 6, 2000, the Company
opened an in-store supermarket branch in Manhattan, Kansas. The
Company also announced an agreement to purchase the Wamego and Osage
City, Kansas branches of Commercial Federal Bank on March 29, 2000.
The Company expects the closing date of this purchase transaction to
occur early in the third quarter of this year. 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 three months of 2000 increased
$26,251, or 13.5%, to $220,711 as compared to the first three months
of 1999. Net interest income increased $96,495, or 8.9%, from
$1,078,421, to $1,174,916. This improvement in net earnings and net
interest income was generally attributable to growth in commercial,
commercial real estate and retail loan portfolios resulting in an
increase of approximately $13 million in net loans outstanding from
March 31,1999. Noninterest income decreased $9,245, or 3.6%, from
$254,387 to $245,142, due to a decrease in gain on sales of loans.
Noninterest expense increased $40,237 or 3.9%, relating primarily to
the opening during January 2000 of our first supermarket branch in
west Manhattan.
Interest Income. Interest income increased $243,261, or 10.6%,
to $2.5 million from $2.3 million in the first quarter of 1999. This
increase was primarily related to the strong growth in our loan
portfolio, along with increased yields on our investment portfolio.
Average loans for the first quarter of 2000 were $88.6 million
compared to average loans of $74.4 million for the first quarter of
1999.
Interest Expense. As compared to the same period a year
earlier, interest expense during the first three months of 2000
increased by $146,766, or 12.0%. Interest expense on deposits
decreased $42,845, or 3.9% while interest expense on borrowings,
consisting of advances from the Federal Home Loan Bank of Topeka
(the 'FHLB') and funds borrowed for acquisitions increased $103,921, or
86.9%, during this time period. Interest expense increased as a
result of an increase in interest rates and additional borrowings
from the FHLB, offset partially by principal repayments on the
Company's note payable.
MNB BANCSHARES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Provision for Loan Losses. The Company's provision for loan
losses for the first quarter of 2000 was $15,000, compared to no
provision during the first quarter of 1999. While the Company's loan
portfolio quality remains strong, management's review of the
portfolio coupled with the increase in loans experienced during 1999
and 2000 prompted an increased provision. At March 31, 2000, the
allowance for loan losses was $1,264,348, or 1.4% of gross loans
outstanding, compared to $1,269,574, or 1.7% of gross loans
outstanding, at March 31, 1999. The allowance for loan losses was
$1.2 million at December 31, 1999, or 1.4% of gross loans outstanding.
Noninterest Income. Noninterest income decreased $9,245, or
3.6%, for the first three months of 2000 to $245,142 compared to the
same period in 1999. This decrease was primarily due to a decline of
72.9% in gains on sale of loans from $52,803 to $14,318 resulting
from the increase in home mortgage rates. Offsetting this decline
was an increase in fees and service charges from $181,438 to
$213,806, of which approximately $23,000 was attributable to an
increase in overdraft fee income.
Noninterest Expense. Noninterest expense increased $40,237, or
3.9%, to $1.1 million for the first three months of 2000 over the
same period in 1999 resulting from increased expenses for
compensation and benefits, advertising, and occupancy and equipment.
These increased expense categories, related primarily to
approximately $53,000 associated with the grand opening and operating
expenses of our new Dillons branch which opened in January 2000, were
partially offset by reductions in professional fees and federal
deposit insurance premiums.
Asset Quality and Distribution. The Company's total assets
remained stable at $143.3 million at March 31, 2000 and at December
31, 1999. 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. During the
first three months of 2000, the Company originated mortgage loans in
the amount of $2.4 million compared to $5.0 million during the first
three months of 1999. 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 March 31, 2000, twenty-one
real estate loans were more than one month past due with a total
balance of $1,200,640, which was 1.4% of total loans outstanding.
Eight of these loans, totaling $351,967, were on non-accrual status
as of March 31, 2000. With the exception of guaranteed student
loans, fourteen consumer loans totaling $93,125, or 0.1%, were over
one month past due as of March 31, 2000 and two of these loans with a
balance of $20,881 were on non-accrual. Additionally, four
commercial loans totaling $220,103, or 0.2%, were past due. One of
these commercial loans totaling $51,919 was on non-accrual status.
MNB BANCSHARES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
During the three months ended March 31, 2000, the Company
purchased investment securities available for sale in the amount of
$4.2 million. These activities were funded primarily by maturities
of investment securities of $3.4 million, along with deposits and
proceeds from the sale of fixed rate mortgage loans.
Liability Distribution. At March 31, 2000, total deposits had a
net increase of $1.4 million from December 31, 1999, while borrowings
decreased $1.9 million. The change in the liability mix was
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 first
quarter of 2000 totaled $10.1 million, or 8.9% of deposits, compared
to approximately 9.0%, or $10.1 million at December 31, 1999.
Certificates of deposit increased to $57.0 million at March 31, 2000
from $55.1 million, or 3.4%. Money market and NOW accounts decreased
2.3% from December 31, 1999 to $36.2 million from $37.1 million, and
were 31.8% of total deposits, while savings accounts increased from
$10.0 million to $10.4 million. The decrease in money market and NOW
accounts primarily resulted from the fluctuating balances of our
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 March
31, 2000, and December 31, 1999 respectively, these liquid assets
totaled $46.9 million and $47.7 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 March 31,
2000, the Company had outstanding FHLB advances of $13.7 million and
had no borrowings outstanding on its $17.5 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 $170,770 at March 31, 2000, to fund the ESOP's purchase of
shares in the Company's common stock offering in 1993. The total
borrowings by the Company were $14.8 million at March 31, 2000,
compared to $16.7 million at December 31, 1999.
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.
MNB BANCSHARES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
The Company's total capital of $13.3 million is, however, well in
excess of the Federal Reserve Board's consolidated minimum capital
requirements.
At March 31, 2000, the Bank continued to maintain a sound Tier 1
capital ratio of 8.77% and a risk based capital ratio of 15.57%. As
shown by the following table, the Bank's capital exceeded the minimum
capital requirements (dollars in thousands):
<TABLE>
<CAPTION>
March 31, 2000
<S> <C> <C> <C>
Amount Percent Required
Tier 1 Capital $12,559 8.77% 4.00%
Risk Based
Capital 13,655 15.57% 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.
Recent Accounting Developments. The Financial Accounting
Standards Board ('FASB') issued Statements of Financial Accounting
Standards ('SFAS') No. 133, 'Accounting for Derivative Instruments
and Hedging Activities,' in June 1998. SFAS No. 133 establishes
accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts,
and for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. This
statement, as amended by SFAS No. 137, is effective for all fiscal
quarters beginning after June 15, 2000. Management believes adoption
of SFAS Nos. 133 and 137 will not have a material effect on the
Company's financial position or results of operations, nor will
adoption require additional capital resources.
Recent Regulatory Developments. On November 12, 1999, President
Clinton signed legislation that will allow bank holding companies to
engage in a wider range of non-banking activities, including greater
authority to engage in securities and insurance activities. Under the
Gramm-Leach-Bliley Act (the 'Act'), a bank holding company that
elects to become a financial holding company may engage in any
activity that the Board of Governors of the Federal Reserve System
(the 'Federal Reserve'), in consultation with the Secretary of the
Treasury, determines by regulation or order is financial in nature,
incidental to any such financial activity, or complementary to any
such financial activity and does not pose a substantial risk to the
safety or soundness of depository institutions or the financial
system generally. The Act specifies certain activities that are
deemed to be financial in nature, including lending, exchanging,
transferring, investing for others, or safeguarding money or
securities; underwriting and selling insurance; providing financial,
investment, or economic advisory services; underwriting, dealing in
or making a market in, securities; and any activity currently
permitted for bank holding companies by the Federal Reserve under
section 4(c)(8) of the Bank Holding Company Act. A bank holding
company may elect to be treated as a financial holding company only
if all depository institution subsidiaries of the holding company are
well-capitalized, well-managed and have at least a satisfactory
rating under the Community Reinvestment Act.
National banks are also authorized by the Act to engage, through
'financial subsidiaries,' in any activity that is permissible for
financial holding companies (as described above) and any activity
that the Secretary of the Treasury, in consultation with the Federal
Reserve, determines is financial in nature or incidental to any such
financial activity, except (i) insurance underwriting, (ii) real
estate development or real estate investment activities (unless
otherwise expressly permitted by law), (iii) insurance company
portfolio investments and (iv) merchant banking. The authority of a
national bank to invest in a financial subsidiary is subject to a
number of conditions, including, among other things, requirements
that the bank must be well-managed and well-capitalized (after
deducting from capital the bank's outstanding investments in
financial subsidiaries). The Act provides that state banks may invest
in financial subsidiaries (assuming they have the requisite
investment authority under applicable state law) subject to the same
conditions that apply to national banks.
Various bank regulatory agencies have begun issuing regulations
as mandated by the Act. The Federal Reserve has issued an interim
regulation establishing procedures for bank holding companies to
elect to become financial holding companies. In addition, the
Federal Reserve has issued interim regulations listing the financial
activities permissible for financial holding companies and describing
the parameters under which financial holding companies may engage in
securities and merchant banking activities. The Office of the
Comptroller of the Currency has issued a regulation regarding the
parameters under which national banks may establish and maintain
financial subsidiaries. In addition, all federal bank regulatory
agencies have jointly issued a proposed regulation that would
implement the privacy provisions of the Act. At this time, it is not
possible to predict the impact the Act and its implementing
regulations may have on the Company. As of the date of this filing,
the Company has not applied for or received approval to operate as a
financial holding company. In addition, the Bank has not applied for
or received approval to establish financial subsidiaries.
Year 2000 Compliance. The Year 2000 posed a unique set of
challenges to companies reliant on information technology. The
Company utilizes and is dependent upon data processing systems and
software to conduct its business. In 1997, the Company established a
Year 2000 committee and initiated a review and assessment of all
hardware and software issues related to the Year 2000 and the
potential for those issues to adversely affect the Company's
operations.
As a result of the Company's efforts, the Company has not
experienced any business interruptions or encountered any credit or
deposit customers who have experienced adverse consequences resulting
from the Year 2000. Among the benefits derived from the time, effort
and costs related to Year 2000 was a complete review and update of
the Company's disaster recovery and contingency plans. As a result,
the Company is now better prepared to deal with technical or natural
disasters which could threaten the Company's operations. The Company
will continue to remain aware of dates during 2000 which are
considered critical, such as 10/10/2000, and will address issues in
connection with the contingency plan should the need arise.
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 March 31, 2000 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 on a one year horizon as follows:
Scenario $ change in net % of net int. income
interest income
200 basis point rising $264,000 (5.49%)
200 basis point falling 344,000 7.16%
The Company believes that no significant changes in its interest
rate sensitivity position have occurred since March 31, 2000. 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, our implementation of new technologies, our ability to develop
and maintain secure and reliable electronic systems 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.
None
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: May 12, 2000 __________________________________
/s/ Patrick L. Alexander
President and Chief Executive Officer
Date: May 12, 2000 __________________________________
/s/ Mark A. Herpich
Vice President, Secretary, Treasurer
and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from
MNB Bancshares, Inc. 3/31/00 Form 10-Q and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<CIK> 0000891284
<NAME> MNB BANCSHARES, INC.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 2,688,113
<INT-BEARING-DEPOSITS> 100,000
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 44,099,536
<INVESTMENTS-CARRYING> 1,499,027
<INVESTMENTS-MARKET> 1,497,000
<LOANS> 89,803,883
<ALLOWANCE> 1,264,348
<TOTAL-ASSETS> 143,252,345
<DEPOSITS> 113,780,895
<SHORT-TERM> 9,500,000
<LIABILITIES-OTHER> 1,343,149
<LONG-TERM> 5,319,352
0
0
<COMMON> 14,497
<OTHER-SE> 13,294,452
<TOTAL-LIABILITIES-AND-EQUITY> 143,252,345
<INTEREST-LOAN> 1,905,825
<INTEREST-INVEST> 631,574
<INTEREST-OTHER> 9,115
<INTEREST-TOTAL> 2,546,514
<INTEREST-DEPOSIT> 1,148,036
<INTEREST-EXPENSE> 1,371,598
<INTEREST-INCOME-NET> 1,174,916
<LOAN-LOSSES> 15,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,080,083
<INCOME-PRETAX> 324,975
<INCOME-PRE-EXTRAORDINARY> 220,711
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 220,711
<EPS-BASIC> 0.15
<EPS-DILUTED> 0.15
<YIELD-ACTUAL> 3.51
<LOANS-NON> 450,800
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,248,758
<CHARGE-OFFS> 1,370
<RECOVERIES> 1,960
<ALLOWANCE-CLOSE> 1,264,348
<ALLOWANCE-DOMESTIC> 945,480
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 318,868
</TABLE>
