|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previous: SPORT HALEY INC, 8-K, 1999-05-10 |
Next: SWIFT ENERGY OPERATING PARTNERS 1992-B LTD, 10-Q, 1999-05-10 |
<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
(Mark One)
( ) Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
for the quarterly period ended _______________________________.
(X) Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
for the transition period from 1/1/99 to 3/31/99.
Commission file number 0-24151
INLAND NORTHWEST BANCORPORATION, INC.
(Exact name of small business issuer as specified in its charter)
Washington 91-1574174
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
421 West Riverside, Spokane, WA 99201-0403
(Address of principal executive offices)
(509) 456-8888
(Issuer's telephone number, including area code)
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
The registrant has a single class of common stock, of which there are 604,378
shares issued and outstanding as of March 31, 1999.
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Part I Financial Information
Item 1. Financial Statements
Consolidated Statements of Condition - March 31, 1999
and December 31, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . 1
Consolidated Statements of Income - Three Months and year-to-date
Ended March 31, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . 2
Consolidated Statements of Cash Flow - year-to-date ended
March 31, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Stockholders' Equity as of
March 31, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . 5
Item 2. Management's Discussion and Analysis or Plan of Operation . . . . . . . 6
Part II Other Information
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . . . 6
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>
<PAGE>
Part I Financial Information
INLAND NORTHWEST BANCORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
March 31, 1999 and December 31, 1998
($ in thousands)
<TABLE>
<CAPTION>
March 31 December 31
1999 1998
Assets
<S> <C> <C>
Cash and due from banks $7,131 $9,445
Federal funds sold 7,069 18,674
Securities held-to-maturity (Note 2) 718 818
Securities available-for-sale (Note 2) 28,926 25,853
Federal Home Loan Bank stock, at cost 455 382
Loans, net of allowance for loan losses of $1,308 in 1999 and $1,184 in 1998 (Notes 3 & 4) 91,517 90,121
Loans held for sale 1,392 1,746
Accrued interest receivable 852 932
Premises and equipment, net 2,978 3,055
Foreclosed real estate, net of allowance of $10 in 1999 and $10 in 1998 203 203
Other assets 563 526
Goodwill 184 189
--- ---
TOTAL ASSETS $141,986 $151,944
======== ========
Liabilities
Noninterest bearing demand deposits 27,812 30,374
Money Market accounts 28,490 27,407
NOW accounts 7,186 10,063
Savings accounts 3,497 3,069
Time Certificates of Deposit, $100,000 and over 10,026 10,842
Time Certificates of Deposit, under $100,000 40,784 46,921
------ ------
TOTAL DEPOSITS $117,796 $128,675
Securities sold under agreement to repurchase 10,104 8,930
Borrowed funds, Federal Home Loan Bank (Note 5) 2,013 2,205
Borrowed funds, other banks (Note 5) 500 500
Accrued interest payable and other liabilities 881 999
--- ---
TOTAL LIABILITIES $13,498 $12,634
Stockholders' Equity
Common stock, no par, 1,000,000 shares authorized; issued and outstanding
604,378 on March 31, 1999 and 595,724 on December 31, 1998 (Note 6) 9,850 9,771
Retained earnings 826 619
Accumulated other comprehensive income, net of tax of $9 for 1999 and $131 for 1998 17 244
-- ---
TOTAL STOCKHOLDERS' EQUITY $10,693 $10,634
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $141,986 $151,944
======== ========
</TABLE>
1
<PAGE>
INLAND NORTHWEST BANCORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months and year-to-date ended March 31, 1999 and 1998
($ in thousands, except number of shares and per share information)
<TABLE>
<CAPTION>
Three Months Ended Year-to-date
03/31/99 03/31/98 1999 1998
Interest Income
<S> <C> <C> <C> <C>
Interest and fees on loans $ 2,198 $ 2,040 $ 2,198 $ 2,040
Interest on securities 448 454 448 454
Interest on federal funds sold 136 104 136 104
--- ---
TOTAL INTEREST INCOME $ 2,782 $ 2,597 $ 2,782 $ 2,597
Interest Expense
Interest on deposits 1,052 1,005 1,052 1,005
Interest on securities sold under agreement to repurchase 95 94 95 94
Interest on borrowed funds 32 0 32 0
--
TOTAL INTEREST EXPENSE $ 1,180 $ 1,100 $ 1,180 $ 1,100
NET INTEREST INCOME 1,603 1,498 1,603 1,498
Provision for loan losses 135 90 135 90
--- -- --
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES $ 1,468 $ 1,408 $ 1,468 $ 1,408
Noninterest Income
Fees and service charges 170 123 170 123
Net gain from sale of loans 329 28 329 28
Other noninterest income 79 57 79 57
-- --
TOTAL NONINTEREST INCOME $ 578 $ 208 $ 578 $ 208
Noninterest Expense
Salaries and employee benefits 1,016 776 1,016 776
Occupancy expense 116 103 116 103
Furniture, fixtures and equipment expense 43 34 43 34
Depreciation and amortization expense 112 88 112 88
Other operating expense 437 355 437 355
--- ---
TOTAL NONINTEREST EXPENSE $ 1,724 $ 1,357 $ 1,724 $ 1,357
INCOME BEFORE TAXES 321 259 321 259
Federal income tax expense 114 108 114 108
--- ---
NET INCOME $ 208 $ 151 $ 208 $ 151
--- ---
Quarter Ended Quarter Ended Year-to-date Year-to-date
03/31/99 03/31/98 03/31/99 03/31/98
Weighted average shares outstanding 600,998 589,871 600,998 589,871
Basic earnings per share $ 0.35 $ 0.26 $ 0.35 $ 0.26
-------- -------- -------- --------
Weighted average shares outstanding 600,998 589,871 600,998 589,871
Effect of dilutive securities 128,660 126,806 128,660 126,806
Weighted average shares outstanding, adjusted for dilutive securities 729,658 716,677 729,658 716,677
Earnings per share assuming full dilution $ 0.28 $ 0.21 $ 0.28 $ 0.21
----- ----- -----
</TABLE>
2
<PAGE>
INLAND NORTHWEST BANCORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
Year-to-date ended March 31, 1999 and 1998
($ in thousands)
<TABLE>
<CAPTION>
Year-to-date
1999 1998
<S> <C> <C>
Net income $ 208 $ 151
Adjustments to reconcile net income to cash provided by operating activities:
Provision for loan losses 135 90
Depreciation and amortization 112 88
Increase/decrease in assets and liabilities:
Accrued interest receivable 80 (186)
Other assets 88 (186)
Accrued interest payable & other liabilities (119) 304
------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 504 $ 261
Cash flows from investing activities:
Net (increase)/decrease in federal funds sold 11,605 (4,390)
Net (increase)/decrease in investment securities (3,396) (5,328)
Net (increase)/decrease in loans (1,531) (5,540)
Net (increase)/decrease in loans held for sale 354 0
Purchase of premises and equipment net of gain or loss on asset disposal (31) (285)
Foreclosed real estate activity (net) 0 166
------- --------
NET CASH PROVIDED/(USED) BY INVESTING ACTIVITIES $ 7,001 $(15,375)
Cash flows from financing activities:
Net increase/(decrease) in deposits (10,880) 16,665
Net increase/(decrease) in securities sold under agreement to repurchase 1,174 660
Net proceeds/(payments) from borrowed funds (192) 449
Cash received from stock sales (net) 79 0
------- --------
NET CASH PROVIDED/(USED) BY FINANCING ACTIVITIES $(9,819) $ 16,454
Net increase/(decrease) in cash and cash equivalents $(2,314) $ 1,340
Cash and cash equivalents, beginning of year $ 9,445 $ 7,405
CASH AND CASH EQUIVALENTS, END OF QUARTER $ 7,131 $ 8,745
Supplemental noncash financing activities:
Goodwill recognized in association with stock issued for acquisition of mortgage - $ (66)
Issuance of common stock for acquisition of mortgage subsidiary - $ 66
</TABLE>
3
<PAGE>
INLAND NORTHWEST BANCORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
As of March 31, 1998
<TABLE>
<CAPTION>
Accumulated
Common Retained Comprehensive Comprehensive
Total Stock Earnings Income Income
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996 $ 6,548,259 $6,113,286 $408,441 $ 26,532
Net income 1997 829,404 829,404 $ 829,404
Unrealized gains (losses) 134,647 134,647 134,647
----------
Comprehensive income $964,051
Proceeds from sale of stock 1,950,995 1,950,995
Fractional shares, issued in cash (3,083) (3,083)
Transfers 0
----------- ---------- ---------- ----------
Balance December 31, 1997 $ 9,460,222 $8,064,281 $1,234,762 $161,179
Net income, 1998, year-to-date $ 150,805 150,805 $150,805
Unrealized gains (losses) ($17,361) (17,361) (17,361)
Comprehensive income $133,444
Stock issued for acquisition of mortgage subsidiary (Note 7) $66,780 66,780
Proceeds from sale of stock $0
Fractional shares, issued in cash $0
Transfers $0
----------- ---------- ---------- ----------
Balance, end-of-quarter, March 31, 1998 $200,224 $66,780 $150,805 $143,818
----------- ---------- ---------- ----------
Disclosure of 1998 reclassification amount:
Unrealized holding gains during period (17,361)
Less reclassification adjustment for gains reported in net income 0
-----------
Net unrealized gains on securities ($17,361)
-----------
</TABLE>
INLAND NORTHWEST BANCORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
As of March 31, 1999
<TABLE>
<CAPTION>
Accumulated
Common Retained Comprehensive Comprehensive
Total Stock Earnings Income Income
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1997 $9,460,222 $8,064,281 $1,234,762 $161,179
Net income 1998 947,087 947,087 $947,087
Unrealized gains (losses) 82,562 82,562 82,562
Comprehensive income $1,029,649
Stock issued for acquisition of mortgage subsidiary (Note 7) 66,780 66,780
Proceeds from sale of stock 81,944 81,944
Fractional shares, issued in cash (4,843) (4,843)
Transfers 0 1,558,199 (1,558,199)
----------- ---------- ---------- ----------
Balance December 31, 1998 $10,633,752 $9,771,204 $618,807 $243,741
Net income, 1999, year-to-date 207,643 207,643 $207,643
Unrealized gains (losses) (227,145) (227,145) (227,145)
Comprehensive income $(19,502)
Proceeds from sale of stock 78,877 78,877
Fractional shares, issued in cash 0
Transfers 0
----------- ---------- ---------- ----------
Balance, end-of-quarter, March 31, 1999 $10,693,127 $9,850,081 $826,450 $16,596
----------- ---------- ---------- ----------
Disclosure of 1999 reclassification amount:
Unrealized holding gains during period ($227,145)
-----------
Less reclassification adjustment for gains reported in net income 0
-----------
Net unrealized gains on securities ($227,145)
-----------
</TABLE>
4
<PAGE>
NOTE 1. Management Statement
In the opinion of the Company, the accompanying audited and unaudited
Consolidated Financial Statements present fairly the financial position of the
Company as of March 31, 1999 and December 31, 1998, as well as the results of
operations and changes in financial position for the three month periods ended
March 31, 1999 and 1998.
Certain reclassifications of March 31 and December 31, 1998 balances have been
made to conform with the March 31, 1999 presentation; there was no impact on
net income or stockholders' equity. Shares outstanding and calculation of
earnings per share have been restated for the quarter ending March 31, 1998 to
reflect the effect of a ten percent stock dividend issued to shareholders of
record as of May 18, 1998.
NOTE 2. Securities
Most of the securities are classified as available-for-sale and are stated at
fair value, and unrealized holding gains and losses, net of related deferred
taxes, are reported as a separate component of stockholders' equity. Gains or
losses on available-for-sale securities sales are reported as part of
noninterest income based on the net proceeds and the adjusted carrying amount
of the securities sold, using the specific identification method. Net realized
gains of $94,455 are included in operating results for the period ending March
31, 1999. Carrying amount and fair values at March 31, 1999 and December 31,
1998 were as follows:
<TABLE>
<CAPTION>
3-31-99 12-31-98
----------------------- ------------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
<S> <C> <C> <C> <C>
Securities available-for-sale:
US Treasury securities $ 4,006 $ 4,048 $ 5,019 $ 5,209
Obligations of federal government agencies 22,238 22,230 18,248 18,424
Mortgage backed securities 2,657 2,649 1,960 1,970
Corporate debt obligations 0 0 250 250
------- ------- ------- -------
TOTAL $28,901 $28,926 $25,477 $25,853
======= ======= ======= =======
Securities held-to-maturity:
Obligations of states, municipalities and political subdivisions $ 718 $ 732 $ 818 $ 832
======= ======= ======= =======
</TABLE>
NOTE 3. Loans
Loan detail by category as of March 31, 1999 and December 31, 1998 were as
follows:
<TABLE>
<CAPTION>
Mar-31 Dec-31
1999 1998
<S> <C> <C>
Commercial loans $60,110 $58,779
Real estate loans 23,145 24,024
Installment loans 5,069 4,227
Consumer and other loans 4,747 4,531
------- -------
TOTAL LOANS $93,071 $91,561
------- -------
Allowance for loan losses (1,308) (1,184)
Deferred loan fees, net of deferred costs (246) (256)
------- -------
NET LOANS $91,517 $90,121
------- -------
</TABLE>
NOTE 4. Allowance for Loan Losses
The allowance for loan loss is maintained at levels considered adequate by
management to provide for possible loan losses. The allowance is based on
management's assessment of various factors affecting the loan portfolio,
including problem loans, business conditions and loss experience, and an
overall evaluation of the quality of underlying collateral. Changes in the
allowance for loan loss during the three month periods ended March 31, 1999 and
1998 were as follows:
<TABLE>
<CAPTION>
Three Months Ended Year-to-date
03-31-99 03-31-98 1999 1998
<S> <C> <C> <C> <C>
Balance, beginning of period $1,184 $1,085 $1,184 $1,085
Provision for loan losses 135 90 135 90
Loan Charge-offs 13 12 13 12
Loan Recoveries 2 0 2 0
------ ------ ------ ------
Balance, end of period $1,308 $1,163 $1,308 $1,163
</TABLE>
NOTE 5. Borrowed Funds
Borrowed funds include a non-revolving $500,000 line of credit payable from the
Company to Key Bank of Washington with a balance outstanding of $500,000 on
March 31, 1999 and December 31, 1998. Proceeds were used to fund the purchase
and capitalization of INB Mortgage Company.
The Company's subsidiary, Inland Northwest Bank, has unsecured operating lines
of credit with Key Bank of Washington for $2,500,000, US Bank for $1,500,000,
Zions Bank for $1,500,000 and Federal Home Loan Bank (FHLB) for approximately
$7,050,000 (5.0% of bank assets.) There was a balance of $175,000 on the FHLB
line on December 31, 1998. There were no balances outstanding on any of the
lines on March 31, 1999. The bank also has access to an equal (5.0%) amount of
long-term funding through the FHLB (that is, an additional $7,050,000) and has
taken advances to fund Community Investment Program and other loans utilizing
these funds. Notes payable to the FHLB were $2,013,365 on March 31, 1999 and
$2,030,158 on December 31, 1998.
NOTE 6. Common Stock
On May 13, 1998 the Board of Directors declared a ten-percent stock dividend,
effective to stockholders of record May 18, 1998, and issued June 26, 1998. All
amounts per share and weighted average shares outstanding for all periods
presented have been retroactively adjusted to reflect the stock dividend. The
Company recorded a transfer from retained earnings to common stock for the
market value of the additional shares issued on June 26, 1998.
NOTE 7. Acquisition of Mortgage Subsidiary
As previously disclosed, the Company acquired a mortgage subsidiary on February
27, 1998. Results presented in the Consolidated Statements of Condition,
Income, Cash Flow, and Stockholders' Equity for the period ending December 31,
1998 reflect the acquisition and mortgage company operating results for a ten
month period. Through the ten month period, the mortgage company experienced
after-tax operating losses of $145,544. March 31, 1999 results include three
months of operating results for the mortgage subsidiary, which included
after-tax losses of $60,681. March 31, 1998 results include one month of
operating results for the mortgage subsidiary, which included after-tax losses
of $21,857. Management anticipates that the mortgage company will contribute
positively to earnings during the remainder of 1999 and for the year as a
whole.
5
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
The Registrant relied upon Alternative 2 in its registration statement
filed on Form 10-SB; there is no information to provide in response to Item
6(a)(3)(i) to Model B of Form 1-A.
Part II Other Information
Item 2. Changes in Securities.
During the first quarter of the 1999 fiscal year, the Registrant issued 110
shares of common stock to an employee, pursuant to the exercise of an employee
stock option. The exercise price was $23.64 per share after adjustment of the
stated exercise price of $26.00 per share for a previously declared 10% stock
dividend.
The Registrant also issued a total of 8,544 shares of common stock to three
shareholders pursuant to the exercise of warrants granted on January 16, 1990.
The exercise price was $10.25 per share after adjustment of the stated exercise
price of $15.00 per share for previously declared 10% stock dividends.
The Registrant believes that the issuance of these shares of common stock
was exempt from registration pursuant to Section 4(2) of the Securities Act of
1933.
Item 6. Exhibits and Reports on Form 8-A
(a) Exhibits
Ex 27 Financial Data Schedule
(b) Reports on Form 8-K
Not applicable
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
INLAND NORTHWEST BANCORPORATION, INC.
Date: May 10, 1999
By /s/ Frederick M. Schunter
------------------------------------------
Frederick M. Schunter, President and
Chief Executive Officer
6
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 7,131
<INT-BEARING-DEPOSITS> 33
<FED-FUNDS-SOLD> 7,069
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 28,926
<INVESTMENTS-CARRYING> 718
<INVESTMENTS-MARKET> 732
<LOANS> 93,071
<ALLOWANCE> 1,308
<TOTAL-ASSETS> 141,986
<DEPOSITS> 117,796
<SHORT-TERM> 10,104
<LIABILITIES-OTHER> 881
<LONG-TERM> 2,513
0
0
<COMMON> 9,850
<OTHER-SE> 843
<TOTAL-LIABILITIES-AND-EQUITY> 10,693
<INTEREST-LOAN> 2,198
<INTEREST-INVEST> 448
<INTEREST-OTHER> 136
<INTEREST-TOTAL> 2,782
<INTEREST-DEPOSIT> 1,052
<INTEREST-EXPENSE> 1,180
<INTEREST-INCOME-NET> 1,603
<LOAN-LOSSES> 135
<SECURITIES-GAINS> 94
<EXPENSE-OTHER> 1,724
<INCOME-PRETAX> 321
<INCOME-PRE-EXTRAORDINARY> 321
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 208
<EPS-PRIMARY> 0.35
<EPS-DILUTED> 0.28
<YIELD-ACTUAL> 5.05
<LOANS-NON> 398
<LOANS-PAST> 130
<LOANS-TROUBLED> 237
<LOANS-PROBLEM> 1,904
<ALLOWANCE-OPEN> 1,184
<CHARGE-OFFS> 13
<RECOVERIES> 2
<ALLOWANCE-CLOSE> 1,308
<ALLOWANCE-DOMESTIC> 1,308
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
|
|