FORM 10-QSB/A-2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ________________
Commission File No. 0-21078
UNION BANKSHARES, LTD.
(Exact name of Registrant as specified in its charter)
DELAWARE 84-0986148
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(State of other jurisdiction of (I.R.S Employer)
incorporation of organization) Identification No.)
1825 LAWRENCE STREET, SUITE 444, DENVER, CO 80202
(Address of principal executive offices)
(Zip Code)
(303) 298-5352
(Registrant's telephone number, including area code)
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Not Changed
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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 twelve 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 .
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At November 3, 1999, there were 2,364,914 shares of common stock outstanding.
Transitional Small Business Disclosure Format (Check one): YES NO X
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UNION BANKSHARES, LTD.
INDEX
Page
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements....................... 3
SIGNATURES.................................................. 9
2
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PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
UNION BANKSHARES, LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION
September 30, December 31,
ASSETS 1999 1998
(Unaudited)
------------ ------------
<S> <C> <C>
Cash and cash equivalents:
Cash and due from banks $ 14,528,000 $ 18,914,000
Federal funds sold 7,200,000 26,505,000
------------ ------------
Total cash and cash equivalents 21,728,000 45,419,000
Investment securities:
Investment securities held to maturity 34,045,000 27,469,000
Investment securities available for sale 111,728,000 77,594,000
Other investments 1,949,000 988,000
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Total investment securities 147,722,000 106,051,000
Loans:
Commercial 125,921,000 105,618,000
Real estate mortgage 2,743,000 4,101,000
Real estate construction 18,008,000 12,881,000
Consumer 22,530,000 24,595,000
------------ ------------
Total loans 169,202,000 147,195,000
Less: allowance for loan losses (2,762,000) (2,678,000)
------------ ------------
166,440,000 144,517,000
Mortgage loans held-for-sale -- 4,285,000
Excess of investment in subsidiary over net
assets acquired 6,765,000 7,169,000
Furniture, equipment and improvements, net 3,245,000 3,276,000
Accrued interest receivable 2,451,000 1,542,000
Other assets 3,537,000 2,318,000
============ ============
TOTAL ASSETS $351,888,000 $314,577,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand (noninterest-bearing) $ 85,095,000 $ 78,017,000
NOW 26,865,000 25,852,000
Money Market 82,246,000 65,452,000
Savings 18,702,000 19,221,000
Time 79,251,000 83,108,000
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Total deposits 292,159,000 271,650,000
Federal funds purchased -- --
Notes payable 28,600,000 10,000,000
Guaranteed preferred beneficial interests
in Company's debentures 10,304,000 10,304,000
Accrued interest payable 338,000 471,000
Other liabilities 976,000 1,808,000
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Total liabilities 332,377,000 294,233,000
Stockholders' equity
Common stock 2,000 2,000
Common stock surplus 9,672,000 9,639,000
Retained earnings 11,114,000 10,060,000
Valuation allowance (1,277,000) 643,000
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Total stockholders' equity 19,511,000 20,344,000
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $351,888,000 $314,577,000
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3
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UNION BANKSHARES, LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Nine months ended Three months ended
September 30, September 30,
--------------------------- ---------------------------
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $11,033,000 $ 9,385,000 $ 3,982,000 $ 3,230,000
Interest on investment securities:
U.S. government agencies and corporations 5,201,000 2,189,000 1,972,000 783,000
States and other political subdivisions 1,020,000 1,018,000 354,000 354,000
Interest on federal funds sold
and interest bearing deposits at other banks 334,000 487,000 107,000 228,000
----------- ----------- ----------- -----------
Total interest income 17,588,000 13,079,000 6,415,000 4,595,000
INTEREST EXPENSE:
Interest on deposits 5,284,000 3,932,000 1,780,000 1,503,000
Interest on federal funds purchased 137,000 2,000 7,000 0
Interest on notes payable 1,458,000 582,000 700,000 188,000
----------- ----------- ----------- -----------
Total interest expense 6,879,000 4,516,000 2,487,000 1,691,000
----------- ----------- ----------- -----------
NET INTEREST INCOME BEFORE PROVISION FOR
LOAN LOSS 10,709,000 8,563,000 3,928,000 2,904,000
PROVISION FOR LOAN LOSS 102,000 243,000 55,000 56,000
----------- ----------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSS 10,607,000 8,320,000 3,873,000 2,848,000
NONINTEREST INCOME:
Service charges 491,000 292,000 169,000 104,000
Gain (loss) on sale of securities available for sale 266,000 25,000 0 (10,000)
Other 531,000 398,000 180,000 151,000
----------- ----------- ----------- -----------
Total non interest income 1,288,000 715,000 349,000 245,000
----------- ----------- ----------- -----------
NONINTEREST EXPENSE:
Salaries and employee benefits 5,387,000 4,009,000 1,837,000 1,338,000
Amortization of investment in subsidiary
over net assets acquired 404,000 170,000 135,000 57,000
Occupancy and equipment 1,513,000 1,095,000 536,000 431,000
Other 3,023,000 2,273,000 971,000 798,000
----------- ----------- ----------- -----------
Total non interest expense 10,327,000 7,547,000 3,479,000 2,624,000
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAX EXPENSE 1,568,000 1,488,000 743,000 469,000
INCOME TAX EXPENSE (Note 3) 514,000 240,000 280,000 104,000
=========== =========== =========== ===========
NET INCOME $ 1,054,000 $ 1,248,000 $ 463,000 $ 365,000
=========== =========== =========== ===========
EARNINGS PER COMMON SHARE BASIC: (Note 4)
Net income per share $ 0.45 $ 0.53 $ 0.20 $ 0.15
=========== =========== =========== ===========
Weighted average number of common shares outstanding 2,348,875 2,338,446 2,350,514 2,338,256
=========== =========== =========== ===========
EARNINGS PER COMMON SHARE DILUTED (Note 4)
Net income per share $ 0.40 $ 0.47 $ 0.17 $ 0.13
=========== =========== =========== ===========
Weighted average number of common shares outstanding 2,634,270 2,630,620 2,635,909 2,635,965
=========== =========== =========== ===========
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4
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UNION BANKSHARES, LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Nine months ended Three months ended
September 30, September 30,
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1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET INCOME $ 1,054,000 $ 1,248,000 $ 463,000 $ 365,000
OTHER COMPREHENSIVE INCOME (LOSS)
UNREALIZED APPRECIATION (DEPRECIATION) ON
AVAILABLE-FOR-SALE SECURITIES, NET OF
INCOME TAXES (2,087,000) 347,000 (340,000) 72,000
LESS: RECLASSIFICATION ADJUSTMENT FOR REALIZED
(GAIN) LOSSES INCLUDED IN NET INCOME, NET OF
INCOME TAXES 167,000 16,000 0 (6,000)
=========== =========== =========== ===========
COMPREHENSIVE INCOME $ (866,000) $ 1,611,000 $ 123,000 $ 431,000
=========== =========== =========== ===========
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5
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UNION BANKSHARES, LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(Unaudited)
September 30,
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1999 1998
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<S> <C> <C>
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ (1,591,000) $ 996,000
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CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of available-for-sale
securities 12,639,000 19,295,000
Proceeds from maturities of held-to-maturity
securities 5,996,000 5,236,000
Proceeds from sale of available-for-sale
securities 17,149,000 2,207,000
Purchase of available-for-sale securities (75,320,000) (42,343,000)
Purchase of held-to-maturity securities (3,958,000) (3,237,000)
Purchase of loans held-for-sale (9,389,000) (19,905,000)
Proceeds from sale of loans held-for-sale 13,674,000 19,602,000
Purchase of other investments (961,000) (54,000)
Net (increase) decrease in loans (20,674,000) (5,405,000)
Purchase of furniture and equipment (548,000) (979,000)
Proceeds from sale of other real estate owned 150,000 --
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Net cash used in investing activities (61,242,000) (25,583,000)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in deposits 20,509,000 26,987,000
Increase (decrease) in fed funds purchased -- --
New borrowings long-term debt 33,600,000 --
Repayments of long-term debt (15,000,000) (1,000,000)
Proceeds from issuance of common stock 33,000 26,000
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Net cash provided by financing activities 39,142,000 26,013,000
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Net increase in cash and cash equivalents (23,691,000) 1,426,000
Cash and cash equivalents, beginning of year 45,419,000 26,714,000
------------ ------------
Cash and cash equivalents, end of quarter $ 21,728,000 $ 28,140,000
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</TABLE>
6
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UNION BANKSHARES, LTD. AND SUBSIDIARY
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1999
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-QSB and do not include all the
information and note disclosures required by generally accepted accounting
principles for complete financial statements. For further information, refer to
the consolidated financial statements and related footnotes included in the
Company's annual report on Form 10-KSB for the year ended December 31, 1998. In
the opinion of management, the consolidated financial statements presented
herein include all adjustments (consisting of normal recurring accruals)
necessary to present fairly, in all material respects, the consolidated
financial position of Union Bankshares, Ltd. (the "Company") as of September 30,
1999 and the Company's results of operations for the three and nine months ended
September 30, 1999 and 1998, statements of comprehensive income for the three
and nine months ended September 30, 1999 and 1998, and statements of cash flows
for the nine months ended September 30, 1999 and 1998.
Certain reclassifications have been made to the September 30, 1998 Consolidated
Financial Statements to conform to the September 30, 1999 Consolidated Financial
Statements.
NOTE 2. RESULTS OF OPERATIONS
The results of operations for the three and nine months ended September 30, 1999
and 1998 are not indicative of the results to be expected for the full year.
NOTE 3. INCOME TAXES
Income taxes are provided for on the liability method, in accordance with
Financial Accounting Standards Board (FASB) Statement No. 109, whereby deferred
assets are recognized for deductible temporary differences and operating loss
and tax credit carryforwards and deferred tax liabilities are recognized for
taxable temporary differences. Temporary differences are defined as the
differences between the reported amounts of assets and liabilities and their tax
basis. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in the tax laws and rates on
the date of enactment.
7
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NOTE 4. EARNINGS PER COMMON SHARE
Earnings per common share are computed by dividing net income available for
common stockholders by the weighted average number of shares of common stock
outstanding during the period plus the equivalent number of shares purchasable
under common stock options, if dilutive. Earnings per common share were affected
by 285,395 shares purchasable pursuant to exercisable options during the three
and nine months ended September 30, 1999. Earnings per common share were
affected by 292,174 shares purchasable pursuant to exercisable options during
the three and nine months ended September 30, 1998.
8
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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.
UNION BANKSHARES, LTD.
(Registrant)
November 17, 1999 /s/ BRUCE E. HALL
----------------------------------
Bruce E. Hall
Vice President, Treasurer and
Secretary
(Authorized Officer and Principal
Financial Officer of the Registrant)
9
