<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Quarterly Period Ended June 30, 1996
----------------------------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
For the Transition Period from to
______________________ ________________
Commission File Number 33-80076
--------------------------------------------------
SNB BANCSHARES, INC.
- ------------------------------------------------------------------------
(Name of Small Business Issuer in its Charter)
GEORGIA 58-2107916
- ------------------------------------- --------------------
State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization Identification No.)
700 WALNUT STREET, MACON, GEORGIA 31208
- ------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number (912) 477-6030
----------------------------------------------
SAME AS ABOVE
- ------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. X Yes No
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. ___ Yes ___ No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
1,362,800 Shares of $1.00 par value common stock as of June 30, 1996
- ------------------------------------------------------------------------------
Transitional Small Business Disclosure Format (Check One): ___ Yes ___ No
<PAGE>
<TABLE>
<CAPTION>
SNB BANCSHARES, INC. AND SUBSIDIARY
INDEX
PAGE
NUMBER
--------
<S> <C> <C>
PART I Financial Information
Condensed Consolidated Balance Sheet 1
Condensed Consolidated Statements of Income 2
Condensed Consolidated Statements of Cash Flows 4
Notes to Condensed Consolidated Financial Statements 5
Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
PART II Other Information
ITEM 2 Changes in Securities 14
ITEM 4 Submission of Matters to a Vote of Security Holders 14
ITEM 6 Exhibits and Reports on Form 8-K 15
</TABLE>
<PAGE>
PART I, ITEM 1
FINANCIAL INFORMATION
SNB BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1996
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
<S> <C>
CASH AND DUE FROM BANKS $ 5,469,527
--------------
FEDERAL FUNDS SOLD 20,000
--------------
INVESTMENTS SECURITIES 35,566,924
--------------
LOANS 75,338,293
--------------
BANK PREMISES AND EQUIPMENT 2,531,653
--------------
OTHER ASSETS 2,205,842
--------------
TOTAL ASSETS $121,132,239
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS $104,659,321
--------------
BORROWED MONEY 4,455,556
--------------
OTHER LIABILITIES 1,476,012
--------------
110,590,889
--------------
STOCKHOLDERS' EQUITY
Common Stock, Par Value $1 Per Share; Authorized 5,000,000 Shares,
Issued 1,362,800 Shares 1,362,800
Surplus 6,168,700
Retained Earnings 3,164,277
Unrealized Loss on Securities Available for Sale, Net of Tax Effect (154,427)
--------------
10,541,350
--------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $121,132,239
==============
</TABLE>
The accompanying notes are an integral part of this condensed consolidated
balance sheet.
-1-
<PAGE>
<TABLE>
<CAPTION>
PART I, ITEM 1 (CONTINUED)
FINANCIAL INFORMATION
SNB BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30
(UNAUDITED)
1996 1995
----------- ----------
<S> <C> <C>
INTEREST INCOME $2,527,912 $1,927,390
INTEREST EXPENSE 1,163,420 865,001
------------ ----------
NET INTEREST INCOME 1,364,492 1,062,389
PROVISION FOR LOAN LOSSES 80,000 12,285
------------ ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,284,492 1,050,104
NONINTEREST INCOME 259,917 211,211
NONINTEREST EXPENSE 1,034,143 795,846
------------ ----------
INCOME BEFORE INCOME TAXES 510,266 465,469
INCOME TAXES 145,700 132,962
------------ ----------
NET INCOME $ 364,566 $ 332,507
============ ==========
EARNINGS PER COMMON SHARE AND COMMON
EQUIVALENT SHARE $ .23 $ .24
============ ==========
EARNINGS PER COMMON SHARE ASSUMING
FULL DILUTION $ .23 $ .24
============ ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
-2-
<PAGE>
<TABLE>
<CAPTION>
PART I, ITEM 1 (CONTINUED)
FINANCIAL INFORMATION
SNB BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30
(UNAUDITED)
1996 1995
----------- ------------
<S> <C> <C>
INTEREST INCOME $4,864,532 $3,647,196
INTEREST EXPENSE 2,287,820 1,567,566
---------- ----------
NET INTEREST INCOME 2,576,712 2,079,630
PROVISION FOR LOAN LOSSES 107,000 54,571
------------ ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 2,469,712 2,025,059
NONINTEREST INCOME 513,902 390,410
NONINTEREST EXPENSE 2,019,472 1,519,488
------------ ----------
INCOME BEFORE INCOME TAXES 964,142 895,981
INCOME TAXES 270,088 254,754
------------ ----------
NET INCOME $ 694,054 $ 641,227
============ ==========
EARNINGS PER COMMON SHARE AND COMMON
EQUIVALENT SHARE $ .45 $ .47
============ ==========
EARNINGS PER COMMON SHARE ASSUMING
FULL DILUTION $ .45 $ .47
============ ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
-3-
<PAGE>
PART I, ITEM 1 (CONTINUED)
FINANCIAL INFORMATION
SNB BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
------------- ------------
<S> <C> <C>
CASH PROVIDED BY OPERATIONS $ 703,209 $ 683,946
-------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Net Purchase of Investment Securities Available for Sale (1,095,721) (5,577,780)
Net Purchase of Investment Securities Held to Maturity (292,957) (1,185,021)
Net Loans Made to Customers (12,336,445) (6,590,645)
Purchase of Premises and Equipment (217,403) (313,132)
Cash from Sale of OREO 23,689 86,695
---------------- ------------
(13,918,837) (13,579,883)
---------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase in Demand, Interest-Bearing Demand
and Savings Deposits 12,880,844 266,445
Net Increase (Decrease) in Time Certificates (1,190,028)` 10,927,757
Proceeds from Issuance (Repayment) of Demand
Note to the U.S. Treasury (184,383) 5,290
Principal Payments on Capital Lease - (6,144)
Federal Funds Purchased - 1,230,000
Payment of Dividends (149,908) (120,000)
Issuance of Capital Stock 1,750,100 -
Proceeds from Issuance (Repayment) of Notes Payable
to Federal Home Loan Bank (34,300) (6,300)
---------------- ------------
13,072,325 12,297,048
---------------- ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (143,303) (598,889)
CASH AND CASH EQUIVALENTS, BEGINNING 5,632,830 4,943,349
---------------- ------------
CASH AND CASH EQUIVALENTS, ENDING $ 5,489,527 $ 4,344,460
================ ============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
-4-
<PAGE>
PART I, ITEM 1 (CONTINUED)
FINANCIAL INFORMATION
SNB BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) BASIS OF PRESENTATION
The consolidated financial statements include SNB Bancshares, Inc. and its
wholly-owned subsidiary, Security National Bank (the Bank), located in Macon,
Georgia. All intercompany accounts have been eliminated in consolidation.
The financial information included herein is unaudited; however, such
information reflects all adjustments which are, in the opinion of management,
necessary to fairly state the financial position and results of operations for
the interim periods presented.
(2) LOANS
Loans as of June 30, 1996 are comprised of the following:
<TABLE>
<CAPTION>
<S> <C>
Commercial $12,427,788
Real Estate-Construction 2,142,872
Real Estate-Other 54,926,169
Loans to Individuals for Personal Expenditures 7,305,974
-------------
76,802,803
Allowance for Loan Losses (1,273,622)
Unearned Interest and Fees (190,888)
-------------
$75,338,293
=============
Nonperforming Assets
The following table presents the Company's nonperforming assets as of June 30, 1996:
($ IN
THOUSANDS)
-------------
Impaired and Other Nonaccrual Loans $ 230
Loans Past Due 90 Days or More and Still Accruing Interest 1
Restructured Loans not Included in the Above -
-------------
TOTAL NONPERFORMING LOANS 231
Other Real Estate Owned 493
-------------
TOTAL NONPERFORMING ASSETS $ 724
=============
</TABLE>
-5-
<PAGE>
PART I, ITEM 1 (CONTINUED)
FINANCIAL INFORMATION
(2) LOANS (CONTINUED)
Loans are generally reported at principal amount less unearned interest and
fees. On January 1, 1995, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 114, Accounting by Creditors for Impairment of a Loan and
SFAS No. 118, Accounting by Creditors for Impairment of a Loan-Income
Recognition and Disclosures. Impaired loans are loans for which principal and
interest are unlikely to be collected in accordance with the original loan terms
and, generally, represent loans delinquent in excess of 90 days which have been
placed on nonaccrual status and for which collateral values are less than
outstanding principal and interest. Small balance, homogeneous loans are
excluded from impaired loans. Generally, interest payments received on impaired
loans are applied to principal. Upon receipt of all loan principal, additional
interest payments are recognized as interest income on the cash basis. The
adoption of SFAS 114 and 118 did not result in significant changes to the
allowance for loan losses and, accordingly, did not have a material impact on
the financial statements.
Other nonaccrual loans are loans for which payments of principal and interest
are considered doubtful of collection under original terms but collateral values
equal or exceed outstanding principal and interest.
(3) EARNINGS PER SHARE
Earnings per common share and common equivalent share and fully diluted earnings
per share for the three-month period ended June 30, 1996 were computed assuming
all 419,760 outstanding stock options were exercised as of the beginning of
calendar year 1996. The exercise of options was included in the earnings per
share computation using the treasury stock method and assuming an average market
price for SNB Bancshares, Inc. stock of $11.41 and a closing market price of
$12.50 for the second quarter of 1996. An average market price of $10.77 and a
closing market price of $12.50 were assumed for SNB Bancshares, Inc. stock in
the earnings per share computations for the six-month period ended June 30,
1996. Consequently, 230,526 shares of stock from the exercise were considered
to be common stock equivalents for the three-month period ended June 30, 1996,
and 220,585 shares of stock were considered to be common stock equivalents for
the six-month period ended June 30, 1996. In the computation of fully diluted
earnings per share, 244,917 shares of stock from the exercise were considered to
be common stock equivalents for the three-month period ended June 30, 1996 and
242,378 shares of stock were considered to be common stock equivalents for the
six-month period ended June 30, 1996.
-6-
<PAGE>
PART I, ITEM 1 (CONTINUED)
FINANCIAL INFORMATION
(4) ALLOWANCE FOR LOAN LOSSES
The allowance method is used in providing for losses on loans. Accordingly, all
loan losses decrease the allowance and all recoveries increase it. The provision
for loan losses is based on factors which, in management's judgment, deserve
current recognition in estimating possible loan losses. Such factors considered
by management include growth and composition of the loan portfolio, economic
conditions and the relationship of the allowance for loan losses to outstanding
loans.
An allowance for loan losses is maintained for all impaired loans. Provisions
are made for impaired loans upon changes in expected future cash flows or
estimated net realizable value of collateral. When determination is made that
impaired loans are wholly or partially uncollectible, the uncollectible portion
is charged off.
The following table presents the Company's loan loss experience on all loans for
the three months ending June 30:
<TABLE>
<CAPTION>
($ in Thousands)
-----------------
1996 1995
------- -------
<S> <C> <C>
ALLOWANCE FOR LOAN LOSSES, APRIL 1 $1,156 $1,075
-------- -------
Charge-Offs
Commercial, Financial and Agricultural 49 -
Real Estate - Construction - -
Real Estate - Mortgage - -
Consumer 27 8
--------- ------
76 8
--------- ------
Recoveries
Commercial, Financial and Agricultural 91 3
Real Estate - Construction - -
Real Estate - Mortgage 12 -
Consumer 11 7
--------- ------
114 10
--------- ------
NET RECOVERIES 38 2
--------- ------
PROVISION FOR LOAN LOSSES 80 13
--------- ------
ALLOWANCE FOR LOAN LOSSES, JUNE 30 $1,274 $1,090
========= ======
RATIO OF NET RECOVERIES TO AVERAGE LOANS 0.05% 0.00%
========= ======
</TABLE>
-7-
<PAGE>
PART I, ITEM 1 (CONTINUED)
FINANCIAL INFORMATION
(4) ALLOWANCE FOR LOAN LOSSES (CONTINUED)
The following table presents the Company's loan loss experience on all loans for
the six months ending June 30:
<TABLE>
<CAPTION>
($ in Thousands)
-----------------
1996 1995
-------- -------
<S> <C> <C>
ALLOWANCE FOR LOAN LOSSES, JANUARY 1 $1,128 $1,020
-------- -------
Charge-Offs
Commercial, Financial and Agricultural 58 -
Real Estate - Construction - -
Real Estate - Mortgage - -
Consumer 35 8
-------- ------
93 8
--------- ------
Recoveries
Commercial, Financial and Agricultural 92 9
Real Estate - Construction - 1
Real Estate - Mortgage 26 2
Consumer 14 11
--------- ------
132 23
--------- ------
NET RECOVERIES 39 15
--------- ------
PROVISION FOR LOAN LOSSES 107 55
--------- ------
ALLOWANCE FOR LOAN LOSSES, JUNE 30 $1,274 $1,090
========= ======
RATIO OF NET RECOVERIES TO AVERAGE LOANS 0.06% 0.03%
========= ======
</TABLE>
(5) INVESTMENT SECURITIES
The Bank adopted Statement of Financial Accounting Standards (SFAS) No. 115,
Accounting for Certain Investments in Debt and Equity Securities effective
January 1, 1994. In accordance with the provisions of SFAS 115, the Bank
elected to classify securities individually as either available for sale or held
to maturity. Securities classified as held to maturity are recorded at
amortized cost. Those classified as available for sale are adjusted to market
value through a tax-effected increase or reduction in stockholders' equity.
-8-
<PAGE>
PART I, ITEM 1 (CONTINUED)
FINANCIAL INFORMATION
(5) INVESTMENT SECURITIES (CONTINUED)
Investment securities as of June 30, 1996 are summarized as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
SECURITIES AVAILABLE FOR SALE COST GAINS LOSSES VALUE
----------- --------- ---------- ------------
<S> <C> <C> <C> <C>
U.S. Treasuries $ 5,520,621 $ 19,663 $ (29,276) $ 5,511,008
U.S. Government Agencies
Mortgage-Backed 938,839 25,507 964,346
Other 16,835,729 31,102 (335,434) 16,531,397
State, County and Municipal 4,188,816 76,186 (21,729) 4,243,273
Other 679,300 679,300
----------- --------- ---------- -----------
$28,163,305 $152,458 $(386,439) $27,929,324
=========== ========= ========== ============
SECURITIES HELD TO MATURITY
U.S. Government Agencies
Mortgaged-Backed $ 161,230 $ (277) $ 160,953
Other 1,995,720 $ 5,005 2,000,725
State, County and Municipal 5,480,650 76,072 (64,345) 5,492,377
------------ --------- ---------- ------------
$ 7,637,600 $ 81,077 $ (64,622) $ 7,654,055
============ ========= ========== ============
</TABLE>
(6) NONCASH INVESTING ACTIVITIES
Noncash investing activities for the six months ended June 30 are as follows:
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Acquisition of Real Estate through Loan Foreclosure $163,660 $181,285
======== ========
</TABLE>
(7) STOCKHOLDERS' EQUITY
During the first quarter of 1996, the Company issued 162,800 shares of
additional common stock in a private placement to new directors and executive
officers joining the Company. These new shares were issued at current market
value resulting in an increase in common stock of $162,800 and an increase in
paid-in capital of $1,668,700.
During the second quarter of 1996, the board of directors of the Company
approved a 100 percent stock split to be effected on June 1, 1996 in the form of
a dividend to stockholders. Share, per share data and stockholders' equity
account balances for all periods presented in the accompanying condensed
consolidated financial statements and related notes have been restated to
reflect the additional shares outstanding resulting from the stock split.
-9-
<PAGE>
PART I, ITEM 1 (CONTINUED)
FINANCIAL INFORMATION
(7) STOCKHOLDERS' EQUITY (CONTINUED)
In addition to the common stock split, during the second quarter of 1996, the
Company approved an Incentive Stock Option Plan authorizing the issuance of
stock options to purchase up to 65,000 shares of its $1.00 par value common
stock to certain executive officers and key employees. Options to purchase
60,000 shares have been issued pursuant to the plan. The options vest at the
rate of 20 percent per year over the next five years. In accordance with
Financial Accounting Standards (SFAS) No. 123, Accounting for Stock Based
Compensation, measurement of compensation cost and financial statement
disclosures related to the issuance of the incentive stock options by the
Company will be required in 1997, the year the options begin to vest and become
exercisable.
The Company is required to maintain minimum amounts of capital to total "risk
weighted" assets, as defined by the banking regulations. As of June 30, 1996,
the bank is required to have minimum Tier 1 and Total Capital Ratios of 4
percent and 8 percent, respectively, and a leverage ratio (Tier 1 Capital to
total assets) of at least 4 percent. The Company's actual ratios as of June 30,
1996 are as follows:
<TABLE>
<CAPTION>
ACTUAL MINIMUM
------- -------
<S> <C> <C>
Tier 1 Capital Ratio 12.65% 4.00%
Total Capital Ratio 13.90% 8.00%
Leverage Ratio 9.39% 4.00%
</TABLE>
-10-
<PAGE>
PART I, ITEM 2
FINANCIAL INFORMATION
SNB BANCSHARES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following narrative presents management's discussion and analysis of SNB
Bancshares, Inc.'s (SNB's) financial condition and results of operations as of
and for the six-month periods ended June 30, 1996 and 1995 and for the years
ended December 31, 1995 and 1994. The historical financial statements of SNB are
set forth elsewhere herein. This discussion should be read in conjunction with
those financial statements and the other financial information included in this
prospectus. As SNB has no subsidiaries other than the Bank and no activities
other than those of the Bank, the following discussion refers to the financial
condition and operations of the Bank.
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO
SIX MONTHS ENDED JUNE 30, 1995
FINANCIAL CONDITION
Financial condition of a commercial bank should be examined to a large extent in
terms of trends in sources and uses of funds. SNB's primary use of funds comes
from loan demand. During the six months ended June 30, 1996, net loans made to
customers increased $12,336,445 or 19.2 percent. Investment securities
increased from $34,439,849 to $35,566,924 during the same period which
represents an increase of 3.3 percent. Total assets as of June 30, 1996 were
$121,132,239 as compared to $107,566,158 as of December 31, 1995. The increase
in total assets (12.6 percent) and the significant loan growth were funded
primarily through increased deposits. Deposit growth resulted from increased
media advertising and heightened community awareness of the personal banking
services provided by SNB. Demand, interest-bearing demand and savings deposits
increased by $12,880,844 for the six months ended June 30, 1996. Time deposits
decreased by $1,190,028 for the same period.
CAPITAL RESOURCES
The significant growth of SNB for the last two years and, particularly, the last
six months has caused management to become increasingly aware of the company's
capital needs. Relevant capital balances and ratios for the prior six quarters
are as follows:
<TABLE>
<CAPTION>
QUARTERS
-----------------------------------------------------------------------------
2/ND/ 1/ST/ 4/TH/ 3/RD/ 2/ND/ 1/ST/
1996 1996 1995 1995 1995 1995
----------- ----------- ----------- ---------- ---------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Stockholders' Equity $ 10,541 $ 10,374 $ 8,426 $ 7,942 $ 7,584 $ 7,300
Stockholders' Equity/
Assets 8.70% 9.13% 7.83% 7.73% 8.32% 8.61%
Book Value Per Share $ 7.74 $ 7.61 $ 7.02 $ 6.62 $ 6.32 $ 6.08
Shares Outstanding 1,362,800 1,362,800 1,200,000 1,200,000 1,200,000 1,200,000
Cash Dividends Per
Share $ .055 $ .055 $ .05 $ .05 $ .05 $ .05
</TABLE>
-11-
<PAGE>
PART I, ITEM 2 (CONTINUED)
FINANCIAL INFORMATION
During the first quarter of 1996, 81,400 shares of additional common stock were
issued resulting in contributed capital of $1,750,100. Contributed capital along
with net income of $329,488 in the first quarter assisted in raising book value
from $7.02 per share as of December 31, 1995 to $7.61 per share at the end of
the first quarter. The equity to assets ratio at that time was 9.13 percent.
During the quarter ended June 30, 1996, net income of $364,566 less cash
dividends paid of $74,954 resulted in book value of $7.74 per share and
stockholder equity to assets ratio of 8.70 percent. All share and per share data
have been adjusted to reflect a 100 percent stock split effected in the form of
a dividend on June 1, 1996 and a 20 percent stock split effected in the form of
a dividend on March 20, 1995. Management anticipates future growth in loans and
assets will be considerable and may require additional contributed capital.
LIQUIDITY
SNB manages its liquidity position to ensure adequate cash flow for deposit
withdrawals and credit commitments.
The percentage of net loans to deposits as of June 30, 1996 was 73.2, an
increase of almost 4 percentage points over the loan-deposit ratio of 69.3
percent as of December 31, 1995. Cash and due from banks and federal funds sold
totaled $5,489,527 as of June 30, 1996 as compared with $5,632,830 as of
December 31, 1995, representing a decrease of 2.5 percent. The Bank has
established relationships with its correspondent banks which will enable it to
purchase federal funds on a short-term basis when needed.
Cash provided by operations during the six months ended June 30, 1996 was
$703,209. Financing activities consisting primarily of net cash inflows from
deposits of $11,690,816 resulted in total cash inflows for the period of
$13,072,325. Cash outflows during the same period totaled $13,918,837 for
purchases of investment securities ($1,388,678) and net loans to customers of
$12,336,445. For the six- month period, cash and cash equivalents decreased
overall by $143,303.
RESULTS OF OPERATIONS
Interest Income
Interest income from loans and loan fees were $3,880,358 for the period ended
June 30, 1996, which represents an increase of $919,763 (31.1%), over the same
period for 1995. The increase is attributed to a significant increase in the
volume of loans. Interest from investment securities totaled $926,562 for the
1996 period of which 26.4% or $244,727 represents tax-free interest on state,
county and municipal obligations. Thirty percent of interest from investment
securities in the prior six months ended June 30, 1995 was tax-free interest.
Interest Expense
During the first six months of 1996, interest expense to the Bank incurred on
behalf of depositors totaled $2,147,607. It was considerably higher than
interest expense of the comparable 1995 period which totals $1,474,876. The
increase of $672,731 (45.6%) results from increased interest-bearing deposits
which were $87,028,963 as of June 30, 1996 versus $65,339,565 as of June 30,
1995.
-12-
<PAGE>
PART I, ITEM 2 (CONTINUED)
FINANCIAL INFORMATION
Provision for Loan Losses
The Bank provided $107,000 for loan losses for the six months ended June 30,
1996 versus $54,571 for the same period in 1995. The amount of the provision
for loan losses is the result of judgment made by management after giving due
consideration to the credit worthiness and size of the loan portfolio. The
increase in the 1996 provision for loan losses was based primarily on growth
in the loans outstanding.
Management seeks to maintain the allowance for loan losses at a level which
will be adequate under current economic conditions. However, management's
judgment is based upon a number of assumptions about future events, which are
believed to be reasonable, but which may or may not prove valid. Thus, there
can be no assurance that charge-offs in future periods will not exceed the
allowance for possible loan losses, that additional increases in the allowance
will not be required, or that any particular level of allowance for possible
loan losses will be maintained.
As of June 30, 1996, the allowance for loan losses was 1.7 percent of
outstanding loans less unearned interest. As of June 30, 1995, the comparable
level was 1.9 percent.
Noninterest Income and Noninterest Expenses
Noninterest income consists of service charges on deposits, other service
charges, commissions and fees, security transactions and other miscellaneous
income. Noninterest income of $513,902 for the six months ended June 30, 1996
increased by $123,492 over the comparable period of 1995. Of the total amount,
62.5 percent resulted from service charges on deposits. Service charges on
deposits increased significantly due to increased deposit balances.
Salaries and employee benefits of $1,047,466 through the second quarter of
1996 were higher than $737,938 for the same period in 1995. The increase is
representative of manpower requirements necessary to effectively run a growing
financial institution. Total noninterest expenses were $2,019,472 for the six
months ended June 30, 1996 and $1,519,488 for the same period in 1995.
Net Income
Net income for the first half of 1996 totaled $694,054 as compared to $641,227
for the first half of 1995. Earnings per share were $.45 versus $.47, a
decrease of $.02 per share resulting from the issuance of 81,400 shares, which
subsequently split to 162,800 shares. Return on average assets for the six
months ended June 30, 1996 was 1.24 percent representing a decline of .31
percent from the 1.55 percent earned during the first six months of 1995. The
decline resulted, to a large extent, because deposits grew faster than the
funds could be effectively employed in earning assets. Return on average
stockholders' equity for the first quarter of 1996 was 13.84 percent as
compared to 17.66 percent for the comparable period of 1995. The decline can
be attributed to the contribution of $1,750,100 of capital during the first
six months of 1996.
-13-
<PAGE>
PART II
OTHER INFORMATION
SNB BANCSHARES, INC.
ITEM 2
CHANGES IN SECURITIES (LIMITATIONS UPON PAYMENT OF DIVIDENDS)
Incorporated herein by reference to Pages 25 and 26 of Company's Definitive
Proxy Statement for the 1996 Annual Meeting of Stockholders held May 2, 1996
filed with the Securities and Exchange Commission (File No. 33-80076).
ITEM 4
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) Incorporated herein by reference to Page 12 of Company's Definitive Proxy
Statement for the 1996 Annual Meeting of Stockholders held on May 2, 1996
filed with the Securities and Exchange Commission (File No. 33-80076).
(b) Incorporated herein by reference to Pages 6 through 9 of Company's
Definitive Proxy Statement for the 1996 Annual Meeting of Stockholders held
on May 2, 1996 filed with the Securities and Exchange Commission (File No.
33-80076).
(c) PROPOSAL 1 - INCREASE NUMBER OF DIRECTORS AND EXPAND CLASSES
Incorporated herein by reference to Pages 4 and 5 of Company's Definitive
Proxy Statement for the 1996 Annual Meeting of Stockholders held on May 2,
1996 filed with the Securities and Exchange Commission (File No. 33-80076).
The number of directors was unanimously voted to be increased from 14 to 18
with each class expanded by an additional person. Of the total votes,
247,482 were given in person and 145,172 by proxy. Abstentions totaled
288,746.
PROPOSALS 2 AND 3 - ELECTION OF DIRECTORS
Incorporated herein by reference to Pages 5 and 6 of Company's Definitive
Proxy Statement for the 1996 Annual Meeting of Stockholders held on May 2,
1996 filed with the Securities and Exchange Commission (File No. 33-80076).
Each of the fourteen nominees named was unanimously voted in office by a
total of 392,654 votes. Of the total votes, 247,482 were given in person and
145,172 were given by proxy. Abstentions totaled 288,746.
-14-
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<PERIOD-START> JAN-01-1996
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<INT-BEARING-DEPOSITS> 0
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