<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 September 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 September 30, 1996
- --------------------------------------------------------------------------------
Transitional Small Business Disclosure Format (Check One): Yes No
----- -----
<PAGE>
SNB BANCSHARES, INC. AND SUBSIDIARY
INDEX
Page
Number
------
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 15
ITEM 6 Exhibits and Reports on Form 8-K 15
<PAGE>
PART I, ITEM 1
FINANCIAL INFORMATION
SNB BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Cash and Due from Banks $ 6,960,680
------------
Federal Funds Sold -
------------
Investments Securities 30,168,325
------------
Loans 78,292,818
------------
Bank Premises and Equipment 2,724,631
------------
Other Assets 1,737,279
------------
Total Assets $119,883,733
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $102,363,029
------------
Borrowed Money 5,284,449
------------
Other Liabilities 1,244,466
------------
108,891,944
------------
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 3,540,869
Unrealized Loss on Securities Available for Sale,
Net of Tax Effect (80,580)
------------
10,991,789
------------
Total Liabilities and Stockholders' Equity $119,883,733
============
</TABLE>
The accompanying notes are an integral part of this
condensed consolidated balance sheet.
- 1 -
<PAGE>
PART I, ITEM 1 (CONTINUED)
FINANCIAL INFORMATION
SNB BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Interest Income $2,646,781 $2,116,450
Interest Expense 1,146,442 1,024,232
---------- ----------
Net Interest Income 1,500,339 1,092,218
Provision for Loan Losses 120,000 12,286
---------- ----------
Net Interest Income after Provision for Loan Losses 1,380,339 1,079,932
Noninterest Income 307,877 219,746
Noninterest Expense 1,051,449 766,982
---------- ----------
Income before Income Taxes 636,767 532,696
Income Taxes 185,221 152,541
---------- ----------
Net Income $ 451,546 $ 380,155
========== ==========
Earnings Per Common Share and Common
Equivalent Share $ .27 $ .26
========== ==========
Earnings Per Common Share Assuming
Full Dilution $ .27 $ .26
========== ==========
</TABLE>
The accompanying notes are an integral part of
these condensed consolidated financial statements.
- 2 -
<PAGE>
PART I, ITEM 1 (CONTINUED)
FINANCIAL INFORMATION
SNB BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Interest Income $7,511,313 $5,763,646
Interest Expense 3,434,262 2,591,798
---------- ----------
Net Interest Income 4,077,051 3,171,848
Provision for Loan Losses 227,000 66,857
---------- ----------
Net Interest Income after Provision
for Loan Losses 3,850,051 3,104,991
Noninterest Income 821,779 608,647
Noninterest Expense 3,070,921 2,284,961
---------- ----------
Income before Income Taxes 1,600,909 1,428,677
Income Taxes 455,309 407,295
---------- ----------
Net Income $1,145,600 $1,021,382
========== ==========
Earnings Per Common Share and Common
Equivalent Share $ .74 $ .74
========== ==========
Earnings Per Common Share Assuming
Full Dilution $ .72 $ .73
========== ==========
</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 NINE MONTHS ENDED SEPTEMBER 30
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
CASH PROVIDED BY OPERATIONS $ 1,390,928 $ 1,126,183
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Sale (Purchase) of Investment Securities 4,103,566 (10,555,022)
Net Loans Made to Customers (15,447,901) (8,371,613)
Purchase of Premises and Equipment (483,563) (514,502)
Cash from Sale of OREO 234,849 86,695
------------ ------------
(11,593,049) (19,354,442)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase in Demand, Interest-Bearing Demand
and Savings Deposits 14,763,514 2,400,673
Net Increase in Time Certificates (5,368,991) 19,570,542
Proceeds from Issuance (Repayment) of Demand
Note to the U.S. Treasury (207,990) 196,293
Principal Payments on Capital Lease - (6,144)
Federal Funds Purchased 880,000 -
Proceeds from Issuance (Repayment) of Notes Payable
to Federal Home Loan Bank (61,800) 1,418,700
Payment of Dividends (224,862) (180,000)
Issuance of Capital Stock 1,750,100 -
------------ ------------
11,529,971 23,400,064
------------ ------------
Net Increase in Cash and Cash Equivalents 1,327,850 5,171,805
Cash and Cash Equivalents, Beginning 5,632,830 4,943,349
------------ ------------
Cash and Cash Equivalents, Ending $ 6,960,680 $ 10,115,154
============ ============
</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 September 30, 1996 are comprised of the following:
Commercial $13,489,565
Real Estate-Construction 2,458,804
Real Estate-Other 55,993,620
Loans to Individuals for Personal Expenditures 7,959,220
-----------
79,901,209
Allowance for Loan Losses (1,435,139)
Unearned Interest and Fees (173,252)
------------
$78,292,818
===========
Nonperforming Assets
The following table presents the Company's nonperforming assets as of September
30, 1996:
($ IN
THOUSANDS)
----------
Impaired and Other Nonaccrual Loans $263
Loans Past Due 90 Days or More and Still Accruing Interest 31
Restructured Loans not Included in the Above -
----
TOTAL NONPERFORMING LOANS 294
Other Real Estate Owned 319
----
TOTAL NONPERFORMING ASSETS $613
====
- 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 September 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 $15.60 and a closing
market price of $16.00 for the third quarter of 1996. An average market price of
$10.81 and a closing market price of $16.00 were assumed for SNB Bancshares,
Inc. stock in the earnings per share computations for the nine-month period
ended September 30, 1996. Consequently, 282,324 shares of stock from the
exercise were considered to be common stock equivalents for the three-month
period ended September 30, 1996, and 221,289 shares of stock were considered to
be common stock equivalents for the nine-month period ended September 30, 1996.
In the computation of fully diluted earnings per share, 285,760 shares of stock
from the exercise were considered to be common stock equivalents for the
three-month period ended September 30, 1996 and 276,635 shares of stock were
considered to be common stock equivalents for the nine-month period ended
September 30, 1996.
- 6 -
<PAGE>
PART I, ITEM 1 (CONTINUED)
FINANCIAL INFORMATION
(4) ALLOWANCE FOR LOAN LOSSES
The allowance method is used in providing for losses on loans. Accordingly, all
loan losses decrease the allowance and all recoveries increase it. The provision
for loan losses is based on factors which, in management's judgment, deserve
current recognition in estimating possible loan losses. Such factors considered
by management include growth and composition of the loan portfolio, economic
conditions and the relationship of the allowance for loan losses to outstanding
loans.
An allowance for loan losses is maintained for all impaired loans. Provisions
are made for impaired loans upon changes in expected future cash flows or
estimated net realizable value of collateral. When determination is made that
impaired loans are wholly or partially uncollectible, the uncollectible portion
is charged off.
The following table presents the Company's loan loss experience on all loans for
the three months ending September 30:
<TABLE>
<CAPTION>
($ in Thousands)
------------------
1996 1995
-------- --------
<S> <C> <C>
Allowance for Loan Losses, July 1 $1,274 $1,090
------ ------
Charge-Offs
Commercial, Financial and Agricultural - -
Real Estate - Construction - -
Real Estate - Mortgage - -
Consumer 22 8
------ ------
22 8
------ ------
Recoveries
Commercial, Financial and Agricultural 50 -
Real Estate - Construction - -
Real Estate - Mortgage 4 5
Consumer 9 6
------ ------
63 11
------ ------
Net Recoveries 41 3
------ ------
Provision for Loan Losses 120 12
------ ------
Allowance for Loan Losses, September 30 $1,435 $1,105
====== ======
Ratio of Net Recoveries to Average Loans 0.05% 0.00%
====== ======
</TABLE>
- 7 -
<PAGE>
PART I, ITEM 1 (CONTINUED)
FINANCIAL INFORMATION
(4) ALLOWANCE FOR LOAN LOSSES (CONTINUED)
The following table presents the Company's loan loss experience on all loans for
the nine months ending September 30:
<TABLE>
<CAPTION>
($ in Thousands)
------------------
1996 1995
-------- --------
<S> <C> <C>
ALLOWANCE FOR LOAN LOSSES, JANUARY 1 $1,128 $1,020
------ ------
Charge-Offs
Commercial, Financial and Agricultural 10 -
Real Estate - Construction - -
Real Estate - Mortgage - -
Consumer 53 16
------ ------
63 16
------ ------
Recoveries
Commercial, Financial and Agricultural 94 9
Real Estate - Construction - 1
Real Estate - Mortgage 30 7
Consumer 19 17
------ ------
143 34
------ ------
Net Recoveries 80 18
------ ------
Provision for Loan Losses 227 67
------ ------
Allowance for Loan Losses, September 30 $1,435 $1,105
====== ======
Ratio of Net Recoveries to Average Loans 0.10% 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 September 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 $ 4,039,697 $ 15,537 $ (9,812) $ 4,045,422
U.S. Government Agencies
Mortgage-Backed 484,676 15,019 - 499,695
Other 12,679,379 20,964 (248,917) 12,451,426
State, County and Municipal 4,581,984 94,506 (9,388) 4,667,102
Other 675,400 675,400
------------ ------------ ------------ ------------
$22,461,136 $146,026 $(268,117) $22,339,045
============ ============ ============ ============
SECURITIES HELD TO MATURITY
U.S. Government Agencies
Mortgaged-Backed $ 109,196 $ (186) $ 109,010
Other 1,999,115 $ 445 (340) 1,999,220
State, County and Municipal 5,720,969 84,825 (18,910) 5,786,884
------------ ------------ ------------ ------------
$7,829,280 $ 85,270 $ (19,436) $7,895,114
============ ============ ============ ============
</TABLE>
(6) NONCASH INVESTING ACTIVITIES
Noncash investing activities for the nine months ended September 30 are as
follows:
1996 1995
-------- --------
Acquisition of Real Estate
through Loan Foreclosure $200,591 $ -
======== ====
(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.
During the third quarter of 1996, SNB announced an offering of a maximum of
272,560 shares of its $1.00 par common stock at a purchase of $13.50 per share.
The shares are offered initially as a rights offering to shareholders of record
of SNB pursuant to warrants issued by the Company to shareholders of record as
of September 20, 1996. Management anticipates the stock offering to generate an
additional $3,600,000 in new equity capital. Form SB-2 Registration Statement
filed with the Securities and Exchange Commission is herein incorporated by
reference (Exhibit 19).
The Company is required to maintain minimum amounts of capital to total "risk
weighted" assets, as defined by the banking regulations. As of September 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 September
30, 1996 are as follows:
<TABLE>
<CAPTION>
Actual Minimum
------ -------
<S> <C> <C>
Tier 1 Capital Ratio 12.77% 4.00%
Total Capital Ratio 14.03% 8.00%
Leverage Ratio 9.82% 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 nine-month periods ended September 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.
Nine Months Ended September 30, 1996 Compared to
Nine Months Ended September 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 nine months ended September 30, 1996, net loans
made to customers increased $15,447,901 or 31.8 percent. Total assets as of
September 30, 1996 were $119,883,733 as compared to $107,566,158 as of December
31, 1995. The increase in total assets (16.6 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 $14,763,514 for the nine months ended September
30, 1996. Time deposits decreased by $5,368,991 for the same period.
CAPITAL RESOURCES
The significant growth of SNB for the last two years and, particularly, the last
nine 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
-----------------------------------------------------------------------------
3rd 2nd 1st 4th 3rd 2nd
1996 1996 1996 1995 1995 1995
---------- --------- ---------- --------- ---------- ----------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Stockholders' Equity $10,992 $10,541 $10,374 $8,426 $7,942 $7,584
Stockholders' Equity/Assets 9.17% 8.70% 9.13% 7.83% 7.73% 8.32%
Book Value Per Share $8.07 $7.74 $7.61 $7.02 $6.62 $6.32
Shares Outstanding 1,362,800 1,362,800 1,362,800 1,200,000 1,200,000 1,200,000
Cash Dividends Per Share $.055 $.055 $.055 $.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 September 30, 1996, net income of $451,546 less cash
dividends paid of $74,954 resulted in book value of $8.07 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.
During the third quarter of 1996, SNB announced an offering of a maximum of
272,560 shares of its $1.00 par common stock at a purchase price of $13.50 per
share. The shares are offered initially as a rights offering to shareholders of
record of SNB pursuant to warrants issued by the Company to shareholders of
record as of September 20, 1996. Management anticipates the stock offering to
generate an additional $3,600,000 in new equity capital. Form SB-2 Registration
Statement filed with the Securities and Exchange Commission is herein
incorporated by reference (Exhibit 19).
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 September 30, 1996 was 77.9, an
increase of almost 9 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 $6,960,680 as of September 30, 1996 as compared with $5,632,830 as of
December 31, 1995, representing an increase of 2.4 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. As of September 30,
1996, SNB had $880,000 in federal funds purchased.
Cash provided by operations during the nine months ended September 30, 1996 was
$1,390,928. Financing activities consisting primarily of net cash inflows from
deposits of $10,722,373 resulted in total cash inflows for the period of
$11,529,971. Cash outflows during the same period totaled $11,593,049 for sales
of investment securities $4,103,566 and net loans to customers of $(15,447,901).
For the nine-month period, cash and cash equivalents increased overall by
$1,327,850.
RESULTS OF OPERATIONS
Interest Income
Interest income from loans and loan fees were $6,063,625 for the period ended
September 30, 1996, which represents an increase of $1,423,527 (30.7%) over
the same period for 1995. The increase is attributed to a significant
increase in the volume of loans. Interest from investment securities totaled
$1,381,167 for the 1996 period of which 27.2% or $376,100 represents tax-free
interest on state, county and municipal obligations. Twenty-eight percent of
interest from investment securities in the prior nine months ended September
30, 1995 was tax-free interest.
- 12 -
<PAGE>
PART I, ITEM 2 (CONTINUED)
FINANCIAL INFORMATION
Interest Expense
During the first nine months of 1996, interest expense to the Bank incurred
on behalf of depositors totaled $3,212,685. It was considerably higher than
interest expense of the comparable 1995 period which totals $2,443,847. The
increase of $768,838 (31.5%) results from increased interest-bearing deposits
which were $84,184,837 as of September 30, 1996 versus $74,902,165 as of
September 30, 1995.
Provision for Loan Losses
The Bank provided $227,000 for loan losses for the nine months ended
September 30, 1996 versus $66,857 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 September 30, 1996, the allowance for loan losses was 1.8 percent of
outstanding loans less unearned interest. As of September 30, 1995, the
comparable level was also 1.8 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 $821,779 for the nine months ended September
30, 1996 increased by $208,851 over the comparable period of 1995. Of the
total amount, 60.9 percent resulted from service charges on deposits. Service
charges on deposits increased significantly due to increased deposit
balances.
Salaries and employee benefits of $1,582,424 through the third quarter of
1996 were higher than $1,102,850 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 $3,070,922 for
the nine months ended September 30, 1996 and $2,289,242 for the same period
in 1995.
- 13 -
<PAGE>
PART I, ITEM 2 (CONTINUED)
FINANCIAL INFORMATION
Net Income
Net income for the nine-months ending September 30, 1996 totaled $1,145,600
as compared to $1,021,382 for the same period of 1995. Earnings per share
were $.74 for each period reflecting an increase in shares outstanding for
the nine months ending September 30, 1996. Return on average assets for the
nine months ended September 30, 1996 was 1.34 percent representing a decline
of .21 percent from the 1.55 percent earned during the first nine 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 third quarter of 1996 was 16.66 percent
as compared to 19.44 percent for the comparable period of 1995. The decline
can be attributed to the contribution of $1,831,500 of capital during the
first six months of 1996.
- 14 -
<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 6
EXHIBITS AND REPORTS ON FORM 8-K
(a) 4 - Instruments Defining the Rights of Security Holders
- Incorporation herein by reference to Pages 2 and 25 of the
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).
19 - Reports Furnished to Security Holders
- Incorporated herein by reference to Form SB-2 Registration
Statement filed with the Securities and Exchange Commission
(File No. 33-80076).
27 - Financial Data Schedule
(b) REPORTS ON FORM 8-K
No reports on Form 8-K have been filed by the registrant during the
quarter ended September 30, 1996.
- 15 -
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, SNB Bancshares, Inc. has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized:
SNB BANCSHARES, INC.
/s/ H. Averett Walker
- ---------------------------------------
H. Averett Walker
President
Date: November 14, 1996
----------------------------------
/s/ Michael T. O'Dillon
- ---------------------------------------
Michael T. O'Dillon
Senior Vice-President/Treasurer/
Controller/Chief Financial Officer
Date: November 14, 1996
----------------------------------
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<PERIOD-START> JAN-01-1996
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