<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, 1999
_________________________________________________
[_] 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.)
2918 RIVERSIDE DRIVE, MACON, GEORGIA 31204
- --------------------------------------------------------------------------------
(Address of Principal (Zip Code)
Executive Offices)
Issuer's Telephone Number (912) 722-6200
------------------------------------------------------
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:
3,340,624 Shares of $1.00 par value common stock as of June 30, 1999
- --------------------------------------------------------------------------------
Transitional Small Business Disclosure Format (Check One): Yes No
--- ----
<PAGE>
SNB BANCSHARES, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
Number
----------
<S> <C> <C>
PART I Financial Information
Condensed Consolidated Balance Sheet 1
Condensed Consolidated Statements of Income and Comprehensive Income 2
Condensed Consolidated Statements of Cash Flows 4
Notes to Condensed Consolidated Financial Statements 5
Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
PART II Other Information
ITEM 2 Changes in Securities 20
ITEM 4 Submission of Matters to a Vote of Security Holders 20
ITEM 6 Exhibits and Reports on Form 8-K 20
</TABLE>
<PAGE>
PART I, ITEM 1
Financial Information
SNB BANCSHARES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1999
(UNAUDITED)
($ IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
ASSETS
<TABLE>
<S> <C>
Cash and Due from Banks $ 18,357
------------
Federal Funds Sold 2,651
------------
Investments Securities 36,440
------------
Loans 188,981
------------
Premises and Equipment 7,990
------------
Other Assets 4,256
------------
Total Assets $ 258,675
============
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C>
Deposits $ 220,883
------------
Borrowed Money 8,959
------------
Other Liabilities 2,353
------------
232,195
------------
Stockholders' Equity
Common Stock, Par Value $1 Per Share; Authorized
10,000,000 Shares; Issued and Outstanding 3,340,624 Shares 3,341
Paid-In Capital 12,612
Retained Earnings 10,766
Accumulated Other Comprehensive Income, Net of Tax (239)
------------
26,480
------------
Total Liabilities and Stockholders' Equity $ 258,675
============
</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 SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED JUNE 30
(UNAUDITED)
($ IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)
<TABLE>
<CAPTION>
1999 1998
-------------------- --------------------
<S> <C> <C>
Interest Income $ 4,982 $ 4,594
Interest Expense 2,059 1,908
-------------------- --------------------
Net Interest Income 2,923 2,686
Provision for Loan Losses 149 188
-------------------- --------------------
Net Interest Income After Provision for Loan Losses 2,774 2,498
Noninterest Income 769 630
Noninterest Expense 2,377 2,053
-------------------- --------------------
Income Before Income Taxes 1,166 1,075
Income Taxes 375 360
-------------------- --------------------
Net Income 791 715
Other Comprehensive Income, Net of Income Tax
Unrealized Holding Gains (Losses) (286) 11
-------------------- --------------------
Comprehensive Income $ 505 $ 726
==================== ====================
Basic Earnings Per Share $ 0.24 $ 0.23
==================== ====================
Diluted Earnings Per Share $ 0.23 $ 0.21
==================== ====================
Weighted Average Common and Common Equivalent
Shares Outstanding 3,373,145 3,353,137
==================== ====================
</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 SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED JUNE 30
(UNAUDITED)
($ IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)
<TABLE>
<CAPTION>
1999 1998
-------------------- --------------------
<S> <C> <C>
Interest Income $ 9,845 $ 9,026
Interest Expense 4,033 3,798
-------------------- --------------------
Net Interest Income 5,812 5,228
Provision for Loan Losses 338 268
-------------------- --------------------
Net Interest Income After Provision for Loan Losses 5,474 4,960
Noninterest Income 1,528 1,201
Noninterest Expense 4,592 4,053
-------------------- --------------------
Income Before Income Taxes 2,410 2,108
Income Taxes 812 702
-------------------- --------------------
Net Income 1,598 1,406
Other Comprehensive Income, Net of Income Tax
Unrealized Holding Gains (Losses) (437) 40
-------------------- --------------------
Comprehensive Income $ 1,161 $ 1,446
==================== ====================
Basic Earnings Per Share $ 0.48 $ 0.45
==================== ====================
Diluted Earnings Per Share $ 0.47 $ 0.42
==================== ====================
Weighted Average Common and Common Equivalent
Shares Outstanding 3,373,145 3,343,492
==================== ====================
</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 SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30
(UNAUDITED)
($ IN THOUSANDS)
<TABLE>
<CAPTION>
1999 1998
------------------ -----------------
<S> <C> <C>
Cash Provided by Operations $ 1,566 $ 1,717
------------------ -----------------
Cash Flows from Investing Activities
Net Sale of Investment Securities
Available for Sale 1,534 4,386
Net Sale of Investment Securities
Held to Maturity 644 917
Loans to Customers (12,225) (14,180)
Purchase of Premises and Equipment (621) (731)
Other Real Estate and Repossessions 187 737
------------------ -----------------
(10,481) (8,871)
------------------ -----------------
Cash Flows from Financing Activities
Interest-Bearing Customer Deposits 12,542 11,760
Noninterest-Bearing Customer Deposits (9,232) (5,079)
Demand Note to the U.S. Treasury 500 129
Issuance of Common Stock - 579
Dividends Paid (418) (311)
Federal Funds Purchased 2,104 (33)
Repayments on Notes to Federal Home Loan Bank (54) 2,948
------------------ -----------------
5,442 9,993
------------------ -----------------
Net Increase (Decrease) in Cash and Cash Equivalents (3,473) 2,839
Cash and Cash Equivalents, Beginning 24,481 21,294
------------------ -----------------
Cash and Cash Equivalents, Ending $21,008 $24,133
================== =================
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
-4-
<PAGE>
PART I, ITEM 1 (CONTINUED)
Financial Information
SNB BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) Basis of Presentation
The consolidated financial statements include SNB Bancshares, Inc. (the Company)
and its wholly-owned subsidiaries, Security Bank of Bibb County, located in
Macon, Georgia and Security Bank of Houston County (formerly Crossroads Bank of
Georgia), located in Perry, Georgia (the Banks). Security Bank of Houston County
was acquired on August 8, 1998 in a business combination accounted for as a
pooling of interests. Accordingly, all financial information presented herein
prior to August 8, 1998 has been restated to reflect consolidated financial
position and results of operations. All intercompany accounts have been
eliminated in consolidation.
In June 1997, FASB issued Statement No. 130, Reporting Comprehensive Income. The
new statement is effective for periods beginning after December 15, 1997 and
requires that all changes in equity during a period from transactions and events
from nonowner sources be reported as other comprehensive income in the financial
statements and related notes. SNB Bancshares adopted SFAS 130 on January 1,
1998. Prior years have been restated to conform with the new requirements.
For the three months ended June 30, 1999, other comprehensive income is
comprised of the following:
<TABLE>
<CAPTION>
Before Tax Tax Effect Net of Tax
-------------------- ------------------- -------------------
($ in Thousands)
<S> <C> <C> <C>
Unrealized Loss on Securities
Loss Arising During Year $(433) $(147) $(286)
Reclassification Adjustment - - -
-------------------- ------------------- -------------------
Net Unrealized Loss $(433) $(147) $(286)
==================== =================== ===================
</TABLE>
The financial information included herein is unaudited; however, such
information reflects all adjustments which are, in the opinion of management,
necessary to fairly state the financial position and results of operations for
the interim periods presented.
-5-
<PAGE>
PART I, ITEM 1 (CONTINUED)
Financial Information
(2) Loans
Loans as of June 30, 1999 are comprised of the following:
<TABLE>
<CAPTION>
($ in Thousands)
--------------------
<S> <C>
Commercial $ 41,251
Real Estate-Construction 15,187
Real Estate-Other 116,171
Installment Loans to Individuals for Personal Expenditures 17,976
Other 791
--------------------
191,376
Allowance for Loan Losses (2,258)
Unearned Interest and Fees (137)
--------------------
$188,981
====================
</TABLE>
Loans are generally reported at principal amount less unearned interest and
fees. Impaired loans are recorded under 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.
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
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement No. 128, Earnings Per Share (SFAS 128). SFAS 128 replaced the
calculation of primary and fully diluted earnings per share (EPS) with basic and
diluted EPS. Unlike primary EPS, basic EPS excludes any dilutive effects of
options, warrants and convertible securities. Diluted EPS is very similar to
fully diluted EPS. All EPS amounts presented have been restated, as applicable,
to conform with the new requirements. The following presents earnings per share
for the three and six months ended June 30, 1999 under the requirements of SFAS
128:
-6-
<PAGE>
PART I, ITEM 1 (CONTINUED)
Financial Information
(3) Earnings Per Share (Continued)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, 1999 June 30, 1999
--------------------------- -------------------------
<S> <C> <C>
Basic Earnings Per Share
Net Income Per Common Share $0.24 $0.48
Weighted Average Common Shares 3,340,624 3,340,624
Diluted Earnings Per Share
Net Income Per Common Share $0.23 $0.47
Weighted Average Common Shares 3,373,145 3,373,145
</TABLE>
The assumed exercise of stock options is included in the diluted earnings per
share computation using the treasury stock method and assuming an average market
price for SNB Bancshares, Inc. stock of $19.0457 and $18.7630 for the three and
six month periods, respectively. SNB's stock is quoted on the NASDAQ market
under the symbol SNBJ.
(4) Allowance for Loan Losses
The allowance method is used in providing for losses on loans. Accordingly, all
loan losses decrease the allowance and all recoveries increase it. The provision
for loan losses is based on factors which, in management's judgment, deserve
current recognition in estimating possible loan losses. Such factors considered
by management include growth and composition of the loan portfolio, economic
conditions and the relationship of the allowance for loan losses to outstanding
loans.
An allowance for loan losses is maintained for all impaired loans. Provisions
are made for impaired loans upon changes in expected future cash flows or
estimated net realizable value of collateral. When determination is made that
impaired loans are wholly or partially uncollectible, the uncollectible portion
is charged off.
The following table presents the Company's loan loss experience on all loans for
the three months ended June 30:
-7-
<PAGE>
PART I, ITEM 1 (CONTINUED)
Financial Information
(4) Allowance for Loan Losses (Continued)
<TABLE>
<CAPTION>
($ in Thousands)
-------------------------------------
1999 1998
---------------- ----------------
<S> <C> <C>
Allowance for Loan Losses, April 1 $2,121 $1,898
---------------- ----------------
Charge-Offs
Commercial, Financial and Agricultural 4 16
Real Estate - Mortgage - -
Consumer 65 75
---------------- ----------------
69 91
---------------- ----------------
Recoveries
Commercial, Financial and Agricultural 38 2
Real Estate - Mortgage - -
Consumer 19 10
---------------- ----------------
57 12
---------------- ----------------
Net Charge-Offs (12) (79)
---------------- ----------------
Provision for Loan Losses 149 188
---------------- ----------------
Allowance for Loan Losses, June 30 $2,258 $2,007
================ ================
Ratio of Net Charge-Offs to Average Loans (0.01)% (0.05)%
================ ================
</TABLE>
-8-
<PAGE>
PART I, ITEM 1 (CONTINUED)
Financial Information
(4) Allowance for Loan Losses (Continued)
The following table presents the Company's loan loss experience on all loans for
the six months ended June 30:
<TABLE>
<CAPTION>
($ in Thousands)
-------------------------------------
1999 1998
--------------- ---------------
<S> <C> <C>
Allowance for Loan Losses, January 1 $2,070 $1,861
--------------- ---------------
Charge-Offs
Commercial, Financial and Agricultural 13 17
Real Estate - Mortgage - 64
Consumer 207 84
--------------- ---------------
220 165
---------------- ----------------
Recoveries
Commercial, Financial and Agricultural 38 7
Real Estate - Mortgage - -
Consumer 32 36
--------------- ---------------
70 43
--------------- ---------------
Net Charge-Offs (150) (122)
--------------- ---------------
Provision for Loan Losses 338 268
--------------- ---------------
Allowance for Loan Losses, June 30 $2,258 $2,007
=============== ===============
Ratio of Net Charge-Offs to Average Loans (0.08)% (0.08)%
=============== ===============
</TABLE>
(5) Investment Securities
The Bank records investment securities under Statement of Financial Accounting
Standards (SFAS) No. 115, Accounting for Certain Investments in Debt and Equity
Securities. In accordance with the provisions of SFAS 115, the Bank elected to
classify securities individually as either available for sale or held to
maturity. Securities classified as held to maturity are recorded at amortized
cost. Those classified as available for sale are adjusted to market value
through a tax-effected increase or reduction in stockholders' equity.
-9-
<PAGE>
PART I, ITEM 1 (CONTINUED)
Financial Information
(5) Investment Securities
Investment securities as of June 30, 1999 are summarized as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Securities Available for Sale Cost Gains Losses Value
------------------- ---------- ---------- -----
($ in Thousands)
<S> <C> <C> <C> <C>
U.S. Treasuries $ 2,487 $21 $ 2,508
U.S. Government Agencies
Mortgage Backed 9,259 5 $(128) 9,136
Other 16,220 2 (207) 16,015
State, County and Municipal 4,277 61 (59) 4,279
Other 1,542 (56) 1,486
------- --- ----- --------
$33,785 $89 $(450) $33,424
======= === ===== ========
Securities Held to Maturity
State, County and Municipal $ 3,016 $66 $ (2) $ 3,080
======= === ===== ========
</TABLE>
Unrealized holding losses, net of tax, on securities available for sale in the
amount of $239,000 have been recorded in stockholders' equity as of June 30,
1999.
(6) Premises and Equipment
Premises and equipment are comprised of the following as of June 30, 1999:
<TABLE>
<CAPTION>
($ in
Thousands)
------------
<S> <C>
Land $ 2,116
Building 4,064
Furniture, Fixtures and Equipment 4,246
Leasehold Improvements 192
Construction in Progress 181
------------
10,799
(2,809)
------------
$ 7,990
============
</TABLE>
Depreciation charged to operations totaled $214,322 for the three months ended
June 30, 1999 and $417,047 for the six months ended June 30, 1999.
-10-
<PAGE>
PART I, ITEM 1 (CONTINUED)
Financial Information
(7) Stockholders' Equity
During 1996, the board of directors of SNB Bancshares, Inc. adopted the 1996
incentive stock option plan which granted key officers the right to purchase
shares of common stock at the price of $9.00, as adjusted for stock splits,
representing the market value of the stock at the date of the option grant.
Option holders may exercise in accordance with a vesting schedule beginning with
20 percent the first year and increasing 20 percent for each year thereafter
such that 100 percent of granted options may be exercised by the end of the
fifth year. Unexercised options expire at the end of the tenth year. A summary
of option transactions through June 30, 1999 follows:
<TABLE>
<CAPTION>
Incentive
Stock
Options
---------
<S> <C>
Granted 62,500
Canceled -
Exercised -
--------
Outstanding, June 30, 1999 62,500
========
Eligible to be Exercised, June 30, 1999 25,000
========
</TABLE>
The Company is required to maintain minimum amounts of capital to total Arisk
weighted@ assets, as defined by the banking regulations. As of June 30, 1999,
the Company 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
average assets) of at least 4 percent. The Company's actual ratios as of June
30, 1999 are as follows:
<TABLE>
<CAPTION>
Actual Minimum
------ -------
<S> <C> <C>
Tier 1 Capital Ratio 13.22% 4.00%
Total Capital Ratio 14.35% 8.00%
Leverage Ratio 10.72% 4.00%
</TABLE>
(8) Noncash Financing Activities
Noncash investing activities for the six months ended June 30 are as follows:
<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
Acquisition of Real Estate
through Loan Foreclosure $ - $64,956
======= =======
</TABLE>
-11-
<PAGE>
PART I, ITEM 2
Financial Information
SNB BANCSHARES, INC. AND SUBSIDIARIES
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, 1999 and 1998. 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 report. SNB owns and operates Security
Bank of Bibb County and Security Bank of Houston County (formerly Crossroads
Bank of Georgia). SNB and its wholly-owned subsidiaries are collectively known
as the "Company."
Overview
The Company's net income for the three-month and six-month periods ended June
30, 1999 was $791,000 or $0.23 diluted earnings per share and $1,598,000 or
$0.47 diluted earnings per share, respectively, compared to $715,000 or $0.21
and $1,406,000 or $0.42 in the same three-month and six-month periods in the
preceding year. The increase in net income for the three months and six months
ended June 30, 1999 primarily relates to the continued growth of the Company
largely recognized in its loan portfolio.
The Company recorded an annualized return on average assets of 1.31 percent for
the six-month period ended June 30, 1999 compared to 1.31 percent for the same
period in 1998. Return on average equity of 12.31 percent was recorded for the
six-month period ended June 30, 1999, compared to 11.92 percent for the same
period in 1998.
At June 30, 1999, the Company had total assets of $259 million compared to $252
million at December 31, 1998. Management attributes the majority of this
increase to continued growth of the Company's loan portfolio. At June 30, 1998,
the Company had total assets of $227 million compared to $216 million at
December 31, 1997. Total interest-earning assets remained relatively constant
over this time period amounting to $228 million or 88.17 percent of total assets
as of June 30, 1999, compared to $227 million or 89.81 percent of total assets
as of December 31, 1997.
Financial Condition
Cash and Cash Equivalents
Cash and due from banks increased approximately $4.6 million to $18.4 million at
June 30, 1999 from $13.8 million at December 31, 1998 and federal funds sold
decreased by $7.9 million or 74.36 percent to $2.7 million at June 30, 1999 from
$10.7 million at December 31, 1998.
-12-
<PAGE>
PART I, ITEM 2 (CONTINUED)
Financial Information
Financial Condition (Continued)
Investment Securities
Investment securities continue to show a slight decrease since December 31, 1998
when investment securities totaled $39.3 million. As of June 30, 1999,
investment securities totaled $36.4 million, a decrease of $2.9 million or 7.4
percent since December 31, 1998. Management attributes a significant portion of
the reduction to the funding of new loans. The Company's investment in
securities is largely centered in U.S. Government Agency securities.
Loans Receivable, Net
Aggregate loans receivable totaled $189 million at June 30, 1999, an increase of
$11.9 million or 6.72 percent from $177.1 million at December 31, 1998. The
majority of new loans being funded are commercial and mortgage loans. The mix of
total loans is substantially unchanged at this time.
Nonperforming Assets
The Company's total nonperforming assets approximate $2.0 million or 0.8 percent
of total assets at June 30, 1999 compared to $1.5 million or 0.6 percent at
December 31, 1998. Nonperforming loans increased $643,000 or 80.7 percent from
$797,000 at December 31, 1998 to approximately $1.4 million at June 30, 1999.
The amount of other real estate owned that was held by the Company on June 30,
1999 amounted to $540,000, a decrease of $181,000 or 25.1 percent since December
31, 1998. There were no foreclosures of real estate during the first two
quarters of 1999.
The following table presents the Company's nonperforming assets as of June 30,
1999:
<TABLE>
<CAPTION>
($ in
Thousands)
----------
<S> <C>
Impaired and Other Nonaccrual Loans $ 777
Loans Past Due 90 Days or More and Still Accruing Interest 663
Restructured Loans not Included in the Above -
-------
Total Nonperforming Loans 1,440
Other Real Estate Owned 540
-------
Total Nonperforming Assets $ 1,980
=======
</TABLE>
Deposits
Deposits increased $3.3 million or 1.52 percent from $217.6 million at December
31, 1998 to $220.9 million at June 30, 1999. The fluctuations in deposits are
relatively insignificant and considered normal.
-13-
<PAGE>
PART I, ITEM 2 (CONTINUED)
Financial Information
Financial Condition (Continued)
Equity
At June 30, 1999, total equity was $26.5 million or 10.24 percent of total
assets compared to $25.7 million or 10.18 percent of total assets as of December
31, 1998. Total equity increased primarily due to the retention of net income
during the intervening period, net of dividends paid.
Results of Operations
Net Income
The Company's net income increased 10.63 percent to $791,000 for the three
months ended June 30, 1999, and 13.66 percent to $1.6 million for the six months
ended June 30, 1999 compared to $715,000 and $1.4 million recorded in the
comparable prior periods. This increase in net income is primarily due to
continued loan growth resulting in a 13.4 percent increase in interest and fees
on loans along with an increase of 78.4 percent in mortgage origination fees
resulting from the establishment of the Company s Houston and Chatham County
mortgage lending offices. Noninterest expenses also increased for the six months
ended June 30, 1999 to $4.6 million from $4.1 million for the six months ended
June 30, 1998.
Net Interest Income
The Company's net interest margin increased 8.8 percent for the comparable
three-month periods and increased 11.2 percent for the comparable six-month
periods. Net interest income before the provision for loan losses amounted to
$2.9 million and $5.8 million for the three-month and six-month periods ended
June 30, 1999, respectively, versus $2.7 million and $5.2 million for the
comparable periods ended June 30, 1998, respectively.
Total interest income increased to $5.0 million and $9.8 million for the three-
month and six-month periods ended June 30, 1999, respectively, from $4.6 million
and $9.0 million during the comparable prior year periods, respectively. Again,
the increase is primarily due to an increase in loans of 20.2 percent as of June
30, 1999 compared to June 30, 1998.
Total interest expense increased 7.9 percent and 6.2 percent for the three
months and six months ended June 30, 1999, respectively, compared to the prior
periods ended June 30, 1998.
The following table presents the effective yields and costs of funds for the
six-month periods ended June 30, 1999 and 1998:
-14-
<PAGE>
PART I, ITEM 2 (CONTINUED)
Financial Information
Results of Operations (Continued)
Net Interest Income (Continued)
Average Balance Sheets
<TABLE>
<CAPTION>
Average Balance Rate/Yield
Six Months Ended Six Months Ended
June 30 June 30
------------------------------- ------------------------
1999 1998 1999 1998
--------------- ------------- ----------- ----------
($ in Thousands)
<S> <C> <C> <C> <C>
Interest-Earning Assets
Loans $183,287 $146,722 9.52% 10.49%
Securities 36,285 37,021 5.83 5.62
Federal Funds Sold 2,942 10,531 3.98 5.49
--------------- ------------- ----------- ----------
Total Interest-Earning Assets $222,514 $194,274 8.85% 9.29%
=============== ============= =========== ==========
Interest-Bearing Liabilities
Deposits $213,591 $189,662 3.58% 3.91%
Borrowings 8,661 3,208 4.85 5.67
--------------- ------------- ----------- ----------
Total Interest-Bearing Liabilities $222,252 $192,870 3.63% 3.94%
=============== ============= =========== ==========
Interest Rate Spread 5.22% 5.35%
=========== ==========
Net Interest Margin 5.22% 5.38%
=========== ==========
</TABLE>
-15-
<PAGE>
PART I, ITEM 2 (CONTINUED)
Financial Information
Results of Operations (Continued)
Interest Income and Interest Expense (Continued)
The following table provides a detailed analysis of the changes in interest
income and interest expense due to changes in rate and volume for the six months
ended June 30, 1999 compared to the six months ended June 30, 1998.
Rate/Volume Analysis
Changes From 1998 to 1999 (1)
-------------------------------------
Net
Volume Rate Change
--------- --------- ----------
($ in Thousands)
Interest Income
Loans $3,836 $(1,772) $ 2,064
Securities (41) 76 35
Federal Funds Sold (417) (44) (461)
--------- --------- ----------
Total Interest Income 3,378 (1,740) 1,638
--------- --------- ----------
Interest Expense
Deposits 935 (703) 232
Borrowings 309 (71) 238
--------- --------- ----------
Total Interest Expense 1,244 (774) 470
--------- --------- ----------
Net Interest Income $2,134 $ (966) $ 1,168
========= ========= ==========
(1) Changes in net interest income for the periods, based on either changes
in average balances or changes in average rates for interest-earning
assets and interest-bearing liabilities, are shown on this table. During
each year there are numerous and simultaneous balance and rate changes;
therefore, it is not possible to precisely allocate the changes between
balances and rates. For the purpose of this table, changes that are not
exclusively due to balance changes or rate changes have been attributed
to rates.
-16-
<PAGE>
PART I, ITEM 2 (CONTINUED)
Financial Information
Results of Operations (Continued)
Provision for Loan Losses
The Company establishes a provision for loan losses, which is charged to
operations, in order to maintain the allowance for loan losses at a level which
is deemed to be appropriate by management. The amount of this provision is based
upon an assessment of prior loss experience, the volume and type of lending
presently being conducted by the Company, industry standards, past due loans,
economic conditions of the Company's market area and other factors related to
the collectability of the Company's loan portfolio. For the three month and six
month periods ended June 30, 1999, the provision for loan losses totaled
$149,000 and $338,000, respectively. The provision for loan losses was $188,000
and $268,000 for the three month and six month periods ending June 30, 1998,
respectively.
Although management utilizes its best judgment in providing for inherent losses,
there can be no assurance that the Company will not have to increase its
provisions for loan losses in the future as a result of future increases in
nonperforming loans or for other reasons which could adversely affect the
Company's results of operations. In addition, various regulatory agencies, as an
integral part of their examination process, periodically review the allowance
for loan losses. Such agencies may require the Company to recognize additions to
the allowance for loan losses based on their judgments of information which is
available to them at the time of their examination.
Noninterest Income and Expense
Noninterest income for the three months and six months ended June 30, 1999
totaled $769,000 and $1.5 million, respectively, compared to $630,000 and $1.2
million for the comparable prior periods, respectively. The increase was largely
the result of an increase in mortgage origination fees generated by the
Company's mortgage lending offices operated in Warner Robins and Savannah,
Georgia. Service charges on deposit accounts decreased 5.01 percent and 2.3
percent for the three months and six months ended June 30, 1999, respectively,
from the comparable prior periods.
Total noninterest expense increased 13.6 and 13.3 percent for the three months
and six months ended June 30, 1999, respectively, compared to the same periods
in 1998. This increase can be attributed to the continued growth of the Company
through personnel and capital assets.
Income Taxes
Income tax expense totaled $375,000 and $812,000 for the three-month and six-
month periods ended June 30, 1999, respectively, compared to $360,000 and
$702,000 for the comparable prior periods, respectively. These amounts resulted
in the effective tax rates of 34 percent for 1999 and 33 percent for 1998.
-17-
<PAGE>
PART I, ITEM 2 (CONTINUED)
Financial Information
Results of Operations (Continued)
Liquidity and Capital Adequacy
Shareholders' equity increased to $26.5 million at June 30, 1999 due primarily
to retention of earnings, net of dividends paid. Unrealized losses, net of tax,
on available-for-sale investment securities totaled $239,000 at June 30, 1999.
It is management's intention to continue paying a reasonable return on
shareholders' investment while retaining adequate earnings to allow for
continued growth.
The Federal Reserve Board measures capital adequacy for bank holding companies
by using a risk-based capital frame-work and by monitoring compliance with
minimum leverage ratio guidelines. The minimum ratio of total risk-based capital
to risk-adjusted assets is 8 percent at June 30, 1999, of which 4 percent must
be Tier 1 capital. The Company's total risk-based capital ratio was 14.35
percent at June 30, 1999. The Company's Tier 1 risk-based capital ratio was
13.22 percent at June 30, 1999.
In addition, the Federal Reserve Board has established minimum leverage ratio
guidelines for bank holding companies. Those guidelines provide for a minimum
leverage ratio of 3 percent for financial institutions that meet certain
criteria, including that they maintain the highest regulatory rating. All other
financial institutions are required to maintain a leverage ratio of 4 percent.
The Company's leverage ratio was 10.72 percent at June 30, 1999.
The Federal Deposit Insurance Corporation Improvement Act (FDICIA) establishes
minimum capital requirements for all depository institutions and established
five capital tiers: "well capitalized," "adequately capitalized,"
"under-capitalized," "significantly under-capitalized" and "critically
under-capitalized." FDICIA imposes significant restrictions on the operations of
a bank that is not at least adequately capitalized. A depository institution's
capital tier will depend upon where its capital levels are in relation to
various other capital measures that include a risk-based capital measure, a
leverage ratio capital measure and other factors. Under regulations adopted, for
an institution to be well capitalized it must have a total risk-based capital
ratio of at least 10 percent, a Tier 1 risk-based capital ratio of at least 6
percent and a Tier 1 leverage ratio of at least 5 percent. The institution may
also not be subject to any specific capital order or directive.
At June 30, 1999, both of the Company's subsidiary banks were in compliance with
established guidelines.
Market Risk and Interest Rate Risk
Market risk is the risk of loss from adverse changes in market prices and rates.
The Company's market risk arises primarily from interest rate risk inherent in
its lending, investment and deposit taking activities. To that end, management
actively monitors and manages its interest rate risk exposure.
-18-
<PAGE>
PART I, ITEM 2 (CONTINUED)
Financial Information
Results of Operations (Continued)
Year 2000 Issues
The Company relies heavily upon computers for the daily conduct of business and
will commit all resources necessary to achieve a satisfactory and timely
solution to computer based problems related to the Year 2000 and beyond.
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
programs that have time-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000.
In accordance with sound management policy and directives from regulatory
agencies, the Company began the Year 2000 review of hardware and software in
1997. The review included not only computer and information systems but heating
and cooling systems, alarms, vaults, elevators and other office equipment, and
was completed in 1998. Items that were found to be noncompliant were slated for
upgrade or replacement.
The Company presently believes that, with modification to existing software and
conversion to new software, the Year 2000 problem will not be a significant
operational problem for the Company's computer system or the third parties'
computer systems with whom the Company relies upon.
Forward Looking Statements
Within these financial statements we have included certain "forward looking
statements" concerning the future operations of the Company. It is management's
desire to take advantage of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. This statement is for the express
purpose of availing the Company of the protections of such safe harbor with
respect to all "forward looking statements" contained in our financial
statements. We have used "forward looking statements" to describe the future
plans and strategies including our expectations of the Company's future
financial results. Management's ability to predict results or the effect of
future plans and strategy is inherently uncertain. Factors that could affect
results include interest rate trends, competition, the general economic climate
in the middle Georgia area, the southeastern United States region and the
country as a whole, loan delinquency rates, Year 2000 uncertainties, and changes
in federal and state regulation. These factors should be considered in
evaluating the "forward looking statements," and undue reliance should not be
placed on such statements.
-19-
<PAGE>
PART II
Other Information
SNB BANCSHARES, INC. AND SUBSIDIARY
ITEM 2
Changes in Securities (Limitations Upon Payment of Dividends)
The information required for limitations upon payment of dividends is
incorporated herein by reference to the Company's annual report of 10-KSB,
Exhibit 99(a) footnote 24, filed with the Securities and Exchange Commission for
the year ended December 31, 1998 (File No. 000-23261).
ITEM 4
Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of securities holders during the
quarter ended June 30, 1999.
ITEM 6
Exhibits and Reports on Form 8-K
Page
----
(a) Exhibits Included Herein and Incorporated by Reference:
3(a) - Articles of Incorporation N/A
- Filed as Exhibit 3.2 to the Registrant's
Registration Statement on Form S-4
(File No. 333-49977) Filed with the Commission
on April 13, 1999 and Incorporated Herein
3(b) - Bylaws Attachment
11 - Statement Re Computation of Per Share Earnings Attachment
27 - Financial Data Schedule Attachment
(b) Reports on Form 8-K
No reports on Form 8-K have been filed by the registrant during the
quarter ended June 30, 1999.
-20-
<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/Chief Executive Officer
Date: August 13, 1999
/s/ Michael T. O'Dillon
______________________________________
Michael T. O'Dillon
Senior Vice-President/Treasurer/Chief Financial Officer
Date: August 13, 1999
-21-
<PAGE>
AMENDED AND RESTATED BYLAWS
OF
SECURITY BANK OF BIBB COUNTY
(Formerly Security National Bank)
-22-
<PAGE>
EXHIBIT 3(b)
TABLE OF CONTENTS
ARTICLE ONE - OFFICES
Section 1.1 Registered Office
Section 1.2 Other Offices
ARTICLE TWO - SHAREHOLDERS' MEETINGS
Section 2.1 Place of Meetings
Section 2.2 Shareholders' Meeting
Section 2.3 Substitute Shareholders' Meetings
Section 2.4 Special Meetings
Section 2.5 Notice of Meetings
Section 2.6 Quorum
Section 2.7 Voting of Shares
Section 2.8 Proxies
Section 2.9 Presiding Officer
Section 2.10 Adjournments
Section 2.11 Action of Shareholders Without a Meeting
ARTICLE THREE - THE BOARD OF DIRECTORS
Section 3.1 General Powers
Section 3.2 Requirements
Section 3.3 Number, Election and Term of Office
Section 3.4 Oath of Directors
Section 3.5 Removal
Section 3.6 Vacancies
Section 3.7 Compensation
Section 3.8 Committees of the Board of Directors
Section 3.9 Honorary and Advisory Directors
ARTICLE FOUR - MEETINGS OF THE BOARD OF DIRECTORS
Section 4.1 Regular Meetings
Section 4.2 Special Meetings
Section 4.3 Place of Meetings
Section 4.4 Notice of Meetings
Section 4.5 Quorum
Section 4.6 Vote Required for Action
Section 4.7 Action by Directors Without a Meeting
-23-
<PAGE>
ARTICLE FIVE - NOTICE AND WAIVER
Section 5.1 Procedure
Section 5.2 Waiver
ARTICLE SIX - OFFICERS
Section 6.1 Bank Officers
Section 6.2 Election and Term
Section 6.3 Compensation
Section 6.4 Removal
Section 6.5 Chairman of the Board
Section 6.6 President
Section 6.7 Officer in Place of President
Section 6.8 Secretary
Section 6.9 Bonds
Section 6.10 Reimbursement by Officers
ARTICLE SEVEN - DIVIDENDS
Section 7.1 Time and Conditions of Declaration
Section 7.2 Share Dividends - Treasury Shares
Section 7.3 Share Dividends - Unissued Shares
Section 7.4 Share Splits
ARTICLE EIGHT - SHARES
Section 8.1 Authorization and Issuance of Shares
Section 8.2 Share Certificates
Section 8.3 Rights of Bank with Respect to Registered Owners
Section 8.4 Transfer of Shares
Section 8.5 Duty of Bank to Register Transfer
Section 8.6 Lost, Stolen, or Destroyed Certificates
Section 8.7 Fixing of Record Date
Section 8.8 Record Date if None Fixed
ARTICLE NINE - INDEMNIFICATION
Section 9.1 Indemnification
Section 9.2 Payment of Expenses in Advance
Section 9.3 Insurance
Section 9.4 Rights Not Exclusive
-24-
<PAGE>
ARTICLE TEN - EMERGENCY OPERATIONS
Section 10.1 General
Section 10.2 Meeting of Board of Directors
Section 10.3 Interim Administration
Section 10.4 Interim Office
ARTICLE ELEVEN - MISCELLANEOUS
Section 11.1 Inspection of Books and Records
Section 11.2 Fiscal Year
Section 11.3 Seal
Section 11.4 Annual Statements
Section 11.5 Contracts, Checks, Drafts, Reports, etc.
Section 11.6 Legal Restrictions
ARTICLE TWELVE - AMENDMENTS
Section 12.1 Power to Amend Bylaws
Section 12.2 Conditions
Section 12.3 Inspection
Section 12.4 Filing
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<PAGE>
ARTICLE ONE
OFFICES
1.1 Registered Office. The bank shall maintain a registered office in the
-----------------
county in the State of Georgia where the bank is authorized to conduct its
general business. Unless the Board of Directors designates otherwise, the bank's
main office shall be the registered office.
1.2 Other Offices. In addition to its registered office, the bank also may have
-------------
offices at such other place or places, within or outside the county in which the
registered office is located, as the Board of Directors may from time to time
select, or as the business of the bank may require or make desirable subject to
the banking laws of this State.
ARTICLE TWO
SHAREHOLDERS' MEETINGS
2.1 Place of Meetings. Meetings of the shareholders of the bank may be held at
-----------------
any place within or outside the State of Georgia, as set forth in the notice
thereof, or, in the event of a meeting held pursuant to waiver of notice, as set
forth in the waiver, or, if no place is so specified, at the registered office
of the bank.
2.2 Shareholders' Meeting. The annual meeting of the shareholders of the bank
---------------------
shall be held on the date set by the Board of Directors upon proper notice to
the shareholders for the purpose of electing directors and transacting any and
all business that may properly come before the meeting.
2.3 Substitute Shareholders' Meetings. If the annual meeting is not held on the
---------------------------------
day designated in Section 2.2 any business, including the election of directors
which might properly have been acted upon at that meeting, may be transacted at
any subsequent shareholders' meeting held pursuant to these bylaws or held
pursuant to a court order requiring a substitute annual meeting.
2.4 Special Meetings. Special meetings of the shareholders or a special meeting
----------------
in lieu of the annual meeting of shareholders may be called at any time by the
President, Chairman of the Board, or the Board of Directors. Special meetings of
shareholders or a special meeting in lieu of the annual meeting of shareholders
shall be called by the bank upon the written request of the holders of twenty-
five percent (25%) or more of all the outstanding shares of capital stock of the
bank entitled to vote in an election of directors.
2.5 Notice of Meetings. The notice of the shareholders' meeting and any special
------------------
meetings shall be delivered in person, by first-class mail, or by telegram,
charges prepaid, at the direction of the President, the Secretary, or the
officer or persons calling the meeting, to each shareholder of record entitled
to vote at such meeting, or in the case of an annual meeting or substitute
annual meeting, to the last known address of the shareholder. The notice of all
meetings shall specify the date, place and time of the meeting. The notice of a
special meeting shall specify the general nature of the business to be
transacted. The notice of the meeting of the shareholders shall be given not
less than ten (10) nor more than fifty' (50) days prior to the meeting.
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<PAGE>
2.6 Quorum. A majority of the shares entitled to vote, represented in person or
------
by proxy, shall constitute a quorum at a meeting of the shareholders. If a
quorum is present, a majority of the shares represented at the meeting and
entitled to vote on the subject matter shall determine any matter coming before
the meeting unless a different vote is required by the Financial Institutions
Code of Georgia, by the Articles of Incorporation of the bank or by these
bylaws. The shareholders at a meeting at which a quorum is once present may
continue to transact business at the meeting or at any adjournment thereof,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum. If a meeting cannot be organized for lack of a quorum, those
shareholders present may adjourn the meeting to such time and place as they may
determine. It shall not be necessary to give any notice of the adjourned meeting
if the time and place to which the meeting is adjourned are announced at the
meeting at which the adjournment is taken. If, however, after the adjournment of
the Board of Directors fixes a new record date for the adjourned meeting, a
notice of the adjoined meeting shall be given to each shareholder of record on
the new record date entitled to vote at such meeting. In the case of a meeting
for the election of directors which is twice adjourned for lack of a quorum,
those present at the second of such adjourned meetings, of which notice has been
given in writing to shareholders, shall constitute a quorum for the election of
directors without regard to the other quorum requirements of the Financial
Institutions Code of Georgia, the Articles of Incorporation of the bank, or
these bylaws.
2.7 Voting of Shares. Each outstanding share having voting rights, regardless
----------------
of class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders. Voting on all matters shall be by voice vote or by show
of hands unless any qualified voter, prior to the voting on any matter, demands
vote by ballot, in which case each ballot shall state the name of the
shareholder voting and the number of shares voted by him, and if such ballot be
cast by proxy, it shall also state the name of such proxy.
2.8 Proxies. A shareholder entitled to vote pursuant to Section 2.7 may vote in
-------
person or by proxy executed in writing by the shareholder or by his attorney in
fact. A proxy shall not be valid after eleven (11) months from the date of its
execution, unless a longer period is expressly stated therein. If the validity
of any proxy is questioned it must be submitted to the secretary of the
shareholders' meeting for examination or to a proxy officer or committee
appointed by the person presiding at the meeting. The secretary of the meeting
or, if appointed, the proxy officer or committee, shall determine the validity
or invalidity of any proxy submitted and referenced by the secretary in the
minutes of the meeting. The determination as to the regularity of a proxy shall
be received as prima facie evidence of the facts stated for the purpose of
establishing the presence of a quorum, at such meeting and for all other
purposes.
2.9 Presiding Officer. The Chairman of the Board of Directors or, in the
-----------------
absence of a Chairman of the Board of Directors, the Vice Chairman and in the
absence of both, the President, shall serve as chairman of every shareholders'
meeting unless some other person is elected to serve as chairman by a majority
vote of the shares represented at the meeting. The chairman shall appoint such
persons as he deems required to assist with the meeting.
2.10 Adjournments. Any meeting of the shareholders, whether or not a quorum is
------------
present, may be adjourned by the holders of a majority of the voting shares
represented at the meeting to reconvene at a specific time and place. Except as
otherwise provided by Section 2.6, it shall not be necessary to give any notice
of the reconvened meeting or of the business to be transacted, if the time and
place of the reconvened meeting are announced at the meeting which was
adjourned. At any such reconvened meeting, any business may be transacted which
could have been transacted at the meeting which was adjourned.
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<PAGE>
2.11 Action of Shareholders Without a Meeting. Any action required by the
---------------------------------------
Financial Institutions Code of Georgia to be taken at a meeting of the
shareholders, or any action which may be taken without a meeting if a written
consent, setting forth the action so taken, shall be signed by each of the
shareholders entitled to vote with respect to the subject matter thereof. Upon
filing with the officer of the bank having custody of its books and records,
such consent shall have the same force and effect as a unanimous vote of the
shareholders at a special meeting called for the purpose of considering the
action authorized.
ARTICLE THREE
THE BOARD OF DIRECTORS
3.1 General Powers. The Board of Directors is responsible for the
--------------
administration of the business and affairs of the bank. In addition to the
powers and authority expressly conferred upon it by these bylaws, the Board of
Directors may exercise all such powers of the bank and do all such lawful acts
and things as are permitted by law, any legal agreement among shareholders, the
Articles of Incorporation, or these bylaws.
3.2 Requirements. Each director of the bank shall be a United States citizen,
------------
and at least a majority of the directors shall reside in the State of Georgia or
reside within forty (40) miles of any office of the bank authorized to offer a
complete banking or trust service. Each director must file a financial
statement, on forms prescribed by the Department of Banking and Finance, with
the chief executive officer of the bank. The financial statement shall be
revised annually, but in no event shall the statement on file be more than
eighteen months old. At the discretion of the Board of Directors, the financial
statements may be maintained in sealed envelopes available for inspection only
by State or Federal examiners.
3.3 Number, Election and Term of Office. The Board of Directors of the bank
-----------------------------------
shall consist of not less than five (5), nor more than twenty-five (25) persons,
with the exact number within such minimum and maximum to be fixed and determined
from time to time by resolution of the Board of Directors, or by resolution of
the shareholders at any annual or special meeting of shareholders. The Board of
Directors may increase or decrease the number of directors by not more than two
(2) in any one year, as long as such increase or decrease does not place the
number of directors at less than five (5), or more than twenty-five (25). Except
as provided in Section 3.6, the directors shall be elected by the affirmative
vote of a majority of the shares represented at the annual meeting of
shareholders. Each director, except in the case of his earlier death,
resignation, retirement, disqualification, or removal, shall serve until the
next succeeding annual meeting and thereafter until his successor shall have
been elected and qualified.
3.4 Oath of Directors. Before assuming office, each director shall take an oath
------------------
or affirmation that he shall diligently and honestly perform his duties in the
administration of the bank, that he will not permit a willful violation of laws
by the bank, and that he meets the eligibility requirements of the Financial
Institutions Code of Georgia, the bank's Articles of Incorporation, and these
bylaws. Such oath or affirmation shall be signed by the director and shall be
placed into the minutes of the meetings of the Board of Directors.
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<PAGE>
3.5 Removal. The entire Board of Directors or an individual director may be
-------
removed from office without cause by the affirmative vote of shareholders
entitled to cast at least a majority of the votes which all shareholders would
be entitled to cast at an annual election of directors. In addition, the Board
of Directors may remove a director from office if such director is adjudicated
an incompetent by a court; is convicted of a felony; does not, within sixty (60)
days after being elected, accept the office in writing or by attendance at a
meeting of the Board of Directors and fulfill other requirements for holding the
office of director; fails to attend regular meetings of the Board of Directors
for six (6) consecutive meetings without having been excused by the Board of
Directors; or was an employee or duly elected officer of the bank or trust
company and was discharged, or resigned at the request of the Board of Directors
for reasons relating to performance of duties as an employee or officer of the
bank.
3.6 Vacancies. A vacancy occurring in the Board of Directors, whether caused
---------
by removal or otherwise and including vacancies resulting from an increase in
the number of directors, may be filled for the unexpired term, and until the
shareholders shall have elected a successor, by the affirmative vote of a
majority of the directors remaining in office though less than a quorum of the
Board of Directors.
3.7 Compensation. Directors may receive such compensation for their services
------------
as directors as may from time to time be fixed by vote of the Board of
Directors. A director may also serve the bank in a capacity other than that of
director and receive compensation, as determined by the Board of Directors, for
services rendered in such other capacity. Provided, however, no director shall
be compensated from commissions derived from the sale of credit related
insurance (credit life, disability, accident and health insurance, etc.) where
premiums paid by a bank customer for such Insurance are financed by the bank as
part of the credit extended, or where purchase of the insurance is a condition
precedent to the granting of credit.
3.8 Committees of the Board of Directors. The Board of Directors shall have
------------------------------------
the following standing committees:
(A) Loan Committee. There shall be a loan committee composed of not less
--------------
than three directors, appointed by the board annually or more often. The loan
committee shall have power to discount and purchase bills, notes, and other
evidences of debt, to buy and sell bills of exchange, to examine and approve
loans and discounts, to exercise authority regarding loans and discounts, and to
exercise, when the board is not in session, all other powers of the board that
may lawfully be delegated. In order to carry out these duties and
responsibilities, the loan committee will be responsible for the development of
the association's loan policy, including individual lending limits and
recommending the policy to the board for adoption.
The loan committee will meet approximately weekly to approve loan
applications of amounts in excess of individual loan officers' lending limits
set by the board in the association's loan policy and loan applications which
may vary from normal loan policy. This committee will monitor compliance with
association's policy in the credit operations of the association. This committee
will review monthly all loans past-due 30 days or more. The loan committee shall
at least annually review the board's loan policy, and recommend to the board
changes that may be desirable, including lending limits of individual lending
officers.
The loan committee shall keep minutes of its meetings, and such minutes
shall be submitted at the next regular meeting of the board of directors at
which a quorum is present, and any action taken by the board with respect
thereto shall be entered in the minutes of the board.
-29-
<PAGE>
(B) Personnel Committee. This committee will be responsible for developing
-------------------
the association's personnel policy. It will review need for additions to officer
staff at the Vice President level or above, will review management's
recommendation for nominees to those positions and recommend such persons to the
board for election. It will be the responsibility of this committee to recommend
salary changes for senior level management officers to the board for approval as
well as guidelines for management administration of other officers and non-
officer staff salaries. This committee shall meet at least annually to review
the board's personnel policy and recommend any changes that are needed to the
board for adoption.
(C) The Board of Directors, by resolution adopted by a majority of the
full Board of Directors, may designate from among its members one or more other
committees, each consisting of three or more directors. Each committee shall
have the authority of the Board of Directors in regard to the business of the
bank to the extent set forth in the resolution establishing such committee,
subject to the limitations set forth in state and federal laws and regulations.
3.9 Honorary and Advisory Directors. At the annual meeting of shareholders
-------------------------------
following the 75th birthday of a director, the director shall retire as an
active director. A director may voluntarily retire from active service at any
time after reaching age 70. At the request of a retiring director that is 70
years of age or older at the time of retirement, such director shall become a
Director Emeritus for a period of five years following the date of retirement.
The Board of Directors of the bank may also appoint any individual as an
Honorary Director, Director Emeritus, or member of the advisory board
established by the Board of Directors. Any individual automatically becoming an
Honorary Director or appointed an Honorary Director, Director Emeritus, or
member of an advisory board as provided by this Section 3.9 may be compensated
as provided in Section 3.7. However, such director may not vote at any meeting
of the Board of Directors or be counted in determining a quorum as provided in
Section 4.5 and shall not have any responsibility or be subject to any liability
imposed upon a director, or otherwise be deemed a director.
ARTICLE FOUR
MEETINGS OF THE BOARD OF DIRECTORS
4.1 Regular Meetings. An annual organizational meeting of the Board of
----------------
Directors shall be held on the day of and after the annual meeting of the
shareholders of the bank. In the event the annual shareholders' meeting is not
held as provided by Sections 2.4 or 2.11, such organizational meeting shall be
held as herein provided for regular meetings. In addition, regular meetings of
the Board of Directors shall be held every month during the calendar year at a
date, time and place set by the Board except during the month in which the
organizational meeting of the Board of Directors is held. The Board of Directors
and President are authorized to cancel not more than two of such regular
meetings, excluding the organizational meeting, during each calendar year. This
should result in no less than ten (10) meetings each calender year held in ten
(10) different calendar months.
4.2 Special Meetings. Special meetings of the Board of Directors may be
----------------
called by or at the request of the President, Chairman of the Board, or by
any three directors in office at that time.
4.3 Place of Meetings. Directors may hold their meetings at any place within
-----------------
or outside the State of Georgia as the Board of Directors may from time to time
establish for regular meetings, or as set forth in the notice of special
meetings, or in the event of a meeting held pursuant to waiver of notice, as set
forth in the waiver.
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<PAGE>
4.4 Notice of Meetings. No notice shall be required for any regularly
------------------
scheduled meeting of the directors of the bank. Unless waived as contemplated in
Section 5.2, the President or Secretary of the bank, or any director thereof
shall give notice to each director of each special meeting stating the time,
place and purposes of the meeting. Such notice shall be given by mailing notice
of the meeting at least five (5) days before the date of the meeting, or by
telephone, telegram, fax, e-mail or personal delivery at least one (1) day
before the date of the meeting. Notice shall be deemed to have been given by
telegram, fax, e-mail or cablegram at the time notice is filed with the
transmitting instrumentality. Attendance by a director at a meeting shall
constitute a waiver of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting to the transacting of business
because the meeting is not lawfully called.
4.5 Quorum. At meetings of the Board of Directors, a majority of the directors
------
then in office shall be necessary to constitute a quorum for the transaction of
business.
4.6 Vote Required for Action. Except as otherwise provided in these bylaws, by
------------------------
the bank's Articles of Incorporation, or by law, the act of a majority of the
directors present at a meeting at which a quorum is present at the time shall be
the act of the Board of Directors.
4.7 Action by Directors Without a Meeting. Any action which may be taken at
-------------------------------------
any meeting of the Board of Directors, or at any meeting of a committee of
directors may be taken without a meeting if a written consent thereto shall be
signed by all directors, or all members of the committee. The written consent
must be filed with the minutes of the proceedings of the Board or the committee.
The written consent shall have the same force and effect as a unanimous vote of
the Board of Directors or the committee.
ARTICLE FIVE
NOTICE AND WAIVER
5.1 Procedure. Whenever these bylaws require notice to be given to any
---------
shareholder or director, the notice shall be given as prescribed in Sections 2.5
or 4.4, whichever is applicable. Whenever notice is given to a shareholder or
director by mail, the notice shall be sent by first class mail. The notice shall
be sent in a sealed envelope, postage paid, addressed to the shareholder or
director at their last known address, and shall be deemed to have be given at
the time it is deposited in the United States mail.
5.2 Waiver. Except as limited by the Financial Institutions Code of Georgia,
------
whenever any notice is required to be given to any shareholder or director by
law, by the Articles of Incorporation, or these bylaws, a waiver thereof in
writing, signed by the director or shareholder entitled to such notice, or by
the proxy of such shareholder, whether before or after the meeting to which the
waiver pertains, shall be deemed equivalent thereto; provided, however, that no
such waiver shall apply by its terms to more than one required notice.
-31-
<PAGE>
ARTICLE SIX
OFFICERS
6.1 Bank Officers. The officers of a bank shall consist of a President and a
-------------
Secretary. In addition, the Board of Directors may from time to time elect or
provide for the appointment of such other senior officers as it deems necessary
for the efficient management of the bank, or as shall otherwise be required by
law or regulation. Any two or more offices may be held by the same person,
except the offices of President and Secretary. The Board of Directors shall have
the power to establish and specify the duties for all officers of the bank.
6.2 Election and Term. All officers shall be either appointed or elected by
-----------------
the Board of Directors or its designee and shall serve at the will of the Board
of Directors and until their successors have been elected and have qualified, or
until their earlier death, resignation, removal, retirement or disqualification.
The bank shall immediately inform the Georgia Department of Banking and Finance
in writing of the election of any new chief executive officer.
6.3 Compensation. The compensation of all senior management officers of the
------------
bank shall be fixed by the Board of Directors, or by the Personnel Committee of
the Board of Directors, if such committee is designated as provided in Section
3.8. No officer shall be compensated from commissions derived from the sale of
credit related insurance (credit life, disability, accident and health
insurance, etc.) where premiums paid by a bank customer for such insurance are
financed by the bank as part of the credit extended or where purchase of the
insurance is a condition precedent to the granting of credit.
6.4 Removal. Any officer or agent elected or appointed by the Board of
-------
Directors may be removed by the Board of Directors with or without any cause
whenever, in its judgment, the best interests of the bank will be served thereby
without prejudice to any contract right to such officer. The bank shall
immediately inform the Georgia Department of Banking and Finance in writing of
the names of any officers removed and the reasons for such removal.
6.5 Chairman of the Board. The Board of Directors shall elect a Chairman of
---------------------
the Board of Directors who shall preside and act as chairman at all meetings of
the shareholders and the Board of Directors, and who shall perform such other
duties as the Board of Directors may from time to time direct.
6.6 President. The President shall have general control and supervision over
---------
the business and affairs of the bank. He shall see that all orders and
resolutions of the Board of Directors are carried into effect. In the absence of
the Chairman and Vice Chairman of the Board of Directors, the President shall
preside and act as chairman of all meetings of the shareholders and the Board of
Directors. He also shall perform such other duties as may be delegated to him
from time to time by the Board of Directors.
6.7 Officer in Place of President. The Board of Directors may designate an
-----------------------------
officer who shall, in the absence or disability of the President, or at the
direction of the President, perform the duties and exercise the powers of the
President
-32-
<PAGE>
6.8 Secretary. The Secretary shall keep accurate written records of the acts
---------
and proceedings of all meetings of shareholders, directors and committees of
directors. The Secretary shall have authority to give all notices required by
law' or these bylaws and shall be custodian of the corporate books, records,
contracts and other documents. The Secretary may affix the bank's seal to any
lawfully executed documents requiring it and shall sign such instruments as may
require signature.
6.9 Bonds. Any director who is authorized to handle money or negotiable assets
-----
on behalf of the bank, and all officers and employees of the bank, shall be
bonded by a regularly incorporated surety company authorized to do business in
the State of Georgia, and the bank may pay the cost of the bonds. The form,
amount and surety of the bonds shall be approved by the Board of Directors and
shall be subject to any additional requirements of the Georgia Department of
Banking and Finance.
6.10 Reimbursement by Officers. Any payments, not specifically approved by the
-------------------------
Board, made to an officer of the bank such as salary, commission, bonus,
interest or rent, or reimbursement of entertainment expenses incurred by such
officer, which shall be disallowed in whole or in part as a deductible expense
by the Internal Revenue Service, shall be reimbursed by such officer to the bank
to the full extent of such disallowance. It shall be the duty of the Board of
Directors to enforce payment of each such amount disallowed. In lieu of payment
by the officer, subject to the determination of the Board of Directors,
proportionate amounts may be withheld from such officer's future compensation
payments until the amount owed to the bank has been recovered.
ARTICLE SEVEN
DIVIDENDS
7.1 Time and Conditions of Declaration. Dividends on the outstanding shares of
----------------------------------
the bank may be declared by the Board of Directors at any regular or special
meeting and paid in cash or property only out of the retained earnings of the
bank. Dividends can be paid without the approval of the Department of Banking
and Finance when the bank meets the paid-in capital and/or appropriated net
earnings requirements of the Financial Institutions Code of Georgia, and only in
compliance with the regulations of the Georgia Department of Banking and Finance
regarding payment of dividends.
7.2 Share Dividends - Treasury Shares. Dividends may be declared by the Board
---------------------------------
of Directors and paid out of any lawfully held treasury shares.
7.3 Share Dividends - Unissued Shares. Dividends may be declared by the Board
---------------------------------
of Directors and paid in the authorized but unissued shares of the bank out of
any retained earnings of the bank. The shares shall be issued at not less than
par value. At the time such dividend is paid an amount equal to at least the
aggregate par value of the shares should be transferred to capital stock from
retained earnings. After payment of the dividend, the bank shall continue to
maintain the paid-in capital and/or appropriated retained earnings requirements
of the Financial Institutions Code of Georgia.
7.4 Share Splits. A split or division of the issued shares of any class into a
------------
greater number of shares of the same class without increasing the capital stock
of the bank, shall not be construed to be a share dividend within the meaning of
this Article.
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<PAGE>
ARTICLE EIGHT
SHARES
8.1 Authorization and Issuance of Shares. The par value and the maximum number
------------------------------------
of shares of any class of the bank which may be issued and outstanding shall be
set forth from time to time in the Articles of Incorporation of the bank. The
Board of Directors may increase or decrease the number of issued and outstanding
shares of the bank within the maximum number of shares authorized by the
Articles of Incorporation and the minimum capitalization requirements of the
Articles of Incorporation or Georgia law.
8.2 Share Certificates. The interest of each shareholder in the bank shall be
------------------
evidenced by a certificate or certificates representing shares of the bank which
shall be in such form as the Board of Directors may from time to time adopt in
accordance with Georgia law. Share certificates shall be consecutively numbered,
shall be in registered form, and shall indicate the date of issue and all such
information shall be entered on the bank's books. Each certificate shall be
signed by the President or Vice President and the Secretary or an Assistant
Secretary and shall be sealed with the seal of the bank or a facsimile thereof;
provided, however, that where such certificate is signed by a transfer agent, or
registered by a registrar, other than the bank itself, or any employee of the
bank, the signatures of such officers may be facsimiles. In case any officer or
officers who shall have signed or whose facsimile signature shall have been
placed upon a share certificate shall have ceased for any reason to be such
officer or officers of the bank before such certificate is issued, such
certificate may be issued by the bank with the same effect as if the person or
persons who signed such certificate or whose facsimile signature shall have been
used thereon had not ceased to be such officer or officers.
8.3 Rights of Bank with Respect to Registered Owners. Prior to due
------------------------------------------------
presentation for transfer of registration of its shares, the bank may treat the
registered owner of the shares as the person exclusively entitled to vote such
shares, to receive any dividend or other distribution with respect to such
shares, and for all other purposes; and the bank shall not be bound to recognize
any equitable or other claim to or interest in such shares on the part of any
other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by law.
8.4 Transfer of Shares. Transfers of shares shall be made upon the stock
------------------
transfer books of the bank only upon direction of the person named in the share
certificate representing the shares to be transferred, or by an attorney of such
person lawfully constituted in writing; and before a new certificate is issued,
the old certificate shall be surrendered for cancellation or, in the case of a
certificate alleged to have been lost, stolen, or destroyed, the provisions of
Section 8.6 of these bylaws shall have been satisfied.
8.5 Duty of Bank to Register Transfer. Notwithstanding any of the provisions
---------------------------------
of Section 8.4 of these bylaws the bank is under a duty to register the
transfers of its shares only if:
(a) the share certificate is endorsed by the appropriate person or
persons; and
(b) reasonable assurance is given that these endorsements are genuine and
effective: and
(c) the bank has no duty to inquire into adverse claims or has discharged
any such duty; and
(d) any applicable law relating to the collection of taxes has been
complied with; and
(e) the transfer is in fact rightful or is to a bonafide purchaser.
-34-
<PAGE>
8.6 Lost, Stolen, or Destroyed Certificates. Any person claiming a share
---------------------------------------
certificate to be lost, stolen, or destroyed shall make an affidavit or
affirmation of the fact in such manner as the Board of Directors may require and
shall, if the Board of Directors so requires, give the bank a bond of indemnity
in form and amount, and with one or more sureties satisfactory to the Board of
Directors, as the Board of Directors may require, whereupon an appropriate new
certificate may be issued in lieu of the one alleged to have been lost, stolen,
or destroyed.
8.7 Fixing of Record Date. For the purpose of determining shareholders
---------------------
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof; or entitled to receive payment of any dividend, or in order
to make a determination of shareholders for any other proper purpose, the Board
of Directors may fix in advance a date as the record date, such date to be not
more than 50 days (and in the case of a shareholders' meeting, not less than 10
days) prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken.
8.8 Record Date if None Fixed. If no record date is fixed as provided in
-------------------------
Section 8.7 of these bylaws, then the record date for any determination of
shareholders which may be proper or required by law shall be the date on which
notice is mailed in the case of a shareholders' meeting, or the date on which
the Board of Directors adopts a resolution declaring a dividend in the case of a
payment of a dividend.
ARTICLE NINE
INDEMNIFICATION
9.1 Indemnification. Any person, their heirs, executors, or administrators,
---------------
may be indemnified or reimbursed by the bank for reasonable expense actually
incurred in connection with any action, suit or proceeding, civil or criminal,
to which such person shall be made a party by reason of the fact that such
person is or was a director, trustee, officer, employee, or agent of the bank,
or that such person is or was serving, at the request of the bank, as a
director, trustee, officer, employee, or agent of another firm, corporation,
trust, or other organization or enterprise. No person shall be so indemnified or
reimbursed in relation to any matter in such action, suit, or proceeding as to
which such person shall finally be adjudged to have been guilty of or liable for
gross negligence, willful misconduct, or criminal acts in the performance of
their duties to the bank, or to such other firm, corporation, trust,
organization, or enterprise. Provided further, no person shall be so indemnified
or reimbursed in relation to any matter in such action, suit, or proceeding
which has been the subject of a compromise settlement, except with the approval
of (i) a court of competent jurisdiction, (ii) the holders of record of a
majority of the outstanding shares of capital stock of the bank, or (iii) a
majority of the members of the Board of Directors then holding office excluding
the votes of any directors who are parties to the same or substantially the same
action, suit, or proceeding.
9.2 Payment of Expenses in Advance. Expenses incurred in defending any action,
------------------------------
suit, or proceeding referred to above may be paid by the bank in advance of the
final disposition of such action, suit, or proceeding. It must be authorized by
the Board of Directors in the specific case upon receipt of an undertaking by or
on behalf of the director, trustee, officer, employee or agent to repay such
amount unless it shall ultimately be determined that he is entitled to be
indemnified by the bank as provided above.
-35-
<PAGE>
9.3 Insurance. The bank, upon the affirmative vote of a majority of its Board
---------
of Directors, may purchase and maintain insurance on behalf of any person who is
or was a director, trustee, officer, employee or agent of the bank, or is or was
serving, at the request of the bank, as a director, trustee, officer, employee
or agent of another firm, corporation, trust or other organization or enterprise
against liability asserted against him and incurred by him in any such capacity
or arising out of his status as such, whether or not the bank would have the
power to indemnify him against such liability under the foregoing provisions of
these bylaws.
9.4 Rights Not Exclusive. The foregoing rights of indemnification or
--------------------
reimbursement shall not be exclusive of other rights to which the persons
referred to above or their heirs, executors, or administrators, may be entitled
as a matter of law, and the bank may indemnify such persons to the extent
permitted by the Financial Institutions Code of Georgia and the Georgia Business
Corporation Code, as such laws may be amended from time to time.
ARTICLE TEN
EMERGENCY OPERATIONS
10.1 General. In the event of an emergency declared by the President of the
-------
United States or the person performing such functions, or an emergency declared
by the Governor of the State of Georgia or the person performing such functions,
the officers and employees of this bank shall continue to conduct the affairs of
the bank under such guidance from the directors as may be available except as
the matters which by statute or regulation require specific approval of the
Board of Directors, and subject to conformance with any governmental directives
during the emergency. In the absence of a plan of operation formulated by the
Board of Directors providing for conducting the business of the bank during the
time emergencies exist, the following provisions shall govern the operations of
the bank notwithstanding any other provisions of these bylaws to the contrary.
Provided, further, that all operations shall be consistent with all state and
federal laws governing emergency operations.
10.2 Meeting of Board of Directors. The Board of Directors shall meet as soon
-----------------------------
as practicable at the time and place within the State of Georgia, or, if no
place within the State of Georgia can be utilized promptly, without the State of
Georgia, as designated by the Chairman of the Board of Directors, the President,
the officer designated pursuant to Section 6.7, or any two directors. Any
director may waive notice of such meeting in writing before, at, or after such
meeting. If it shall be determined at such meeting that there are less than five
(5) directors then capable of serving, the directors present at such meeting
shall, by majority vote, appoint a sufficient number of persons to fill the
vacancies existing in the Board of Directors to bring the total number of
directors to not less than five (5). As soon as a majority of such Board of
Directors, consisting of not less than five (5) members, can be assembled at the
meeting required by this Section 10.2, or any adjournment thereof; which
adjournment can be effected at any time by a majority of the vote of those in
attendance, the Board of Directors as then constituted shall (i) appoint such
officers as may be required to transact the business of the bank to succeed the
then appointed or acting officers who have been incapacitated as a result of the
emergency, and (ii) designate and authorize temporary relocation and
establishment of the main banking office and any branch, branch bank or bank
office of the bank which may have become wholly or partially unusable as a
result of the emergency conditions at any other office, branch, branch bank or
bank office of the bank, or other location in the State of Georgia, and (iii) at
its discretion, authorize the entry of the bank into an agreement with any
Federal Reserve Bank, Federal Home Loan Bank, banking institution or branch (the
"other bank") whereby the bank shall act as agent for the other bank or the
other bank shall act as agent for the bank and perform temporarily any and all
operations and functions thereof.
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<PAGE>
10.3. Interim Administration. Until such time as the meeting of the Board of
----------------------
Directors required by Section 10.2 can be held and action taken by it, and in
the event either the President or the officer of the bank designated pursuant to
Section 6.7 cannot be located or is unable to continue normal executive duties,
all perfunctory matters ordinarily performed by the President may be performed
by any Vice President if such officer or officers have been designated, and if
not, by the Secretary of the bank.
10.4. Interim Office. Until such time as the meeting required by Section 10.2
--------------
can be held and action taken by the Board of Directors as then constituted and
in the event that because of damage or disaster the main office or any branch,
branch bank or bank office of the bank becomes wholly or partially unusable,
such main office, branch, branch bank or bank office shall be relocated at one
of the following locations, if available and usable, and in the following order:
(1) 2918 Riverside Drive, Macon, Georgia.
(2) 770 Walnut Street, Macon, Georgia.
(3) Any other branch or location designated by the Acting President.
The Acting President shall notify the State and Federal Regulatory Authorities
of any such relocation of its main office, branches, branch banks, or bank
offices as promptly as possible.
ARTICLE ELEVEN
MISCELLANEOUS
11.1 Inspection of Books and Records. The Board of Directors shall have power
-------------------------------
to determine which accounts, books and records of the bank shall be open to the
inspection of shareholders, except such accounts, books, and records that are
specifically open to inspection by law, and the Board of Directors shall have
power to fix reasonable rules and regulations not in conflict with the
applicable law for the inspection of accounts, books and records which by law or
by determination of the Board ofDirectors shall be open to inspection.
11.2 Fiscal Year. The fiscal year of the bank shall be the calendar year.
-----------
11.3 Seal. The corporate seal shall be in such form as the Board of Directors
----
may from time to time determine.
11.4 Annual Statements. The bank shall prepare such financial statements
-----------------
showing the results of its operations during its fiscal year as shall be
required by Regulations of the Department of Banking and Finance. Upon receipt
of written request, the bank promptly shall mail to any shareholder of record a
copy of the most recent such financial statement.
-37-
<PAGE>
EXHIBIT NO. 11
STATEMENT OF COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, 1999 June 30, 1999
-------------------------- --------------------------
Earnings Earnings
Shares Per Share Shares Per Share
-------- ----------- -------- -----------
(in Thousands) (in Thousands)
<S> <C> <C> <C> <C>
Basic Weighted Average
Shares Outstanding 3,341 $ 0.48 3,341 $ 0.24
======== ========= ======== =========
Diluted
Average Shares Outstanding 3,341 3,341
Common Stock Equivalents 32 32
-------- --------
3,373 $ 0.47 3,373 $ 0.23
======== ========= ======== =========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, 1999 June 30, 1999
-------------------------- --------------------------
Earnings Earnings
Shares Per Share Shares Per Share
-------- ----------- -------- -----------
(in Thousands) (in Thousands)
<S> <C> <C> <C> <C>
Basic Weighted Average
Shares Outstanding 3,124 $ 0.45 3,144 $ 0.23
======== ========= ======== =========
Diluted
Average Shares Outstanding 3,124 3,144
Common Stock Equivalents 219 209
-------- --------
3,343 $ 0.42 3,353 $ 0.21
======== ========= ======== =========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 18,328
<INT-BEARING-DEPOSITS> 29
<FED-FUNDS-SOLD> 2,651
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 33,424
<INVESTMENTS-CARRYING> 3,016
<INVESTMENTS-MARKET> 3,080
<LOANS> 191,239
<ALLOWANCE> 2,258
<TOTAL-ASSETS> 258,675
<DEPOSITS> 220,883
<SHORT-TERM> 4,915
<LIABILITIES-OTHER> 2,353
<LONG-TERM> 4,044
0
0
<COMMON> 3,341
<OTHER-SE> 23,139
<TOTAL-LIABILITIES-AND-EQUITY> 258,675
<INTEREST-LOAN> 8,727
<INTEREST-INVEST> 1,059
<INTEREST-OTHER> 59
<INTEREST-TOTAL> 9,845
<INTEREST-DEPOSIT> 3,823
<INTEREST-EXPENSE> 4,023
<INTEREST-INCOME-NET> 5,812
<LOAN-LOSSES> 338
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 4,592
<INCOME-PRETAX> 2,410
<INCOME-PRE-EXTRAORDINARY> 1,598
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,598
<EPS-BASIC> 0.48
<EPS-DILUTED> 0.47
<YIELD-ACTUAL> 5.05
<LOANS-NON> 777
<LOANS-PAST> 663
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,070
<CHARGE-OFFS> 220
<RECOVERIES> 70
<ALLOWANCE-CLOSE> 2,258
<ALLOWANCE-DOMESTIC> 2,258
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 10,207
<INT-BEARING-DEPOSITS> 41
<FED-FUNDS-SOLD> 13,885
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 31,297
<INVESTMENTS-CARRYING> 4,762
<INVESTMENTS-MARKET> 4,885
<LOANS> 159,229
<ALLOWANCE> 2,007
<TOTAL-ASSETS> 227,474
<DEPOSITS> 195,488
<SHORT-TERM> 310
<LIABILITIES-OTHER> 1,830
<LONG-TERM> 5,382
0
0
<COMMON> 3,144
<OTHER-SE> 21,321
<TOTAL-LIABILITIES-AND-EQUITY> 227,474
<INTEREST-LOAN> 7,695
<INTEREST-INVEST> 1,041
<INTEREST-OTHER> 290
<INTEREST-TOTAL> 9,026
<INTEREST-DEPOSIT> 3,707
<INTEREST-EXPENSE> 3,798
<INTEREST-INCOME-NET> 5,228
<LOAN-LOSSES> 268
<SECURITIES-GAINS> 4
<EXPENSE-OTHER> 4,053
<INCOME-PRETAX> 2,108
<INCOME-PRE-EXTRAORDINARY> 1,406
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,406
<EPS-BASIC> 0.45
<EPS-DILUTED> 0.42
<YIELD-ACTUAL> 5.00
<LOANS-NON> 772
<LOANS-PAST> 272
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,861
<CHARGE-OFFS> 165
<RECOVERIES> 43
<ALLOWANCE-CLOSE> 2,007
<ALLOWANCE-DOMESTIC> 2,007
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
