SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
(X)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 2000
--------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________________to__________________
Commission File No. 0-25766
Community Bank Shares of Indiana, Inc.
(Exact name of registrant as specified in its charter)
Indiana 35-1938254
------- ----------
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification Number)
101 W. Spring Street, New Albany, Indiana 47150
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 1-812-944-2224
--------------
Not applicable
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report
APPLICABLE ONLY TO CORPORATE ISSUERS; Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practicable date: 2,617,807 shares of common stock were outstanding as of April
30, 2000.
<PAGE>
COMMUNITY BANK SHARES OF INDIANA, INC.
INDEX
<TABLE>
<CAPTION>
Part I Financial Information Page
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of March 31, 2000 (unaudited)
<S> <C>
and December 31, 1999 3
Consolidated Statements of Income for the three months
ended March 31, 2000 and 1999 (unaudited) 4
Consolidated Statements of Cash Flows for the three months
ended March 31, 2000 and 1999 (unaudited) 5
Notes to consolidated financial statements (unaudited) 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-13
Part II Other Information 14
Signatures 16
</TABLE>
- 2 -
<PAGE>
PART I - FINANCIAL INFORMATION
COMMUNITY BANK SHARES OF INDIANA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
(Unaudited) *
ASSETS (In thousands)
<S> <C> <C>
Cash and due from banks $ 8,397 $ 7,248
Interest bearing deposits with banks 3,578 5,767
Securities available for sale, at fair value 6,430 6,428
Securities-held to maturity:
Mortgage-backed securities 25,037 26,388
Other debt securities 71,494 71,521
Loans receivable, net 260,747 246,018
Federal Home Loan Bank stock, at cost 7,513 7,362
Foreclosed real estate - 13
Premises and equipment 9,626 9,754
Accrued interest receivable 2,790 2,795
Other assets 491 1,149
-------------------------------------------
Total Assets $ 396,103 $ 384,443
===========================================
LIABILITIES
Deposits $ 231,398 $ 226,473
Borrowed funds 120,543 114,432
Accrued interest payable 116 91
Accrued expenses and other liabilities 2,273 1,817
-------------------------------------------
Total Liabilities 354,330 342,813
-------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock without par value
Authorized 5,000,000 shares; none issued - -
Common stock of $.10 par value per share
Authorized 10,000,000 shares; issued 2,728,298 shares 273 273
Additional paid-in capital 19,477 19,472
Retained earnings-substantially restricted 24,240 23,859
Unearned ESOP and stock compensation (313) (339)
Accumulated other comprehensive income-net
unrealized gain on securities available for sale (185) (232)
Less treasury stock, at cost - 102,891 shares (80,391
shares at December 31, 1999) (1,719) (1,403)
-------------------------------------------
Total Stockholders' Equity 41,773 41,630
-------------------------------------------
Total Liabilities and Stockholders' Equity $ 396,103 $ 384,443
===========================================
</TABLE>
* Derived from audited financial statements See accompanying notes to
consolidated financial statements.
- 3 -
<PAGE>
PART I - FINANCIAL INFORMATION
COMMUNITY BANK SHARES OF INDIANA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
---- ----
INTEREST INCOME (In thousands, except per share data)
<S> <C> <C>
Loans receivable, including fees $ 5,272 $ 4,314
Securities:
Mortgage-backed securities 484 431
Other debt securities 1,187 1,053
Federal Home Loan Bank dividends 145 65
Interest bearing deposits with banks 55 141
-------------------------------------------------
Total interest income 7,143 6,004
INTEREST EXPENSE
Deposits 2,372 2,223
Borrowed funds 1,658 965
-------------------------------------------------
Total interest expense 4,030 3,188
Net interest income 3,113 2,816
Provision for loan losses 181 136
-------------------------------------------------
Net interest income after provision for
loan losses 2,932 2,680
NON-INTEREST INCOME
Service charges on deposit accounts 126 116
Commission income 160 126
Gain on sale of loans 34 110
Gain on sale of premises and equipment 86 -
Other income 16 19
-------------------------------------------------
Total non-interest income 422 371
-------------------------------------------------
NON-INTEREST EXPENSE
Compensation and benefits 1,225 1,030
Occupancy and equipment 305 143
Deposit insurance premiums 11 27
Data processing service 182 140
Other operating expenses 420 318
-------------------------------------------------
Total non-interest expense 2,143 1,658
-------------------------------------------------
Income before income taxes 1,211 1,393
Income tax expense 483 531
-------------------------------------------------
Net Income 728 862
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Unrealized gain (loss) on securities:
Unrealized holding gains (losses) arising during the
period 47 (1)
Less: reclassification adjustment - -
-------------------------------------------------
Other comprehensive income (loss) 47 (1)
-------------------------------------------------
Comprehensive Income $ 775 $ 861
=================================================
Net income per common share, basic $ 0.28 $ 0.32
=================================================
Net income per common share, diluted $ 0.28 $ 0.32
=================================================
</TABLE>
See accompanying notes to consolidated financial statements.
- 4 -
<PAGE>
PART I - FINANCIAL INFORMATION
COMMUNITY BANK SHARES OF INDIANA, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
2000 1999
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES (In thousands)
<S> <C> <C>
Net income $ 728 $ 862
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of premiums and accretion of discounts 1 (54)
Provision for loan losses 181 136
Proceeds from sales of mortgage loans 3,337 8,759
Mortgage loans originated for sale (3,303) (4,379)
Net gain on sale of mortgage loans (34) (110)
Net gain on sale of foreclosed real estate (3) -
Depreciation expense 159 54
Gain on sale of premises and equipment (86) -
ESOP and stock compensation plan expense 32 25
Federal Home Loan Bank stock dividends (11) (8)
(Increase) decrease in accrued interest receivable 5 (313)
Increase in accrued interest payable 25 49
Net change in other assets/liabilities 1,112 886
----------------------------
Net Cash Provided By Operating Activities 2,143 5,907
----------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease in interest bearing deposits with banks 2,189 2,820
Proceeds from maturities of securities held to maturity 25 11,529
Purchase of securities held to maturity - (24,427)
Principal collected on securities available for sale 75 41
Principal collected on securities held to maturity 1,352 4,254
Loan originations and principal payments on loans, net (14,610) (10,732)
Purchase of Federal Home Loan Bank stock (140) (58)
Proceeds from sale of foreclosed real estate 16 -
Proceeds from sale of premises and equipment 50 -
Acquisition of premises and equipment (295) (367)
----------------------------
Net Cash Provided (Used) By Investing Activities (11,338) (16,940)
----------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits 4,925 (4,445)
Net increase (decrease) in retail repurchase agreements (1,889) 4,472
Repayment of advances from Federal Home Loan Bank (16,500) -
Advances from Federal Home Loan Bank 24,500 2,000
Purchase of treasury stock (316) -
Dividends paid (376) (327)
----------------------------
Net Cash Provided (Used) By Financing Activities 10,344 1,700
----------------------------
Net Increase (Decrease) in Cash and Due From Banks 1,149 (9,333)
Cash and due from banks at beginning of period 7,248 14,051
----------------------------
Cash and Due From Banks at End of Period $ 8,397 $ 4,718
============================
</TABLE>
See accompanying notes to consolidated financial statements.
- 5 -
<PAGE>
COMMUNITY BANK SHARES OF INDIANA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Presentation of Interim Information
Community Bank Shares of Indiana, Inc. (the Company) was formally
established on April 7, 1995. Community Bank Shares of Indiana, Inc.
(the Company) is a multi-bank holding company headquartered in New
Albany, Indiana. The Company's wholly-owned banking subsidiaries are
Community Bank of Southern Indiana (Community), Heritage Bank of
Southern Indiana (Heritage), and NCF Bank and Trust Company (NCF Bank).
Community, Heritage, and NCF Bank are state-chartered stock commercial
banks headquartered in New Albany, Indiana, Jeffersonville, Indiana,
and Bardstown, Kentucky, respectively.
In the opinion of management, the unaudited consolidated financial
statements include all normal adjustments considered necessary to
present fairly the financial position as of March 31, 2000, and the
results of operations for the three months ended March 31, 2000 and
1999 and cash flows for the three months ended March 31, 2000 and 1999.
All of these adjustments are of a normal, recurring nature. Interim
results are not necessarily indicative of results for a full year.
The consolidated financial statements and notes are presented as
permitted by Form 10-Q, and do not contain certain information included
in the Company's annual audited consolidated financial statements.
The consolidated financial statements include the accounts of the
Company and the Bank. All material intercompany balances and
transactions have been eliminated in consolidation.
2. Supplemental Disclosures of Cash Flow Information
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
---- ----
(In Thousands)
Cash payments for:
<S> <C> <C>
Interest $ 4,006 $ 3,139
Taxes 93 91
Noncash investing activities:
Proceeds from sales of foreclosed real estate
financed through loans - 200
Proceeds from sales of premises and equipment
financed through loans 300 -
</TABLE>
- 6 -
<PAGE>
COMMUNITY BANK SHARES OF INDIANA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
3. Comprehensive Income
In 1998, the Company adopted FASB Statement No. 130, "Reporting
Comprehensive Income." This Statement established standards for
reporting and displaying comprehensive income and its components.
Comprehensive income is defined as "the change in equity (net assets)
of a business enterprise during a period from transactions and other
events and circumstances from non-owner sources. It includes all
changes in equity during a period except those resulting from
investments by owners and distributions to owners." Comprehensive
income for the Company includes net income and unrealized gains and
losses on securities available for sale. The following tables set forth
the components of other comprehensive income and the allocated income
tax amounts for the three months ended March 31, 2000 and 1999:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
---- ----
(In thousands)
Unrealized gains on securities:
Unrealized holding gains
(losses)
<S> <C> <C>
arising during the period $ 77 $ (1)
Income tax expense (benefit) 30 (-)
-----------------------------------
Net of tax amount 47 (1)
-----------------------------------
Less: reclassification
adjustment for (gains)
losses included in net
income - -
Income tax expense (benefit) - -
-----------------------------------
- -
-----------------------------------
Other comprehensive
income (loss) $ 47 $ (1)
==========================
</TABLE>
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<PAGE>
COMMUNITY BANK SHARES OF INDIANA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
4. Supplemental Disclosure for Earnings Per Share
<TABLE>
<CAPTION>
Three months ended
March 31,
------------------------------------
2000 1999
---- ----
(Dollars in thousands,
except per share data)
Basic:
Earnings:
<S> <C> <C>
Net income $ 728 $ 862
====================================
Shares:
Weighted average common
shares outstanding 2,604,905 2,696,788
====================================
Net income per common share, basic $ 0.28 $ 0.32
====================================
Diluted:
Earnings: $ 728 $ 862
====================================
Shares:
Weighted average common
shares outstanding 2,604,905 2,696,788
Add: Dilutive effects of outstanding options 3,562 3,963
------------------------------------
Weighted average common
shares outstanding, as adjusted 2,608,467 2,700,751
====================================
Net income per common share, diluted $ 0.28 $ 0.32
====================================
</TABLE>
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<PAGE>
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
COMMUNITY BANK SHARES OF INDIANA, INC. AND SUBSIDIARY
Safe Harbor Statement for Forward Looking Statements
This report may contain forward-looking statements within the meaning of the
federal securities laws. These statements are not historical facts, rather
statements based on the Company's current expectations regarding its business
strategies and their intended results and its future performance.
Forward-looking statements are preceded by terms such as "expects," "believes,"
"anticipates," "intends" and similar expressions.
Forward-looking statements are not guarantees of future performance. Numerous
risks and uncertainties could cause or contribute to the Company's actual
results, performance and achievements to be materially different from those
expressed or implied by the forward-looking statements. Factors that may cause
or contribute to these differences include, without limitation, general economic
conditions, including changes in market interest rates and changes in monetary
and fiscal policies of the federal government; legislative and regulatory
changes; and other factors disclosed periodically in the Company's filings with
the Securities and Exchange Commission.
Because of the risks and uncertainties inherent in forward-looking statements,
readers are cautioned not to place undue reliance on them, whether included in
this report or made elsewhere from time to time by the Company or on its behalf.
The Company assumes no obligation to update any forward-looking statements.
Financial Condition
Total assets increased 3.0% from $384.4 million at December 31, 2000 to
$396.1 million at March 31, 2000, primarily as a result of increases in cash and
due from banks and loans receivable, net, which was funded primarily by growth
in deposits and an increase in advances from the Federal Home Loan Banks (FHLB)
of Indianapolis and Cincinnati.
Loans receivable, net, were $246.0 million at December 31, 1999,
compared to $260.7 million at March 31, 2000, a 6.0% increase. This increase is
primarily the result of increases in residential mortgage loans of $2.9 million
and commercial mortgage and business loans of $2.2 million and consumer loans of
$1.7 million.
Mortgage-backed securities available for sale were substantially
unchanged during the period. Mortgage-backed securities held-to-maturity
decreased from $26.4 million at December 31, 1999 to $25.0 million at March 31,
2000, as a result of principal repayments.
Other debt securities held to maturity were substantially unchanged at
$71.5 million at December 31, 1999 and March 31, 2000.
Federal Home Loan Bank stock, at cost, increased by $151,000 as the
Company was required to purchase stock to support advances obtained from the
Federal Home Loan Bank of Indianapolis.
- 9 -
<PAGE>
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
COMMUNITY BANK SHARES OF INDIANA, INC. AND SUBSIDIARY
Cash and interest bearing deposits with banks decreased from $13.0
million at December 31, 1999 to $12.0 million at March 31, 2000 as a result of
other, less liquid assets growing more quickly than the Company's funding
sources, resulting in decreased liquidity over the period.
Total deposits increased from $226.5 million at December 31, 1999 to
$231.4 million at March 31, 2000. The increase in deposits resulted from growth
in both 1) demand and savings deposit accounts, which management attributes
primarily to its promotional efforts to attract lower cost accounts, and 2) time
deposits, which management attributes primarily to more aggressive pricing
within its market areas.
Total stockholders' equity increased to $41.8 million at March 31, 2000
from $41.6 million at December 31, 1999 primarily as a result of net income of
$728,000 and unrealized gains on available for sale securities, net of tax, of
$47,000, offset by dividends to shareholders of $353,000 and treasury stock
repurchases of $316,000.
Results of Operations
Net Income. Net income was $728,000 ($.28 per share diluted) for the
three months ended March 31, 2000 compared to $862,000 ($.32 per share diluted)
for the three months ended March 31, 1999. Net income decreased from 1999 to
2000 primarily because of increased non-interest expenses.
Net interest income for the three month periods ended March 31, 2000
and 1999. Net interest income increased 10.7% from $2.8 million in 1999 to $3.1
million in 2000 primarily as a result of the increase in interest-earning assets
funded by increases in deposits and FHLB advances.
Total interest income increased $1.1 million, or 18.3%, to $7.1 million
for the three months ended March 31, 2000 compared to $6.0 million in the prior
year as a result of 1) an increase in interest-earning assets and 2) an increase
in the overall yield on interest-earning assets attributable to a general rise
in market interest rates. The average yield on interest-earning assets increased
from 7.49% in 1999 to 7.71% in 2000 due to the rise in market interest rates.
Interest on loans receivable increased $958,000 and interest on other debt
securities increased $134,000 as a result of an increase in the average balances
associated with these assets.
Total interest expense increased $842,000, or 26.4%, to $4.0 million
for the three months ended March 31, 2000 compared to $3.2 million for the three
months ended March 31, 1999 as a result of the growth in deposits and an
increase in average borrowings from the Federal Home Loan Bank of Indianapolis.
The average cost of funds increased from 4.51% in 1999 to 4.79% in 2000 due to
higher market interest rates.
- 10 -
<PAGE>
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
COMMUNITY BANK SHARES OF INDIANA, INC. AND SUBSIDIARY
Provision for loan losses. The provision for loan losses was $181,000
for the three months ending March 31, 2000 compared to $136,000 for the same
three month period in 1999. The provision for loan losses is charged to
operations to bring the total allowance for loan losses to a level considered by
management to be adequate to provide for estimated losses based on management's
evaluation of the collectibility of the loan portfolio, including the nature of
the portfolio, credit concentrations, trends in historical loss experience,
specified impaired loans, and economic conditions. The Company made provisions
of $181,000 for the three months ended March 31, 2000 to increase the allowance
for loan losses to an amount considered reasonable by management based on an
evaluation as of March 31, 2000. The allowance was increased due to increases in
commercial real estate and commercial business loans, which possess a higher
inherent risk of loss than one-to-four family residential mortgage loans.
Although management uses the best information available, future adjustments to
the allowance may be necessary due to changes in economic, operating, regulatory
and other conditions that may be beyond the Company's control. While the Company
maintains its allowance for loan losses at a level which it considers adequate
to provide for estimated losses, there can be no assurance that further
additions will not be made to the allowance for loan losses and that actual
losses will not exceed the estimated amounts. At March 31, 2000, non-performing
loans amounted to $298,410.
Non-interest income. Non-interest income increased 13.7% to $422,000
for the three months ended March 31, 2000 compared to $371,000 for the three
months ended March 31, 1999. The increase is attributable primarily to 1) the
gain on sale of the Company's former corporate headquarters, 2) an increase in
commission income on the sale of investment products such as mutual funds,
stocks, bonds, and annuities, and 3) an increase in service charges on deposit
accounts resulting from the increase in deposit accounts. These increases were
offset by a decrease in the gain on sale of mortgage loans as increased market
interest rates decreased mortgage loan originations.
Non-interest expense. Non-interest expense increased by $485,000 for
the three months ended March 31, 2000 as compared to the same period in 1999.
The increase results primarily from increases in compensation and benefits,
occupancy and equipment expenses, and other operating expenses. Compensation and
benefits expense increased $195,000 due to additional staff for the commercial
loan origination and loan operations areas as the Company continued to focus on
its balance sheet restructuring strategy emphasizing the origination of
high-quality commercial real estate and business loans. Occupancy and equipment
costs increased $162,000 in the first quarter 2000 compared to first quarter
1999 as a result of increased expenses related to the occupation of a new
corporate headquarters building in June 1999. Other operating expenses increased
$102,000 in the current period primarily related to a large one-time charitable
contribution made to a local non-profit organization.
Income tax expense. Income tax expense for the three month period ended
March 31, 2000 was $483,000, compared to $531,000 for the same period in 1999.
The effective tax rate for 2000 is 39.9% compared to 38.1% for 1999.
- 11 -
<PAGE>
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
COMMUNITY BANK SHARES OF INDIANA, INC. AND SUBSIDIARY
Liquidity and Capital Resources
The Company's primary sources of funds are customer deposits, customer
repurchase agreements, proceeds from loan repayments, maturing securities and
FHLB advances. While loan repayments and maturities are a predictable source of
funds, deposit flows and mortgage prepayments are greatly influenced by market
interest rates, general economic conditions and competition. At March 31, 2000,
the Company had cash and interest-bearing deposits with banks of $12.0 million
and securities available-for-sale with a fair value of $6.4 million. If the
Company requires funds beyond its ability to generate them internally, it has
additional borrowing capacity with the FHLB's of Indianapolis and Cincinnati as
well as collateral eligible for repurchase agreements.
The Company's primary investing activity is the origination of
commercial real estate and business loans. The Company also invests in
residential mortgage and consumer loans, U.S. Government and agency securities
and mortgage-backed securities issued by U.S. Government agencies.
The Company must maintain an adequate level of liquidity to ensure the
availability of sufficient funds to support loan growth and deposit withdrawals,
to satisfy financial commitments and to take advantage of investment
opportunities. Historically, the Company has been able to retain a significant
amount of its deposits as they mature.
The subsidiary banks are required to maintain specific amounts of
capital pursuant to regulatory requirements. As of March 31, 2000, the
subsidiary banks were in compliance with all regulatory capital requirements
which were effective as of such date with tangible, core and risk-based capital
ratios as follows:
<TABLE>
<CAPTION>
Total Capital To Tier 1 Capital To Tier 1 Capital
Risk-weighted Assets Risk-weighted Assets To Average Assets
---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C>
Community Bank 16.0% 15.4% 9.8%
Heritage Bank 14.0% 13.1% 8.9%
NCF Bank 22.4% 21.4% 13.9%
</TABLE>
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<PAGE>
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
COMMUNITY BANK SHARES OF INDIANA, INC. AND SUBSIDIARY
Year 2000 Issues
The year 2000 issue arose because many computer systems and
applications used two-digit date fields to designate a year. Date-sensitive
systems may recognize the year 2000 as 1900 or not at all. This inability to
recognize or properly treat the year 2000 may cause erroneous results, ranging
from system malfunctions to incorrect or incomplete processing. As a user of
computers, computer software and equipment utilizing embedded microprocessors,
failure to resolve year 2000 issues could cause substantial disruption of the
Company's business and could have a material adverse effect on the Company's
business, financial condition, or results of operations.
The Company established a year 2000 committee in 1997. The committee
developed and implemented a comprehensive plan to make all information and
non-information technology assets year 2000 compliant.
While there can be no assurances that the Company's year 2000 plan has
effectively addressed the year 2000 issue, the Company has not been notified,
and is unaware of, any vendor or service provider problems related to year 2000
and all systems have performed properly since January 1, 2000. Likewise, the
Company is unaware of any year 2000 issues that have impaired the ability of the
Company's borrowers to repay their debt.
- 13 -
<PAGE>
PART I - ITEM 3
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
Interest rate risk management focuses on maintaining consistent growth in
net interest income within Board-approved policy limits. The Company uses an
earnings simulation model to analyze net interest income sensitivity to
movements in interest rates. Given an immediate, sustained 200 basis point
upward shock to the yield curve used in the simulation model, it is estimated
net interest income for the Company would decrease by 18.43 percent over one
year. A 200 basis point immediate, sustained downward shock in the yield curve
would increase net interest income by an estimated 19.00 percent over one year.
These estimated changes in net interest income are within the policy guidelines
established by the Company's board of directors.
- 14 -
<PAGE>
PART II
OTHER INFORMATION
COMMUNITY BANK SHARES OF INDIANA, INC.
Item 1. Legal Proceedings
The Company is not a party to any legal proceedings.
Periodically, there have been various claims and lawsuits
involving the Bank, mainly as a plaintiff, such as claims to
enforce liens, condemnation proceedings on properties in which
the Bank holds security interests, claims involving the making
and servicing of real property loans and other issues incident to
the Bank's business. The Bank is not a party to any pending legal
proceedings that it believes would have a material adverse affect
on its financial condition or operations.
Item 2. Changes in Securities and Use of Proceeds
Not applicable.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on March 30, 2000
announcing that the Company's Board of Directors authorized the
repurchase of up to $4,000,000 of the Company's outstanding
common stock.
- 15 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.
COMMUNITY BANK SHARES OF INDIANA, INC.
(Registrant)
Dated May 15, 2000 BY: /s/ Michael L. Douglas
---------------------------- -------------------------
Michael L. Douglas
President, CEO, and Director
Dated May 15, 2000 BY: /s/ Paul A. Chrisco
---------------------------- ----------------------
Paul A. Chrisco
Vice President and
Chief Accounting Officer
- 16 -
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000933590
<NAME> COMMUNITY BANK SHARES OF INDIANA, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 8,397
<INT-BEARING-DEPOSITS> 3,578
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 6,430
<INVESTMENTS-CARRYING> 96,531
<INVESTMENTS-MARKET> 89,644
<LOANS> 258,845
<ALLOWANCE> 1,902
<TOTAL-ASSETS> 396,103
<DEPOSITS> 231,398
<SHORT-TERM> 33,543
<LIABILITIES-OTHER> 2,389
<LONG-TERM> 87,000
0
0
<COMMON> 273
<OTHER-SE> 41,500
<TOTAL-LIABILITIES-AND-EQUITY> 396,103
<INTEREST-LOAN> 5,272
<INTEREST-INVEST> 1,671
<INTEREST-OTHER> 200
<INTEREST-TOTAL> 7,143
<INTEREST-DEPOSIT> 2,372
<INTEREST-EXPENSE> 4,030
<INTEREST-INCOME-NET> 3,113
<LOAN-LOSSES> 181
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,143
<INCOME-PRETAX> 1,211
<INCOME-PRE-EXTRAORDINARY> 1,211
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 728
<EPS-BASIC> 0.28
<EPS-DILUTED> 0.28
<YIELD-ACTUAL> 7.71
<LOANS-NON> 149
<LOANS-PAST> 279
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,741
<CHARGE-OFFS> 20
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 1,902
<ALLOWANCE-DOMESTIC> 1,902
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
