<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended SEPTEMBER 30, 1996
COMMISSION FILE NUMBER 33 ACT FILE NO.-33-90524
------------------------
VALRICO BANCORP, INC.
---------------------
(Exact name of registrant as specified in its Charter)
FLORIDA 65-0553757
------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1815 EAST STATE ROAD 60, VALRICO, FLORIDA 33594
----------------------------------------------------
(Address of principal executive offices and zip code)
(813) 689-1231
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 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.
(1) Yes X (2) No
---- ----
As of September 30, 1996, there were 296,845 shares of common stock
outstanding.
<PAGE> 2
VALRICO BANCORP, INC.
INDEX
PART I. FINANCIAL INFORMATION PAGE NUMBER
Item 1. Financial Statements (Unaudited):
Consolidated balance sheets- September 30, 1996
and December 31, 1995 3
Consolidated statements of income- Three
months ended September 30, 1996 and 1995; Nine
months ended September 30, 1996 and 1995 4
Consolidated statements of shareholders'
equity- Nine months ended September 30, 1996 and
1995 5
Consolidated statements of cash flows- Nine
months ended September 30, 1996 and 1995 6
Notes to consolidated financial statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-11
PART II. OTHER INFORMATION 12
SIGNATURES 13
<PAGE> 3
VALRICO BANCORP, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
September 30 December 31
1996 1995
------------ -----------
ASSETS:
<S> <C> <C>
Cash and due from banks $ 3,524,060 $ 2,327,055
Federal funds sold 0 3,323,000
Securities available for sale 7,168,067 5,106,911
Securities to be held to maturity 3,497,790 2,918,379
Loans, net of allowance for loan losses 36,394,078 33,191,038
Facilities 1,028,836 1,149,928
Other real estate 157,384 178,272
Accrued interest receivable 376,248 375,488
Other assets 1,112,992 1,022,063
----------- -----------
Total assets $53,259,455 $49,592,134
=========== ===========
LIABILITIES:
Deposits:
Demand deposits $ 8,425,422 $ 6,557,640
NOW deposits 8,348,075 7,860,346
Money market deposits 3,648,025 3,938,092
Savings deposits 5,954,224 5,935,241
Time deposits (under $100,000) 16,663,205 16,544,783
Time deposits ($100,000 and over) 4,898,494 3,937,520
----------- -----------
Total deposits 47,937,445 44,773,622
Federal funds purchased 645,000 0
Securities sold under agreements to repurchase 325,200 389,641
Accounts payable and accrued liabilities 585,572 833,395
----------- -----------
Total liabilities 49,493,217 45,996,658
----------- -----------
STOCKHOLDERS' EQUITY:
Common stock, No par value, authorized
1,000,000 shares, issued and outstanding
296,845 shares for 1996; 299,279 for 1995 296,845 299,279
Capital surplus 2,336,656 2,323,160
Retained earnings 1,202,933 1,008,662
Net unrealized holding losses on securities (70,196) (35,625)
----------- -----------
Total stockholders' equity 3,766,238 3,595,476
----------- -----------
Total liabilities and stockholders' equity $53,259,455 $49,592,134
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
Page - 3
<PAGE> 4
VALRICO BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
September 30 September 30
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 868,032 $776,749 $2,532,848 $2,288,928
Interest on investment securities 164,989 130,085 432,765 413,604
Income on Federal funds sold 33,266 39,282 156,924 77,846
---------- -------- ---------- ----------
Total interest income 1,066,287 946,116 3,122,537 2,780,378
---------- -------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 380,322 356,025 1,129,954 1,020,466
Interest on Federal funds purchased and
securities sold under agreements to repurchase 5,057 1,637 12,248 8,243
---------- -------- ---------- ----------
Total interest expense 385,379 357,662 1,142,202 1,028,709
---------- -------- ---------- ----------
Net interest income 680,908 588,454 1,980,335 1,751,669
PROVISION FOR LOAN LOSSES: 58,169 10,000 113,169 70,000
---------- -------- ---------- ----------
Net interest income after provision
for loan losses 622,739 578,454 1,867,166 1,681,669
---------- -------- ---------- ----------
OTHER INCOME:
Service charges on deposit accounts 90,694 69,164 253,906 228,946
Miscellaneous income 19,449 18,618 61,550 62,320
---------- -------- ---------- ----------
Total other income 110,143 87,782 315,456 291,266
---------- -------- ---------- ----------
OTHER EXPENSE:
Salaries and employee benefits 287,550 243,768 868,221 675,143
Occupancy expense 101,194 94,901 290,435 267,727
Equipment expense 64,030 103,362 200,594 186,096
Stationery, printing, and supplies 23,513 15,981 65,956 43,468
Miscellaneous expenses 123,325 68,448 379,429 392,277
---------- -------- ---------- ----------
Total other expenses 599,612 526,460 1,804,635 1,564,711
---------- -------- ---------- ----------
INCOME BEFORE PROVISION FOR FEDERAL INCOME TAX 133,270 139,776 377,987 408,224
INCOME TAXES 49,475 46,300 143,396 143,000
---------- -------- ---------- ----------
NET INCOME $ 83,795 $ 93,476 $ 234,591 $ 265,224
---------- -------- ---------- ----------
Per Share Information:
Average shares outstanding 296,845 301,279 296,845 301,279
---------- -------- ---------- ----------
Net income per share $ 0.282 $ 0.310 $ 0.790 $ 0.880
---------- -------- ---------- ----------
</TABLE>
See Accompanying Notes to Cosolidated Financial Statements
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<PAGE> 5
VALRICO BANCORP, INC.
CONSOLIDATED STATEMENTS OF STOCKOLDERS' EQUITY (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
<TABLE>
<CAPTION>
Net unrealized Total
Common Capital Retained holding Losses stockholders'
stock surplus earnings on securities equity
------ ------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $299,279 $2,323,160 $1,008,662 ($35,625) $3,595,476
Net income 234,591 234,591
Net change in net unrealized
holding losses on securities (34,571) (34,571)
Transfer 32,273 (32,273) 0
Stock redeemption (2,434) (18,777) (8,047) (29,258)
-------- ---------- ---------- ------- ----------
Balance at September 30, 1996 $296,845 $2,336,656 $1,202,933 ($70,196) $3,766,238
======== ========== ========== ======= ==========
Balance at December 31, 1994 $302,779 $2,301,511 $ 727,321 ($93,223) $3,238,388
Net income 265,224 265,224
Cash dividends 0 0
Net change in net unrealized
holding losses on securities 64,127 64,127
Stock redemption (1,500) (15,525) 0 0 (17,025)
-------- ---------- ---------- ------- ----------
Balance at September 30, 1995 $301,279 $2,285,986 $ 992,545 ($29,096) $3,550,714
======== ========== ========== ======= ==========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
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<PAGE> 6
VALRICO BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
September 30
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 234,591 $ 265,224
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 113,169 70,000
Depreciation and amortization 152,384 138,424
Net amortization (accretion) of investments
security premiums and discounts (34,228) 19,412
(Increase) decrease in assets:
Accrued interest receivable (760) (32,498)
(Increase) decrease deferred income tax (14,668) 33,035
Other assets (90,929) 53,231
(Increase) decrease in liabilities:
Accounts payable and accrued liabilities (247,823) 193,809
----------- -----------
Net cash provided by operating activities 111,736 740,637
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Securities available for sale:
Purchase of securites (3,322,279) 0
Proceeds from maturities of securites 1,286,881 703,946
Securities to be held to maturity:
Purchase of securites (1,005,945) (100,000)
Proceeds from maturities of securites 400,774 586,870
(Increase) decrease in Federal funds sold 3,323,000 (2,229,000)
(Increase) decrease in loans (3,316,209) (2,574,038)
Purchase of facilities (16,965) (235,785)
ORE 20,888 (178,272)
----------- -----------
Net cash used in investing activities (2,629,855) (4,026,279)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deposits 3,163,823 4,159,676
Increase in Federal funds purchased 645,000 0
Increase in securities sold under
agreements to repurchase (64,441) (76,710)
Redemption of common stock (29,258) 0
Dividends 0 (110,000)
----------- -----------
Net cash provided by financing activities 3,715,124 3,972,966
----------- -----------
NET INCREASE IN CASH 1,197,005 687,324
CASH, BEGINNING OF YEAR 2,327,055 1,939,416
----------- -----------
CASH, END OF YEAR $ 3,524,060 $ 2,626,740
----------- -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash Paid During the Period For:
Interest $ 1,372,879 $ 692,556
Income Tax $ 171,043 $ 117,042
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
Page - 6
<PAGE> 7
VALRICO BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
BASIS OF PRESENTATION
Valrico Bancorp, Inc., a one-bank holding company acquired 100% stock of
Valrico State Bank as of May 31, 1995. Therefore, the unaudited consolidated
financial statements include the accounts of Valrico Bancorp, Inc. (the
Company) and its wholly owned subsidiary, Valrico State Bank (the Bank).
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions of Form 10-Q. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. Significant
intercompany balances and transactions have been eliminated in the consolidated
financial statements.
Net income per share has been computed by dividing net income by the average
number of common shares outstanding of 296,845 shares as of September 30, 1996
and 301,279 as of September 30, 1995.
In the opinion of management, all adjustments have been made, consisting of
normal recurring entries necessary for fair presentation of interim financial
statements.
Page - 7
<PAGE> 8
VALRICO BANCORP, INC.
MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company's primary asset is its subsidiary bank, which is in its eighth year
of operation as of September 30, 1996. As of September 30, 1996, the Bank
deposits were $47,937,445 an increase of $3,163,823 or 7.07% since the end of
1995. As of September 30, 1996, demand deposits, primarily non-interest
bearing had the highest percentage of growth at 28.5% or an increase of
$1,867,782 since the end of 1995.
Loan demand had soften during the first quarter and the Bank experienced a
decline in loans. However, loan demand begin to increase the latter part of
the second quarter and well into the third quarter. As of September 30, 1996
net loans had increased $3,203,040 or 9.65% since the end of 1995.
Due to the strong growth in deposits and the soft loan demand the first
quarter, the Bank purchased a total of $3,819,982 in securities such as
Treasuries, Agencies, and Municipals. The deposits continue to grow in the
second quarter, then in the third quarter the Bank experienced a slight decline
in deposits with a strong loan demand positioning the Bank in a Fed Funds
purchase position in the amount of $645,000 at September 30, 1996.
Nonperforming assets include nonperforming loans and foreclosed real estate
held for sale. It is the general policy of the Subsidiary Bank to stop accruing
interest income when the loan is past due 90 days or more as to principal or
interest and the ultimate collection of either is in doubt. When a loan is
placed on a nonaccrual basis, any interest previously accrued but not collected
is reversed against current income unless the collateral for the loan is
sufficient to cover the accrued interest or a guarantor assures payment of
interest.
Page - 8
<PAGE> 9
The Bank had one nonperforming loan totaling $24,480 or .06% of total loans
and one ORE in the amount of $157,384 as of September 30, 1996.
As of September 30, 1996
Loans on nonaccrual............... $ 24,480
Past due loans 90+ days........... 0
Restructured loans................ 129,295
Potential problem loans........... 0
--------
TOTAL $153,775
Details of nonaccrual loan at September 30, 1996 appear below:
Principal balance................. $24,480
Interest that would have been
recorded under original terms..... Not material
Interest actually recorded........ Not material
Details of restructured loan at September 30, 1996 appear below:
Principal balance................. $129,295
Interest that would have been
recorded under original terms..... Not material
Interest actually recorded........ Not material
The allowance for credit losses at September 30, 1996 was $481,341 compared to
$491,563 at December 31, 1995. The Bank had $136,254 in write offs and
recoveries in the amount of $12,863 during the nine months ended September 30,
1996. A total of $113,169 has been expensed for provision for loan losses as
of September 30, 1996. Management considers the allowance to be adequate at
this time.
Analysis of the allowance for loan losses 9/30/96
Balance at beginning of period............... $491,563
Charge-offs:
Commercial, financial, and agricultural.... 134,627
Real-estate construction................... 0
Real- estate mortgage...................... 0
Installment loans to individuals........... 1,627
Lease financing............................ 0
Foreign.................................... 0
Recoveries:
Commercial, financial, and agricultural.... $ 11,656
Real-estate construction................... 0
Real- estate mortgage...................... 0
Installment loans to individuals........... 1,207
Lease financing............................ 0
Foreign.................................... 0
Net Charge-offs 123,391
Provisions charged to income................. 113,169
Balance at end of period..................... $481,341
Ratio of net-charge offs during the period to
average loans outstanding during the period.... .36%
Page - 9
<PAGE> 10
Analysis of the allowance for loan losses 12/31/95
Balance at beginning of period............... $397,281
Charge-offs:
Commercial, financial, and agricultural.... 860
Real-estate construction................... 0
Real- estate mortgage...................... 0
Installment loans to individuals........... 5,827
Lease financing............................ 0
Foreign.................................... 0
Recoveries:
Commercial, financial, and agricultural.... $ 0
Real-estate construction................... 0
Real- estate mortgage...................... 0
Installment loans to individuals........... 3,469
Lease financing............................ 0
Foreign.................................... 0
Net Charge-offs 3,218
Provisions charged to income................. 97,500
Balance at end of period..................... $491,563
Ratio of net-charge offs during the period to
average loans outstanding during the period.... .009%
Consolidated net income for the first nine months was $234,591 or $.790 per
share which compares to $265,224 or $.880 per share for the first nine months
ended September 30, 1995. While this represents a decline over the comparable
quarter of $30,633, the first nine months of 1996 includes expenses related to
our second branch which opened in September, 1995 and continues to have a
negative impact to net income. As of September 30, 1996, the year to date
total expenses for the Plant City branch were $239,945 and the net income after
expenses was a loss of $91,558. However, the branch continues to grow and
earnings continue to improve on a monthly basis. Breakeven is expected within
15 to 18 months.
Salaries and benefits represent 48.1% of noninterest expenses for the nine
months ended September 30, 1996 compared to 43.1% for the nine months ended
September 30, 1995. Salary expense for the nine months ended September 30,
1996 increased 28.6% over the same period for 1995, however the cost of our
second branch personnel was experienced throughout the nine month period in
1996 as stated above.
The Tier I capital ratio was 7.12% and the total capital ratio was 8.02% at
September 30, 1996. The Tier I capital ratio to total risk-weighted assets was
9.66% and total capital ratio to total risk-weighted assets was 10.89% at
September 30, 1996.
Page - 10
<PAGE> 11
As of September 30, 1996, the Company had redeemed 2,434 shares in the amount
of $29,258. Currently, the Company has no stock repurchase plan, however
periodically the Company will purchase stock due to an inactive market.
Page - 11
<PAGE> 12
VALRICO BANCORP, INC.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
No reports on Form 8-K were filed for the quarter ended September 30, 1996.
Page - 12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VALRICO BANCORP, INC.
November 7, 1996 By: /s/ Larry R. Tracy
- ---------------- -----------------------------
(Date) Larry R. Tracy,
President and Chief Executive
Officer
November 7, 1996 By: /s/ Jerry L. Ball
- ---------------- -----------------------------
(Date) Jerry L. Ball,
Executive Vice President
and Cashier
Page - 13
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000942789
<NAME> VALRICO BANCORP, INC
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 3,524
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 7,168
<INVESTMENTS-CARRYING> 3,498
<INVESTMENTS-MARKET> 3,464
<LOANS> 36,875
<ALLOWANCE> 481
<TOTAL-ASSETS> 53,259
<DEPOSITS> 47,937
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,556
<LONG-TERM> 0
0
0
<COMMON> 297
<OTHER-SE> 3,469
<TOTAL-LIABILITIES-AND-EQUITY> 53,259
<INTEREST-LOAN> 2,533
<INTEREST-INVEST> 590
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 3,123
<INTEREST-DEPOSIT> 1,130
<INTEREST-EXPENSE> 1,142
<INTEREST-INCOME-NET> 1,980
<LOAN-LOSSES> 113
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,805
<INCOME-PRETAX> 378
<INCOME-PRE-EXTRAORDINARY> 235
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 235
<EPS-PRIMARY> .790
<EPS-DILUTED> .790
<YIELD-ACTUAL> 5.52
<LOANS-NON> 24
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 492
<CHARGE-OFFS> 136
<RECOVERIES> 12
<ALLOWANCE-CLOSE> 481
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
