<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 JUNE 30, 1997
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
incorporation or organization) Identification No.)
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 JUNE 30, 1997, THERE WERE 296,845 SHARES OF COMMON STOCK OUTSTANDING.
<PAGE> 2
VALRICO BANCORP, INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page Number
- ----------------------------- -----------
<S> <C>
Item 1. Financial Statements:
Consolidated balance sheets - June 30, 1997
and December 31, 1996 3
Consolidated statements of income - Three months
ended June 30, 1997 and 1996; Six months ended
June 30, 1997 and 1996 4
Consolidated statements of shareholders' equity -
Six months ended June 30, 1997 and 1996 5
Consolidated statements of cash flows - Six months
ended June 30, 1997 and 1996 6
Notes to consolidated financial statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION 10
- --------------------------
SIGNATURES 11
- ----------
</TABLE>
<PAGE> 3
VALRICO BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
-------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and non-interest bearing deposits $ 4,497,280 $ 3,677,677
Federal funds sold 2,645,000 358,000
Securities available-for-sale 7,303,801 7,159,983
Securities held-to-maturity 2,717,110 3,240,390
Loans 39,515,400 37,897,300
Facilities 2,633,310 1,014,945
Other real estate 131,750 -
Accrued interest receivable 365,112 416,178
Other assets 1,234,895 1,154,347
----------- -----------
Total assets $61,043,658 $54,918,820
=========== ===========
LIABILITIES
Deposits:
Demand deposits $10,302,615 $ 8,557,352
NOW accounts 9,629,529 8,749,942
Money market accounts 4,425,353 3,392,591
Savings accounts 6,044,461 6,053,476
Time, $100,000 and over 5,460,903 4,455,087
Other time deposits 17,419,124 17,667,352
----------- -----------
Total deposits 53,281,985 48,875,800
Federal funds purchased 1,000,000 1,100,000
Securities sold under agreements to repurchase 483,331 487,882
Accounts payable and accrued liabilities 555,980 556,134
Mortgage payable 1,294,260 -
Loan payable 400,000 -
----------- -----------
Total liabilities 57,015,556 51,019,816
----------- -----------
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, no par value, authorized 1,000,000
shares, issued and outstanding 296,845 shares 296,845 296,845
Capital surplus 2,354,193 2,354,193
Retained earnings 1,404,311 1,269,111
Net unrealized holding losses on securities (27,247) (21,145)
----------- -----------
Total stockholders' equity 4,028,102 3,899,004
----------- -----------
Total liabilities and stockholders' equity $61,043,658 $54,918,820
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
3
<PAGE> 4
VALRICO BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- --------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $ 942,440 $ 828,544 $1,845,912 $1,664,816
Interest on investment securities 161,408 156,003 321,661 267,776
Income on Federal funds sold 49,611 61,292 65,218 123,658
---------- ---------- ---------- ----------
Total interest income 1,153,459 1,045,839 2,232,791 2,056,250
---------- ---------- ---------- ----------
Interest expense:
Interest on deposits 412,694 373,689 790,608 749,632
Interest on Federal funds purchased and
securities sold under agreements
to repurchase 12,011 4,203 29,839 7,191
---------- ---------- ---------- ----------
Total interest expense 424,705 377,892 820,447 756,823
---------- ---------- ---------- ----------
Net interest income 728,754 667,947 1,412,344 1,299,427
Provision for loan losses 90,000 20,000 120,000 55,000
---------- ---------- ---------- ----------
Net interest income after
provision for loan losses 638,754 647,947 1,292,344 1,244,427
---------- ---------- ---------- ----------
Other income:
Service charges on deposit accounts 98,762 85,818 190,845 163,212
Miscellaneous income 11,556 21,807 35,428 42,101
---------- ---------- ---------- ----------
Total other income 110,318 107,625 226,273 205,313
---------- ---------- ---------- ----------
Other expenses:
Salaries and employee benefits 355,193 292,796 642,686 580,671
Occupancy expense 88,818 94,720 169,966 189,241
Equipment expense 62,010 67,925 124,487 136,564
Stationery, printing and supplies 20,937 22,916 40,741 42,443
Miscellaneous expenses 168,991 125,515 317,243 256,104
---------- ---------- ---------- ----------
Total other expenses 695,949 603,872 1,295,123 1,205,023
---------- ---------- ---------- ----------
Income before income taxes 53,123 151,700 223,494 244,717
Income taxes 21,621 60,500 88,294 93,921
---------- ---------- ---------- ----------
Net income $ 31,502 $ 91,200 $ 135,200 $ 150,796
========== ========== ========== ==========
Per share information:
Average shares outstanding 296,845 297,345 296,845 297,345
========== ========== ========== ==========
Net income per share $ 0.11 $ 0.31 $ 0.46 $ 0.51
========== ========== ========== ==========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
4
<PAGE> 5
VALRICO BANCORP, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
NET UNREALIZED TOTAL
COMMON CAPITAL RETAINED HOLDING LOSSES STOCKHOLDERS'
STOCK SURPLUS EARNINGS ON SECURITIES EQUITY
------ ------- -------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996 $296,845 $2,354,193 $1,269,111 $(21,145) $3,899,004
Net income -- -- 135,200 -- 135,200
Net change in net unrealized
holding losses on securities -- -- -- (6,102) (6,102)
-------- ---------- ---------- -------- ----------
Balance, June 30, 1997 $296,845 $2,354,193 $1,404,311 $(27,247) $4,028,102
======== ========== ========== ======== ==========
Balance, December 31, 1995 $299,279 $2,323,160 $1,008,662 $(35,625) $3,595,476
Net income -- -- 150,796 -- 150,796
Net change in net unrealized
holding losses on securities -- -- -- (54,567) (54,567)
Transfer -- 12,093 (12,093) -- --
Stock redemption (1,934) (14,834) (6,440) -- (23,208)
-------- ---------- ---------- -------- ----------
Balance, June 30, 1996 $297,345 $2,320,419 $1,140,925 $(90,192) $3,668,497
======== ========== ========== ======== ==========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
5
<PAGE> 6
VALRICO BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1997 1996
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 135,200 $ 150,796
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Provision for loan losses 120,000 55,000
Depreciation and amortization 115,873 98,035
Net amortization (accretion) of
investments security premiums and discounts 6,719 (25,199)
(Increase) decrease in assets:
Accrued interest receivable 51,066 2,014
Other assets (79,271) (23,822)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities (154) (275,374)
----------- -----------
Net cash provided by (used in)
operating activities 349,433 (18,550)
----------- -----------
Cash flows from investing activities:
Securities available for sale:
Purchase of investment securities (266,000) (3,308,690)
Proceeds from maturities of investment
securities 108,651 1,362,652
Securities to be held to maturity:
Purchase of investment securities - (511,292)
Proceeds from maturities of investment
securities 510,277 72,664
(Increase) decrease in deferred income tax (1,277) (24,969)
(Increase) decrease in Federal funds sold (2,287,000) (1,227,000)
Net (increase) decrease in loans (1,856,137) (263,360)
Purchase of facilities (1,734,238) (8,377)
Other real estate - 178,272
----------- -----------
Net cash used in investing activities (5,525,724) (3,730,100)
----------- -----------
Cash flows from financing activities:
Increase in deposits 4,406,185 4,721,440
Decrease in Federal funds purchased (100,000) -
Net (decrease) increase in securities
sold under agreements to repurchase (4,551) 81,632
Net increase in notes payable 1,694,260 -
Redemption of common stock - (23,208)
----------- -----------
Net cash provided by financing
activities 5,995,894 4,779,864
----------- -----------
Net increase in cash 819,603 1,031,214
Cash, beginning of period 3,677,677 2,327,055
----------- -----------
Cash, end of period $ 4,497,280 $ 3,358,269
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 857,563 $ 530,213
Income taxes $ 94,680 $ 96,643
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
6
<PAGE> 7
VALRICO BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1997
BASIS OF PRESENTATION
- ---------------------
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles. In the opinion of
management, all necessary adjustments (consisting of normal recurring entries)
have been made for a fair presentation of the accompanying unaudited
consolidated financial statements. These financial statements rely, in part, on
estimates. The results for the period are not necessarily indicative of the
results to be expected for the entire year.
Valrico Bancorp, Inc., a one-bank holding company, acquired 100% of the common
stock of Valrico State Bank as of May 31, 1995 in a transaction accounted for
similar to a pooling of interests. 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).
Significant intercompany balances and transactions have been eliminated in
consolidation.
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 June 30, 1997, and
297,345 as of June 30, 1996.
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 has just completed its
eighth full year of operation. For the six months ended June 30, 1997, the Bank
experienced a growth in deposits with an increase of $4,406,185 or 9.02%. Money
market accounts had the highest percentage of growth at 30.45%, or an increase
of $1,032,762 as of June 30, 1997.
Loans increased $1,618,100 or 4.27% for the six months ended June 30, 1997.
Loan demand has improved compared to the previous quarter ended March 31, 1997.
Agricultural lines of credit, which are normally drawn against during this
period, have experienced a slight increase in outstandings. The allowance for
credit losses at June 30, 1997 was $514,217 compared to $500,504 at December
31, 1996. The Bank had $126,849 in charge-offs and had recoveries in the amount
of $20,562 during the six months ended June 30, 1997, and nonperforming does
not have loans at June 30, 1997. A total of $120,000 was expensed for provision
for loan losses as of June 30, 1997. Management considers the allowance to be
adequate at this time.
Nonaccrual loans amounted to $0 and $188,000 at June 30, 1997 and 1996,
respectively. Loans 90 days or more past due amounted to $25,000 and $43,000 at
June 30, 1997 and 1996, respectively. There were no restructured loans at June
30, 1997 and 1996. The following table sets forth a summary of loan loss
experience:
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
-------- ------------
<S> <C> <C>
Balance at beginning of period $ 500,504 $ 491,563
--------- ---------
Charge-offs:
Commercial, financial and agricultural 96,959 189,491
Real estate-construction -- --
Real estate-mortgage -- --
Installment loans to individuals 29,890 14,875
Lease financing -- --
--------- ---------
126,849 204,366
--------- ---------
Recoveries:
Commercial, financial and agricultural 20,237 30,656
Real estate-construction -- --
Real estate-mortgage -- --
Installment loans to individuals 325 1,207
Lease financing -- --
--------- ---------
20,562 31,863
--------- ---------
Net charge-offs (106,287) (172,503)
Additions charged to operations 120,000 181,444
--------- ---------
Balance at end of period $ 514,217 $ 500,504
========= =========
Ratio of net charge-offs during the period
to average loans outstanding during the
period 0.00% 0.46%
========= =========
</TABLE>
8
<PAGE> 9
VALRICO BANCORP, INC.
MANAGEMENT DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION (CONTINUED)
Consolidated net income for the six months ended June 30, 1997 was $135,200 or
$.46 per share which compares to $150,796 or $.51 per share for the first six
months of 1996. This represents a decrease from the comparable period of
$15,596 which is attributable mostly to an increase in the allowance for loan
losses.
Salaries and benefits represent 49.6% of non-interest expenses for the six
months ended June 30, 1997, compared to 48.0% for the six months ended June 30,
1996. Salary expense for the six months ended June 30, 1997 increased 10.7%
over the same period for 1996.
The Tier I capital ratio was 6.72% and the total capital ratio was 7.58% at
June 30, 1997. The Tier I capital to total risk-weighted assets ratio was 9.42%
and total capital to total risk-weighted assets ratio was 10.62% at June 30,
1997.
9
<PAGE> 10
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 June 30, 1997.
10
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on August 13, 1997 on its
behalf by the undersigned thereunto duly authorized.
VALRICO BANCORP, INC.
By: \s\ Bob McLean
-----------------------------------------
Bob McLean
President and Chief Executive Officer
By: \s\ Jerry L. Ball
-----------------------------------------
Jerry L. Ball
Vice President
11
<PAGE> 12
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000942789
<NAME> VALRICO BANCORP, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,497
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,645
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 7,304
<INVESTMENTS-CARRYING> 2,717
<INVESTMENTS-MARKET> 2,763
<LOANS> 39,515
<ALLOWANCE> 514
<TOTAL-ASSETS> 61,044
<DEPOSITS> 53,282
<SHORT-TERM> 0
<LIABILITIES-OTHER> 3,734
<LONG-TERM> 0
0
0
<COMMON> 297
<OTHER-SE> 3,731
<TOTAL-LIABILITIES-AND-EQUITY> 61,044
<INTEREST-LOAN> 1,846
<INTEREST-INVEST> 322
<INTEREST-OTHER> 65
<INTEREST-TOTAL> 2,233
<INTEREST-DEPOSIT> 791
<INTEREST-EXPENSE> 821
<INTEREST-INCOME-NET> 1,412
<LOAN-LOSSES> 120
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,295
<INCOME-PRETAX> 223
<INCOME-PRE-EXTRAORDINARY> 223
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 135
<EPS-PRIMARY> .456
<EPS-DILUTED> .456
<YIELD-ACTUAL> 4.89
<LOANS-NON> 0
<LOANS-PAST> 25
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 532
<ALLOWANCE-OPEN> 501
<CHARGE-OFFS> 127
<RECOVERIES> 20
<ALLOWANCE-CLOSE> 514
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
