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Previous: R B RUBBER PRODUCTS INC, SC 13D, 1999-05-11 |
Next: INDUSTRIAL BANCORP INC, 10-Q, 1999-05-11 |
<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 March 31, 1999
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 of other jurisdiction of (I.R.S. Employee
incorporation of 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 MARCH 31, 1999, THERE WERE 306,790 SHARES OF COMMON STOCK OUTSTANDING
<PAGE> 2
VALRICO BANCORP, INC.
<TABLE>
<CAPTION>
PAGE NUMBER
<S> <C> <C>
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated balance sheets - March 31, 1999 and December 31, 1998 3
Consolidated statements of income - Three months ended March 31, 1999 and 1998 4
Consolidated statement of stockholders' equity - Three 5
months ended March 31, 1999 and 1998
Consolidated statements of cash flows - Three months 6
ended March 31, 1999 and 1998
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>
2
<PAGE> 3
VALRICO BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
----------- ------------
<S> <C> <C>
Assets
Cash and Non Interest Bearing Deposits $ 5,083,901 $ 4,454,308
Federal Funds Sold 7,763,000 6,356,000
Securities Available for Sale 6,536,372 6,782,714
Securities Held to Maturity 1,980,448 2,049,431
Loans 55,047,223 55,694,340
Facilities 3,581,000 3,404,642
Other Real Estate 101,573 101,574
Accrued Interest Receivable 459,314 478,788
Other Assets 1,455,515 1,362,786
----------- -----------
Total Assets 82,008,348 $80,684,583
=========== ===========
Liabilities
Deposits:
Demand Deposits $13,305,183 $12,704,041
NOW Accounts 13,894,538 14,354,403
Money Market Accounts 4,864,849 6,206,633
Savings Accounts 8,982,188 8,128,151
Time, $100,000 and over 9,638,713 6,990,780
Other Time Deposits 21,063,434 22,121,392
----------- -----------
Total Deposits 71,748,905 70,505,400
Federal Funds Purchased 2,000,000 2,000,000
Securities Sold Under the Agreement to Repurchase 620,648 646,409
Accounts Payable and Accrued Liabilities 715,768 886,853
Mortgage Payable 1,208,657 1,222,196
Loan Payable 699,950 499,950
----------- -----------
Total Liabilities 76,993,928 75,760,808
----------- -----------
Commitments and Contingencies
Stockholders Equity
Common Stock, No Par Value, Authorized 1,000,000
shares, issued and outstanding 306,790 on March 31, 1999
Issued and outstanding 307,790 on Dec. 31, 1998 306,790 307,790
Capital Surplus 2,551,070 2,566,070
Retained Earnings 2,174,427 2,041,125
Net Unrealized Holding Losses on Securities (17,867) 8,790
----------- -----------
Total Stockholders Equity 5,014,420 4,923,775
----------- -----------
Total Liabilities and Stockholders Equity $82,008,348 $80,684,583
=========== ===========
</TABLE>
See accompanying notes to Consolidated Financial Statements
3
<PAGE> 4
VALRICO BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1999 1998
---------- ----------
<S> <C> <C>
Interest Income
Interest and Fees on Loans $1,281,153 $1,144,071
Interest on Investment Securities 121,032 121,928
Income on Federal Funds Sold 88,618 18,963
---------- ----------
Total Interest Income 1,490,803 1,284,962
Interest Expense
Interest on Deposits 539,269 447,576
Interest on Federal Funds Purchased
And Securities Sold under agreement
to Repurchase 72,054 51,253
---------- ----------
Total Interest Expense 611,323 498,829
---------- ----------
Net Interest Income 879,480 786,133
Provision for Loan Losses 24,000 48,000
---------- ----------
Net Interest Income after
Provision for loan losses 855,480 738,133
---------- ----------
Other Income:
Service Charge on Deposit Accounts 152,793 135,601
Miscellaneous Income 25,877 21,091
---------- ----------
Total Other Income 178,670 156,692
---------- ----------
Other Expenses:
Salaries and Employee Benefits 410,434 361,743
Occupancy Expense 91,969 66,365
Equipment Expense 88,021 65,455
Stationary, Printing, and Supplies 41,398 53,972
Miscellaneous Expenses 194,026 157,871
---------- ----------
Total Other Expenses 825,848 705,406
---------- ----------
Income Before Income Taxes 208,302 189,409
Income Taxes 75,000 66,500
---------- ----------
Net Income $ 133,302 $ 122,919
========== ==========
Per share Information:
Average Shares Outstanding 307,457 297,915
========== ==========
Net Income Per Share $ 0.43 $ 0.41
========== ==========
</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
HOLDING STOCK
COMMON CAPITAL RETAINED LOSSES ON HOLDERS'
STOCK SURPLUS EARNINGS SECURITIES EQUITY
--------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1998 $307,790 $2,566,070 $2,041,125 $ 8,790 $4,923,775
Net Income 133,302 133,302
Stock Redemption (1,000) (15,000) (16,000)
Net Change in Net Unrealized
holding losses on securities (26,657) (26,657)
-------- ---------- ---------- --------- ----------
Balance, March 31, 1999 $306,790 $2,551,070 $2,174,427 $(17,867) $5,014,420
======== ========== ========== ========= ==========
Balance, December 31, 1997 $299,115 $2,431,145 $1,515,800 $(8,907) $4,237,153
Net Income -- -- 122,919 -- 122,919
Stock Redemption (2,400) (31,200) (33,600)
Net Change in Net Unrealized
holding losses on securities -- -- -- (10,442) (10,442)
-------- ---------- ---------- --------- ----------
Balance, March 31, 1998 $296,715 $2,399,945 $1,638,719 $(19,349) $4,316,030
======== ========== ========== ========= ==========
</TABLE>
See accompanying notes to Consolidated Financial Statements
5
<PAGE> 6
VALRICO BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1999 1998
----------- -----------
<S> <C> <C>
Cash Flows from Operating Activities
Net Income $ 133,302 $ 103,698
Adjustments to Reconcile net income to net
Cash provided by (used in) operating activities:
Provision for Loan Losses 24,000 30,000
Depreciation and amortization 76,467 57,866
Net amortization (accretion) of investments
Security premiums and discounts 2,681 3,616
(Increase) Decrease in assets:
Accrued Interest Receivable 19,474 20,666
Other Assets (92,729) 1,655
Increase (Decrease) in liabilities
Accounts payable and Accrued Liabilities 171,085 (28,540)
----------- -----------
Net Cash provided by (used in) operating
Activities 334,280 188,961
----------- -----------
Cash flows from investing activities
Securities available for sale:
Purchase of investment securities -- $ (16,000)
Proceeds from maturities of investment securities 202,146 50,590
Securities to be Held to Maturity:
Proceeds from maturities of investment securities 70,109 253,058
(Increase) Decrease in Deferred income tax -- --
(Increase) Decrease in Federal Funds Sold (1,407,000) (1,579,000)
Net (Increase) Decrease in Loans 292,280 (142,212)
Purchase of facilities (250,427) (1,712,375)
Proceeds from the sale of Other Real Estate -- --
----------- -----------
Net Cash provided by (used in) Investing Activities (1,092,892) (3,145,939)
----------- -----------
Cash flows form financing activities:
Increase (Decrease) in deposits 1,243,505 2,435,503
Increase (Decrease) in Federal funds purchased -- (100,000)
Net increase (Decrease) in securities sold under agreement
to repurchase (25,761) 116,279
Net increase (Decrease)in notes payable 186,461 1,704,774
Sale (redemption) of Common Stock (16,000) --
----------- -----------
Net Cash Provided by (used by) financing activities 1,388,205 4,156,556
----------- -----------
Net increase (decrease) in cash 629,593 1,199,578
Cash, beginning of period 4,454,308 3,677,677
----------- -----------
Cash, ending of period $ 5,083,901 $4,877,255
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 611,323 $ 477,621
Income taxes $ 417,289 $ 12,602
</TABLE>
See accompanying notes to Consolidated Financial Statements
6
<PAGE> 7
VALRICO BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 1999
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 307,457 as of March 31, 1999, and
297,915 as of March 31, 1998.
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 tenth year
of operation. During the three months ended March 31, 1999, the Bank
experienced a growth in deposits with an increase of $1,243,505 or 1.8%. Time
over 100,000 Accounts had the highest percentage of growth at 37.9%, or an
increase of $2,647,933 in the three months ended March 31, 1999.
Loan growth increased $647,081 or 1.16% for the three months ended March 31,
1999. The allowance for credit losses at March 31, 1999 was at $778,919
compared to $776,382 at December 31, 1998. The Bank had $22,446 in charge-offs
and had recoveries in the amount of $983 during the three months ended March
31, 1999, and has loan classified as troubled in the amount of $170,452 as of
March 31, 1999. A total of $24,000 was expensed for provision for loan losses
during the period. Management considers the allowance to be adequate at this
time.
Nonaccrual loans amounted to $43,834 and $0 at March 31, 1999 and 1998,
respectively. Loans 90 days or more past due amounted to $0 and $66,357 at
March 31, 1999 and 1998, respectively. There were restructured loans in the
amount of $53,212 and $50,000 at March 31, 1999 and 1998, respectively. The
following table sets forth a summary of loan loss experience:
Analysis of the Allowance for Loan Losses
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
----------- ------------
<S> <C> <C>
Balance at Beginning of Period $776,382 $576,347
-------- --------
Charge-offs:
Commercial, Financial and Agricultural -- --
Real Estate-Construction -- --
Real Estate-Mortgage -- --
Installment Loans to Individuals 22,446 23,672
Lease Financing -- --
-------- --------
Total Charge-offs 22,446 23,672
-------- --------
Recoveries:
Commercial, Financial and Agricultural 786 4,962
Real Estate-Construction -- --
Real Estate-Mortgage -- --
Installment Loans to Individuals 197 8,745
Lease Financing -- --
-------- --------
Total Recoveries 983 13,707
-------- --------
Net Charge-offs (21,463) (9,965)
Additions Charged to Operation 24,000 210,000
-------- --------
Balance at end of Period $778,919 $776,382
======== ========
Ratio of Net Charge-offs during the period to average loans
outstanding during the period (.04%) (.02%)
======== ========
</TABLE>
8
<PAGE> 9
VALRICO BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Consolidated net income for the three months ending March 31, 1999 was $133,302
or $0.43 per share which compares to $122,919 or $0.35 per share for the same
period in 1998. This represents an increase over the comparable quarter of
$10,383, which is attributable mostly to an increase in loans and related
revenues.
Salaries and benefits represent 49.7% of non-interest expenses for the three
months ended March 31, 1999, compared to 51.3% for the three months ended March
31, 1998. Salary expense for the three months ended March 31, 1999 increased
13.5% over the same period for 1998. This increase is primarily due to the
opening of a new office location on January 22, 1999 and the addition of new
support staff to cover the work of the new location.
The Tier I capital ratio was 6.53% and Total Capital ratio was 7.49% at March
31, 1999. The tier I capital to total risk-weighted assets ratio was 8.43% at
March 31, 1999.
The bank has currently spent approximately $130,000 on system and software
upgrades, with the anticipation of spending an additional $35,000. Not included
in this cost were a number of computers that were replaced, not for Y2K
reasons, but as a planned replacement of antiquated machines. This move was
more for improved efficiency than Y2K as most of the machines replaced had
already been tested for Y2K. In an attempt to head off possible loan losses
relating to Y2K, we are planning to set aside $8,000 a month until the year
2000. This reserve is for the potential loan losses as a direct result of Y2K
problems, and also litigation concerns arising for Y2K. We feel that with our
current loan portfolio and our current size that this provision will be
sufficient to cover those losses. A review will be conducted periodically to
modify this provision as needs are more recognized. Although not presently
anticipated, regulatory agencies require that management disclose of the worst
case scenario, or if the bank's systems fail to operate in the new year. This
worst case scenario would include the interruption of normal customer service
and the bank's funds management. We currently have contingency plans in effect
to help to minimize the potential of this scenario and its effects to both
customers and stockholders. Management will continue to review the issues
related to Y2K on an ongoing basis to ensure continued compliance. Management
feels that this issue is important and will prepare reviews with both internal
and external auditors to prepare the bank for the year 2000.
9
<PAGE> 10
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 March 31, 1999.
27 - Financial Data Schedule (for SEC use only).
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 May 7th, 1999 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
Executive Vice President
11
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VALRICO BANCORP, INC. FOR THE THREE MONTHS ENDED
MARCH 31, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 5,008
<INT-BEARING-DEPOSITS> 76
<FED-FUNDS-SOLD> 7,763
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 6,536
<INVESTMENTS-CARRYING> 1,980
<INVESTMENTS-MARKET> 1,972
<LOANS> 55,826
<ALLOWANCE> 779
<TOTAL-ASSETS> 82,008
<DEPOSITS> 71,749
<SHORT-TERM> 1,321
<LIABILITIES-OTHER> 716
<LONG-TERM> 3,209
0
0
<COMMON> 307
<OTHER-SE> 2,551
<TOTAL-LIABILITIES-AND-EQUITY> 82,008
<INTEREST-LOAN> 1,281
<INTEREST-INVEST> 121
<INTEREST-OTHER> 89
<INTEREST-TOTAL> 1,491
<INTEREST-DEPOSIT> 539
<INTEREST-EXPENSE> 611
<INTEREST-INCOME-NET> 880
<LOAN-LOSSES> 24
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 826
<INCOME-PRETAX> 208
<INCOME-PRE-EXTRAORDINARY> 75
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 133
<EPS-PRIMARY> 0.43
<EPS-DILUTED> 0.43
<YIELD-ACTUAL> 4.69
<LOANS-NON> 44
<LOANS-PAST> 0
<LOANS-TROUBLED> 170
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 776
<CHARGE-OFFS> 22
<RECOVERIES> 1
<ALLOWANCE-CLOSE> 779
<ALLOWANCE-DOMESTIC> 779
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
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