<PAGE>1
US SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_X__ Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 1998
___ Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from ___________ to ______________
Commission file number - 0-29732
GEORGIA BANCSHARES, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Georgia 58-2176047
(State or Other Jurisdiction (IRS Employer Identification No.)
of Incorporation)
3333 Lawrenceville Highway
Tucker, Georgia 30084
(Address of Principal Executive Offices)
(770) 491-3333
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) has 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.
Yes X No
Common stock, par value $1.60 per share: 1,460,570 shares
outstanding as of November 12, 1998
Traditional Small Business Disclosure Format:
Yes X No
<PAGE>2
GEORGIA BANCSHARES, INC.
AND SUBSIDIARY
INDEX
Part I: Financial Information Page No.
Item 1. Financial Statements
Consolidated Balance Sheets (unaudited) September 30,
1998 and (unaudited) December 31, 1997 2
Consolidated Statements of Earnings (unaudited) for
the Three and Nine Months Ended September 30, 1998
and 1997 3
Consolidated Statements of Comprehensive Earnings
(unaudited)for the Three and Nine Months Ended
September 30, 1998 and 1997 4
Consolidated Statements of Cash Flows (unaudited)
for the Nine Months Ended September 30, 1998 and 1997 5
Notes to Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II: Other Information 12
<PAGE>3
Part I: Financial Information
Item 1. Financial Statements
<TABLE>
<CAPTION>
GEORGIA BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Balance Sheet
September 30, 1998 and December 31, 1997
(Unaudited)
Assets
Sept. 30, December 31,
1998 1997
<S> <C> <C>
Cash and due from banks $ 3,936,560 3,527,565
Federal funds sold 5,580,000 7,436,000
Investment securities available for sale (amortized
cost of $11,824,479 and $18,856,200) 11,906,773 18,834,981
Loans 51,835,828 45,345,584
Less: Allowance for loan losses 763,451 696,679
---------- ----------
Loans, net 51,072,377 44,648,905
---------- ----------
Premises and equipment, net 2,781,353 2,853,414
Other assets 1,832,520 2,055,454
--------- ---------
$ 77,109,583 79,356,319
========== ==========
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest-bearing $ 12,219,409 10,547,045
Interest-bearing 56,877,229 61,867,454
` ---------- ----------
Total deposits 69,096,638 72,414,499
Other liabilities 785,601 291,043
---------- ----------
Total liabilities 69,882,239 72,705,542
---------- ----------
Stockholders' equity:
Common stock, $1.60 par value; authorized
3,000,000 shares; issued and outstanding
1,460,570 shares 2,336,912 2,336,912
Capital surplus 3,544,159 3,536,659
Accumulated earnings 1,401,139 896,291
Unrealized loss on investment securities, net of tax (54,866) (119,085)
--------- ----------
Total stockholders' equity 7,227,344 6,650,777
--------- ----------
$ 77,109,583 79,356,319
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>4
<TABLE>
<CAPTION>
GEORGIA BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Statements of Earnings
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
Interest income:
<S> <C> <C> <C> <C>
Loans $ 1,314,117 1,095,315 3,809,357 2,976,908
Investment securities 202,311 241,000 719,387 739,627
Federal funds sold 28,224 98,758 136,804 139,340
------ ------ ------- -------
Total interest income 1,544,652 1,435,073 4,665,548 3,855,875
--------- --------- --------- ---------
Interest expense:
Demand deposits 100,169 64,588 260,103 192,367
Savings deposits 49,769 50,398 143,437 145,737
Time deposits 471,958 555,227 1,632,141 1,365,933
Other 320 - 353 2,849
--- ---- --- -----
Total interest expense 622,216 670,213 2,036,034 1,706,886
------- ------- --------- ----------
Net interest income 922,436 764,860 2,629,514 2,148,989
Provision for loan losses 60,000 77,500 195,000 155,500
------ ------- ------- -------
Net interest income after provision for
loan losses 862,436 687,360 2,434,514 1,996,489
------- -------- --------- ---------
Other income:
Service charges on deposit accounts 85,518 65,608 236,704 211,926
Net gain (loss) on securities transactions 6,973 (702) 19,427 (1,462)
Other operating income 34,174 32,967 119,123 91,763
------ ------ ------- ------
Total other income 126,665 112,297 375,254 316,651
-------- ------- ------- --------
Other expense:
Salaries and other personnel expense 310,649 269,435 920,176 823,935
Net occupancy and equipment expense 101,714 83,151 300,516 271,412
Other operating expense 237,683 182,650 645,781 535,805
-------- ------- ------- --------
Total other expense 650,046 535,236 1,866,473 1,631,152
------- -------- --------- ----------
Earnings before income taxes 339,055 264,421 943,295 681,988
Income tax expenses 121,220 93,190 306,942 239,178
------- -------- ------- --------
Net earnings $ 217,835 171,231 636,353 422,810
======= ======== ======= ========
Earnings per common share $ .15 .12 .44 .29
==== === === ===
Earnings per common share-assuming dilution $ .15 .12 .43 .29
=== === === ===
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>5
<TABLE>
<CAPTION>
GEORGIA BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Statement of Comprehensive Earnings
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net earnings $ 217,835 171,231 636,353 422,810
Other comprehensive earnings, net of tax:
Unrealized gains on securities:
Unrealized holding gains
arising during period 55,114 21.335 37,891 28,672
Less: Reclassification adjustment for gains
included in net income (118) - (8,810) (9,850)
------ ----- ----- -----
Total other comprehensive income 54,996 21,335 29,081 18,822
------ ------ ------ ------
Comprehensive earnings $ 272,831 192,566 665,434 441,632
======= ======= ======= =======
</TABLE>
<PAGE>6
<TABLE>
<CAPTION>
GEORGIA BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Nine Months Ended
September 30,
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 636,353 442,810
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Provision for loan losses 195,000 152,500
Deferred tax benefits 8,802 (54,256)
Depreciation, amortization and accretion 159,292 163,519
(Gain) Loss on sale of Investments (19,426) 1,462
Change in assets and liabilities:
Prepaid expenses and other assets 214,672 (330,190)
Accrued expenses and other liabilities 494,558 488,624
------- --------
Net cash provided (used) by operating
activities 1,689,251 850,045
--------- -------
Cash flows from investing activities:
Proceeds from sales, maturities and paydowns of
investment securities 14,045,786 4,749,140
Purchases of investment securities (7,029,043) (4,731,824)
Net increase in loans (6,618,472) (10,988,052)
Purchases of premises and equipment (85,161) (63,369)
-------- --------
Net cash provided (used) by investing
activities 313,110 (10,875,441)
------- ----------
Cash flows from financing activities:
Net change in deposits (3,317,861) 14,635,987
Dividends paid (131,505) (116,845)
--------- ----------
Net cash provided (used) by financing
activities (3,449,366) 14,519,142
----------- ----------
Net increase (decrease) in cash and cash equivalents (1,447,005) 4,493,746
Cash and cash equivalents at beginning of the period 10,963,565 6,583,556
---------- ---------
Cash and cash equivalents at end of period $ 9,516,560 11,077,302
========= ==========
Supplemental cash flow information:
Cash paid for interest $ 1,671,945 1,524,898
========= =========
Cash paid for income taxes $ 312,314 352,087
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>7
GEORGIA BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information, and with the instructions to Form 10-QSB and Item
310 (b) of Regulation S-B of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine month
period ended September 30, 1998, are not necessarily indicative of the
results that may be expected for the year ended December 31, 1998. For
further information refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1997.
(2) New Accounting Pronouncements
During the quarter, the Company adopted FASB Statement no. 130 Reporting
Comprehensive Income. The statement requires the reporting of
comprehensive income in addition to net income from operations.
Comprehensive income is a more inclusive financial reporting methodology
that includes disclosure of certain financial information that
historically has not been recognized in the calculation of net income.
During the quarter, the Company had unrealized holding gains on
investment securities which were reported as comprehensive income. The
beforetax and aftertax amount, as well as the tax (expense)benefit is
presented below:
<TABLE>
<CAPTION>
Three Months ended September 30, 1998
Tax
Before (Expense)/ After
Tax Benefit Tax
<S> <C> <C> <C>
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising
during period $ 88,837 (33,723) 55,114
Less: Reclassification adjustment for (gains) losses
realized in net income (191) 73 (118)
------ ------ ------
$ 88,646 (33,650) 54,996
====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Three Months ended September 30, 1997
Tax
Before (Expense)/ After
Tax Benefit Tax
<S> <C> <C> <C>
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising
during period $170,773 (64,825) 105,948
======= ====== =======
</TABLE>
<PAGE>8
GEORGIA BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
(2) New Accounting Pronouncements - (Continued)
<TABLE>
<CAPTION>
Nine Months ended September 30, 1998
Tax
Before (Expense)/ After
Tax Benefit Tax
<S> <C> <C> <C>
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising
during period $ 61,075 (23,184) 37,891
Less: Reclassification adjustment for (gains) losses
realized in net income (14,200) 5,390 (8,810)
------ ------ ------
$ 46,875 (17,866) 29,081
====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Nine Months ended September 30, 1997
Tax
Before (Expense)/ After
Tax Benefit Tax
<S> <C> <C> <C>
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising
during period $ 46,215 (17,543) 28,672
Less: Reclassification adjustment for (gains) losses
realized in net income (15,877) 6,027 (9,850)
------ ------ ------
$ 30,338 (11,516) 18,822
====== ====== ======
</TABLE>
(3) Earnings Per Share
The Company adopted FASB Statement No. 128, "Earnings Per Share",
effective December 31, 1997. This Statement requires the presentation of
"basic" earnings per share, which excludes the effect of dilution, and
"diluted" earnings per share, which includes the effect of dilution.
Earnings per common share amounts for the three and nine months periods
ended September 30, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
Three Months ended September 30, 1998
Net Earnings Common Share Per Share
(Numerator) (Denominator) Amount
<S> <C> <C> <C>
Earning per common share $ 217,835 1,460,570 $0.15
Effects of dilutive stock options - 17,334 -
------- --------- ----
Earnings per common share - assuming dilution $ 217,835 1,477,904 $0.15
======= ========= ====
</TABLE>
<TABLE>
<CAPTION>
Three Months ended September 30, 1997
Net Earnings Common Share Per Share
(Numerator) (Denominator) Amount
<S> <C> <C> <C>
Earning per common share $ 171,231 1,460,570 $0.12
Effects of dilutive stock options - 13,670 0
------- --------- ----
Earnings per common share - assuming dilution $ 171,231 1,474,240 $0.12
======= ========= ====
</TABLE>
<PAGE> 9
GEORGIA BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
(4) Earnings Per Share - (Continued)
<TABLE>
<CAPTION>
Nine Months ended September 30, 1998
Net Earnings Common Share Per Share
(Numerator) (Denominator) Amount
<S> <C> <C> <C>
Earning per common share $ 636,353 1,460,570 $0.44
Effects of dilutive stock options - 17,334 -
------- --------- ----
Earnings per common share - assuming dilution $ 636,353 1,477,904 $0.43
======= ========= ====
</TABLE>
<TABLE>
<CAPTION>
Nine Months ended September 30, 1997
Net Earnings Common Share Per Share
(Numerator) (Denominator) Amount
<S> <C> <C> <C>
Earning per common share $ 422,810 1,460,570 $0.29
Effects of dilutive stock options - 13,670 0
------- --------- ----
Earnings per common share - assuming dilution $ 422,810 1,474,240 $0.29
======= ========= ====
</TABLE>
4) Supplemental Financial Data
Components of other operating expenses of 1% of total interest income and
other income for the periods ended September 30, 1998 and 1997 are:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Advertising and Marketing $ 17,280 17,151 51,210 48,138
Data Processing 38,575 30,778 101,216 98,279
Postage and courier 11,495 9,788 36,373 37,099
Printing and supplies 19,795 21,522 51,754 59,002
Professional Fees 16,904 17,350 63,325 49,592
</TABLE>
<PAGE>10
GEORGIA BANCSHARES, INC.
AND SUBSIDIARY
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
For Each of the Nine Months in the Periods Ended
September 30, 1998 and 1997
Interim Financial Condition
Georgia Bancshares, Inc. (the "Company") reported total assets of
$77,109,583 as of September 30, 1998, compared to $79,356,319 at December 31,
1997. The most significant change in the composition of assets was an increase
in gross loans from $45,345,584 to $51,835,828. The increase in loans was funded
primarily by a decrease in investments of $6,928,208 (36.78%). The deposits have
declined by $3,317,861 (4.58%) during the nine months since December 31, 1997.
The decline has been caused by management's approach of reducing the cost of
funds. During 1997, the Bank's deposits grew $20,371,474. The majority of the
growth was in time deposits that increased the Bank's costs of funds. Management
has reduced the interest rate paid on time deposits, thereby reducing the time
deposits by $8,019,138 (16.67%). Demand deposits have increased by $4,723,054
(19.45%) since December 31, 1997. As a result of the loan growth and deposit
decline, the loan to deposit ratio has increased to 73.89% from 61.66% at
December 31, 1997. The Company's cash and cash equivalents have decreased by
$1,447,005 to $9,516,560 as of September 30, 1998.
Liquidity
The Bank's liquid assets as a percentage of total deposits were 13.77% at
September 30, 1998, compared to 15.14% at December 31, 1997. The Company has
approximately $3,600,000 in available unsecured federal fund lines of credit
with correspondent banks. The Company has also secured federal funds lines of
credit with correspondent banks equal to the amount of unpledged investment
securities. The Company has occasionally advanced on these lines during 1998.
The maximum amount borrowed under these lines at any one time was approximately
$ 1,990,000. Periodically, management analyzes the level of off-balance sheet
commitments such as unfunded loan equivalents, loan repayments, maturity of
investment securities, liquid investment, and available fund lines in an attempt
to minimize the possibility that a potential shortfall will exist.
Capital
The capital of the Company totaled $7,227,344 as of September 30, 1998.
The capital of the Company and the Bank exceeded all prescribed regulatory
capital guidelines. Regulations require that the most highly rated banks
maintain a Tier 1 leverage ratio of 3% plus an additional cushion of at least 1
to 2 percentage points. Tier 1 capital consists of common shareholders' equity,
less certain intangibles. The Bank's Tier 1 leverage ratio was 9.85% at
September 30, 1998, compared to 10.30% at December 31, 1997 Regulations require
that the Bank maintain a minimum total risk weighted capital ratio of 8%, with
one-half of this amount, or 4%, made up of Tier 1 capital. Risk-weighted assets
consist of balance sheet assets adjusted by risk category, and off-balance sheet
assets equivalents similarly adjusted. At September 30, 1998, the Bank had a
risk-weighted total capital ratio of 13.35%, compared to 13.30% at December 31,
1997, and a Tier I risk-weighted capital ratio of 12.09%, compared to 12.00% at
December 31, 1997.
Asset Quality
Nonperforming assets which includes nonaccruing loans, repossessed
collateral and loans for which payments are more than 90 days past due, totaled
$303,268 a decrease of $220,946 from December 31, 1997. There were no related
party loans that were considered nonperforming at September 30, 1998. The
composition of the nonperforming assets is presented in the following table:
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
<S> <C> <C>
Loans on nonaccrual $ 174,030 213,887
Other real estate owned 129,238 299,494
Other repossessed collateral - 10,833
--------- --------
Total nonperforming assets $ 303,268 524,214
========= ========
Total nonperforming assets as a percentage of
total loans (gross) and other real estate .58% 1.15%
==== =====
</TABLE>
<PAGE>11
GEORGIA BANCSHARES, INC.
AND SUBSIDIARY
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations - (continued)
For Each of the Nine Months in the Periods Ended
September 30, 1998 and 1997
The allowance for loan losses totaled $763,451 at September 30, 1998, an
increase of $66,772 from December 31, 1997. The allowance for loan losses
represented 1.47% and 1.56% of total loans at September 30, 1998 and December
31, 1997, respectively. An analysis of the allowance for loan losses since
December 31, 1997 follows:
Allowance for loan losses at December 31, 1997 $ 696,679
Charge-offs:
Commercial 111,322
Real Estate 3,000
Installment 26,799
------
Total 141,121
Recoveries:
Commercial 2,577
Real Estate -
Installment 10,429
------
Total 12,893
Provision charged to income 195,000
---------
Allowance for loan losses at September 30, 1998 $ 763,451
=========
During April 1998, the Bank charged-off approximately $110,000 related to
a commercial line totaling $156,000. Management anticipates having to charge-off
approximately $100,000 related to another commercial line before December 31,
1998. The loan portfolio is reviewed periodically to evaluate the outstanding
loans and to measure the performance of the portfolio and the adequacy of the
allowance for loan losses. This analysis includes a review of delinquency
trends, actual losses, and internal credit ratings. Management's judgment as to
the adequacy of the allowance is based upon a number of assumptions about future
events that it believes to be reasonable, but which may or may not be
reasonable. However, because of the inherent uncertainty of assumptions made
during the evaluation process, there can be no assurance that loan losses in
future periods will not exceed the allowance for loan losses of that additional
allocations to the allowance will not be required.
Its primary regulatory authority most recently examined the Bank in July
1997. There were no recommendations by the regulatory authority that in
management's opinion will have material effects on the Bank's liquidity, capital
resources or operations.
Investment Securities
At September 30, 1998, the Bank had $11,906,773 in investment
securities available-for-sale. The net unrealized loss on available for sale
securities, net of deferred taxes, was $54,866 on September 30, 1998. The Bank
invests primarily in obligations of the United States or obligations guaranteed
as to principal and interest by the United States and other taxable and tax
exempt securities. The Bank has included in its investment portfolio instruments
described as a derivative, primarily, structured note derivatives. Structured
notes are debt securities whose cash flow characteristics depend on one or more
indexes. Structured notes carry high credit ratings and are issued as
floating-rate instruments. In a rising interest rate environment, the market
value of these securities can decrease due to the fact that the embedded
options, puts, calls, etc., become evident. There can be no assurance that
<PAGE>12
GEORGIA BANCSHARES, INC.
AND SUBSIDIARY
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations - (continued)
For Each of the Nine Months in the Periods Ended
September 30, 1998 and 1997
as interest rates change in the future the amount of unrealized loss will not
increase, but if these securities are held until they mature and are repaid in
accordance with their terms, these principal losses will not be realized.
Results of Operations
Net interest income for the first nine months of 1998 was $2,629,514 an
increase of $480,525 (22.36%) compared to he same period for 1997. Interest
income for the first nine months of 1998 was $4,665,548, representing an
increase of $809,673 (21.00%) over the same period in 1997. The growth in
interest income was primarily due to an increase in loan balances. Interest
expense for the first nine months of 1998 increased $329,148 (16.17%) compared
to the same period in 1997. The interest income increased at a higher rate than
interest income during the first nine months of 1998 compare to the same period
in 1997.
Amounts charged to expense related to the allowance for loan losses for
the first nine months of 1998 increased $39,500 compared to the same period for
1997. The increase is primarily attributable to the loan growth for the first
nine months in 1998 and management's belief in maintaining a high level of the
allowance for loan losses in relationship to total loans.
Other income for the first nine months of 1998 was $375,254, an increase
of $58,603 (18.50%) compared to the same period in 1997. The increase in service
charges on deposit accounts is due to an increase in the number of accounts and
deposit activity that totaled $24,778. The remaining increase was due to
increases in gain on sale of investment securities $20,889, income from sale of
alternative investments of $9.687 and other increases of $ 20,889.
Other expenses for the first nine months of 1998 increased $235,321
(12.61%) compared to the first nine months in 1997. This increase is primarily
attributable to an increase in salary and personnel expenses of $96,241
associated with the increase in personnel to accommodate growth of the bank.
Other increases include an increase of $29,104 in net occupancy and equipment
expense related to general increases in insurance, repairs and maintenance and
an increase of $109,976 in general expenses.
Year 2000
The company is in the process of insuring that all of our computer
hardware, software, third party service providers and other systems are fully
Year 2000 compliant. We have identified several computer hardware devices,
computer software systems and other systems that are not compliant. All
non-compliant systems have been scheduled to be upgraded by December 31, 1998.
The Company has also contacted all third party service providers and obtained
data about their readiness. Several third party service providers are not
compliant, however they have established contingency dates and vendors in case
the third party service providers do not become compliant. The Company will
continue to monitor the efforts of all third party service providers as well as
obtaining certification and test results to ensure their readiness.
The Company has scheduled a conversion to Year 2000 complaint computer
systems on October 1, 1998. The Company's third party service providers will
absorb the majority of the costs associated with the conversion. The Company
will begin testing the new systems as soon as practical after the conversion. We
are projecting that complete testing and certification of our systems will be
completed by March 31, 1999.
The Company has budgeted approximately $85,000 for Year 2000
expenditures and computer systems replacements and upgrades. To date, the
Company has spent approximately $15,000 on upgrades and customer awareness
documentation and seminars. The majority of the budgeted expenditures will occur
in the next three months.
The Company is currently assessing the risks associated with our loan and
deposit customers. The assessment is scheduled to be completed by December 15,
1998. Upon completion of this assessment, management will be able to estimate
the potential exposure the Company might incur associated with the Year 2000. At
the present time, management has no reasonable means to predict the potential
exposure related to the Year 2000.
<PAGE>13
GEORGIA BANCSHARES, INC.
AND SUBSIDIARY
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security-Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K.
On October 9, 1998, the Company filed a Form 8-K announcing the Company
entered into a nonbinding letter of intent (the "Letter of Intent") for a
proposed merger with and into First Sterling Banks ("First Sterling"). First
Sterling would be the surviving corporation. The consummation of the merger
remains subject to certain conditions that must be satisfied prior to closing,
including the execution of a definitive agreement, a due diligence examination
by both parties and the receipt of shareholder and regulatory approvals.
The following Exhibits are filed with or incorporated by reference in
this Report as indicated below:
2 Plan and Agreement of Reorganization, dated as of February 16,
1995, by and among the Bank, Interim and the Company
(incorporated by reference from Appendix A to the Proxy
Statement/Prospectus included in the Company's Registration
tatement on Form S-4, Commission File No. 33-90742, filed
with the Commission on March 31, 1995 (the "S-4 Registration
Statement")).
3.1 Articles of Incorporation of the Company (incorporated by
reference from Exhibit 3.1 to the S-4 Registration Statement.
3.2 Bylaws of the Company (incorporated by reference from Exhibit
3.2 to the S-4 Registration Statement).
4 Form of Certificate representing shares of the $4.00 par value
common stock of the Company (incorporated by reference from
Exhibit 4.1 to the S-4 Registration Statement).
21 List of Subsidiaries of the Company (incorporated by reference
from Exhibit 21 to the Form 8-K, Commission File No.
33-90742), filed with the Commission on August 18, 1995.
<PAGE>
GEORGIA BANCSHARES, INC.
AND SUBSIDIARY
SIGNATURES
In accordance with the requirements of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
GEORGIA BANCSHARES, INC.
By: /s/ Ted A. Murphy
Ted A. Murphy
President and CEO
By: /s/ David L. Edgar
David L. Edgar, CPA
Principal Financial Officer
Date: November 13, 1998
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 3,936,560
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 5,580,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 11,906,773
<INVESTMENTS-CARRYING> 11,906,773
<INVESTMENTS-MARKET> 11,906,773
<LOANS> 51,835,828
<ALLOWANCE> 763,451
<TOTAL-ASSETS> 77,109,583
<DEPOSITS> 69,096,638
<SHORT-TERM> 0
<LIABILITIES-OTHER> 785,605
<LONG-TERM> 0
0
0
<COMMON> 2,336,912
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<INTEREST-INVEST> 719,387
<INTEREST-OTHER> 136,804
<INTEREST-TOTAL> 4,665,548
<INTEREST-DEPOSIT> 2,035,681
<INTEREST-EXPENSE> 2,036,034
<INTEREST-INCOME-NET> 2,629,514
<LOAN-LOSSES> 195,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,866,473
<INCOME-PRETAX> 943,295
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 636,353
<EPS-PRIMARY> .44
<EPS-DILUTED> .43
<YIELD-ACTUAL> 4.60
<LOANS-NON> 174,030
<LOANS-PAST> 0
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<CHARGE-OFFS> 141,121
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</TABLE>
